Business Studies 1

Year

st

Chapter 1
Income
S

Learning outcomes

Can distinguish between regular and additional income.

Know and understand the various income terms.

Be able to understand a payslip.

Know what Gross pay is and Be able to calculate it.

Understand what Net pay is and be able to calculate it.

Know what the terms PAYE, PRSI mean.

Income

What is income?

Income is money ( or something of

value) we recieve: (Roche & Cusack 2011)

Types of Income
Regular
Wages,(Weekly), Salary (Monthly), Social
Welfare payments, Pocket money,
Pension
Irregular
Lotto Win, Gift, overtime, Interest, Bonus

Exercise
Pocket money,
commision, Interest on
savings, Free travel,
Unemployed Benefit,
disability benefit,
Unemployment
allowance, wage,
Childrens allowance,
clothing allowance,
salary, pension, Family
income supplement,
student grant, company

Questions:
Q1. If you were employed,
which sources of income might
you receive?
Q2. If you were unemployed,
which sources of income might
you receive?
Q3. As a student, which sources
of income might you receive?
Q4. Which sources of income
might an old age pensioner
receive?

Income Terms

Overtime
Any hours worked
after the agreed
working week (Max.
39 hours are called
overtime. Over time
is usually paid at a
higher rate per hour.

Income Terms
Commission
This is a percentage of the
sale price that is given to the
sales person who makes the
sale. If a sales assistant gets
10% on all sales and he sells
a dishwasher for 200 the
sales assistant will get 20
for making that sale !

Income Terms

Social Welfare payments:

Money given by the government to people who might be:

Unemployed

Unable to work

Elderly

Unable to manage

Examples:
Disability pension, unemployment assistance, pension and
family supplement.

Additional income for

employees
Profit sharing:

some companies give their employees a share of

the profits. This is to encourage them to work harder
and feel abit of ownership in the company.
Benefit in kind

These are non money extra that are given to the

employees as a reward. E.g free mobile phone,
company car, free travel.
Bonus extra money for reaching an agreed target.

Employees

An Employee is:
A person who is hired to work for another or
for a business, firm, etc, in return for payment.

Be careful who you hire !!!

Payslips
Gross pay

This is the total amount of money a person earns

which would include overtime, bonuses, commission
etc..
Net pay

The Actual amount of money received usually

called Take home Pay Gross pay minus deductions
Deductions

Amount of money taken off gross pay

Payslip

Statutory deductions

By Law there are 3 deductions must be deducted

from gross pay:
PAYE= Pay As You Earn
PRSI = Pay Related Social Insurance
USC = Universal social Charge

Payslips

Voluntary Deductions

Employees can decide to have other deductions

taken out of their Pay.
Union Memnbership
Pension

Payslips
Week Number :

The tax year starts 1st of January each year therefore

the first week in January is called week 1
Employee Number:

An employer must keep accurate records on all staff

and so usually Employers give employees an
Employee number.

Payslips

Employee 1

Paylsips
Calculations:

Peter Griffin
Works 39 hours a week
Paid 12.50 per hour
Does 8 hours overtime
Pays 20% PAYE and 4% PRSI
Pension 5% Union 2%

Paysilp

Week
No:

Gross Pay

Name:

Basi
c

Overtime

Deductions

Tota
l

PAYE

PRSI

Pensio
n

Union

Date

Work
No:

Total
Deductions

Net Pay

Payslips

Week No:
1

Gross Pay

Deductions

Name:

Basic

OT

Total

PAYE

PRSI

Pensio
n

Peter Griffin

487.5

100

587.50

117.
50

23.5

29.38

Date:
5th Jan
2014

Work
No:
7

Union

Total
deduction
s

Net
pay

11.75

182.13

405.37

HOMEWORK

Homework