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