Financial Terms

Important Terms for Life and for Spreadsheets

How We Get Paid

• Hourly Rate– Fixed rate of a dollar amount for each hour– Minimum wage is:

• $11.00 – General• $10.30 – Student

• Salary– A fixed regular payment usually based on an annual

sum.– A first year teacher salary is $45 000/year– A police officers first year is $63 400/year– An entry level job at McDonalds is $22 800/year

How We Get Paid

• Commission– This is when you make a percentage of what you sell.

For example: You work at the GAP and you are paid a 4% commission on your sales each month. If you sell $7028 (sales) of clothes this month you will make a commission of $281.12. This would be added to your paycheck. (4% of $7028 is 0.04*7028 = 281.12)

– Many jobs use a combination of Hourly Rate and Commission, although some jobs work purely on commission.

How We Get Paid

• Piecework– Piecework is getting paid for performance. This

includes some factory jobs, delivering papers or tree planting for example.

Other Important Terms

Earnings: What you get paidThis would be any money you make or your Pay.

Gross Pay: All of the money you make (before deductions).Deductions: Money that is taken off of your pay.

Deductions include income tax, pension, health and dental plans, union dues, professional fees and more.

Net Pay: All of the money you take home (after deductions). Also known as take home pay.NET PAY = GROSS PAY - DEDUCTIONS

Basic Business Financial Terminology

Revenue: This is all of the money coming in. Expenses: This is all of the money going out.Profit / Loss (Net Revenue): To determine the Profit or Loss use the simple equation…

Revenue – Expenses = Profit/LossIf the answer is + the business has a profitIf the answer is – the business has a loss