income & expenditure ppt

Ms O' Brien Chanel College

Income & Income & ExpenditureExpenditureIncome & Income &

ExpenditureExpenditure

Household BudgetingHousehold BudgetingHousehold BudgetingHousehold Budgeting


A Budget:

is a financial plan that shows expected income and expenditure

over a certain time period.

Why budget?......


1. To ensure money is available to cover costs

2. Reduce risk of impulse buying

3. Avoid build up of debt

4. Money for a ‘rainy day’


What is Income?

It is money or a benefit in kind you receive

1. Regular 2. Irregular (additional) 3. Benefit-in-Kind


1. Regular Income:

Is what you are sure of receiving

You can plan to spend it

E.G. Wages/ Salary/Child Benefit


2. Irregular Income:

Is what you are not sure of receiving

You cannot plan to spend it

E.G. Bonus / Lotto Win/ Tax Rebate


3. Benefit- in –Kind:

Non money income received for work done

Incentive to work hard

Boosts employee morale


Regular Benefit in Kind Irregular

Wages Overtime Interest Pension Dividend

Salary Lotto win Gift Car Social Welfare Benefit Mobile

Bonus Commission Tax refund Club Membership

Place Incomes under correct headings


Wages

Salary

* Min wage €6.06

Is regular income for worked or number of goods produced.E.g. Builder

Is regular income received for doing a job no matter how many hours you spend at it.E.g. Teacher

Types of Employee Income

1. Time Rate: Getting paid per hours worked

2. Piece Rate:Getting paid per number of products produced.

Which would you prefer?....

Commission

Additional income calculated as apercentage of sales.

ExampleMary works in . She earns 5% commission on every euro worth of clothes she sells.How much does she earn for selling €200 worth?


Solution

200 X 5 100

= €10 Commission

Basic Wage

Regular weekly payment for normal hours worked

Example: €10 per hour x 30 hrs = €300

I love my job..

Overtime

Additional payment for working over your normal hours

Example:

Ben gets €10 per hour working in a petrol station. On Saturday he worked two hours overtime on time and a half. How much did he receive for overtime?

Solution:

1 hour = € 10

10 = € 5 2 € 10 + € 5 = € 15 per hour

overtime

2 hours x € 15 = € 30 for overtime


• Mary receives €20/hr for a normal 30 hour week and double time for overtime.

• How much does she earn for a 32 hour week?

Example


Answer

• Basic Pay= 30 hours x € 20 = €600

• Overtime = 2 x (€20 x 2) = € 80

• Total €680


Gross Wage

Basic Wage + Overtime before deductions


Net Wage (Take Home Pay)

Basic pay + overtime after deductions


Deductions:

Voluntary (Choice)

Involuntary (Compulsory)

Pension PAYE

Medical Insurance

PRSI

Savings Universal Social Contribution

Trade Union Fees


Statutory Deductions:

PAYE – Pay as you Earn

- 32800 @ 20%- Anything over @ 41%- Used by government to invest in Services

Example: Health Care


PRSI: Pay Related Social Insurance

Collected as a contribution by the employee towards social welfare benefits

Example: Old age Pension Unemployment benefit

Statutory Deductions:


Basic Basic hourly wage €10 Per HourNo of hours worked 6 HoursTotal wages receivedOver time Basic wage plus time and a halfNo of hours worked 3 HoursTotal Overtime wages receivedGross wage

Wage slip

Basic hourly wage: is what you get for every hour worked

Overtime: is what you receive for any extra hours you work


Jan Feb Mar April May June Total

Joe 2300 2300 2600 2550 2300 2300

Mary 2800 2800 2800 3600 2800 2800

Child Ben

240 240 240 240 240 240

Interest

- - - - - 560

Total Income

Workbook pg 2 Q10

Budgets

Expenditure

Fixed: Spending money on goods and servicesregularly. Amount does not vary.

Irregular: Spending money on goods and servicesregularly But the amount spent varies.

Discretionary: Spending money on things we wantbut do not need


ExpenditureFixed Irregular Discretionary

Rent Car running costs Presents

Mortgage Phone bills Holiday

Insurance Groceries Entertainment

Clothes Magazine


Current Expenditure: Spending money on day-to-day items

Capital Expenditure: Spending money on durable items for long term usage


Opportunity Cost

The item we do without when we have to make a choice between two or more actions

Opportunity CostYou have €50 to spend .

You can buy a ticket to go and see a or you can buy 5 video games.

What is your decision?


Impulse Buying

“Buying without thinking”

When was the last time you bought something on impulse?


False Economy

Buying something because it is cheap but in the long run costs

you more…

She only cost a euro dad and she is going to

have puppies!

False Economy

Discuss


Reading Electricity Bills

Present 6734

Previous 5890

No of units used 844

Rate per unit .20

Sub total 168.80

Standing charge 10.00

Total charge 178.80


E.G. Question ESB Meter ReadingPresent 6534Previous -4850No of units usedRate per unit X.30Sub totalAdd Standing charge

+15.00

Total charge


Present 3436

Previous 2916

No of units used

Rate per unit .15

Sub total

Add Standing charge 16.20

Subtotal

Vat @13.5%

Total owed

E.G. Question ESB Meter Reading


Total Income – Total Expenditure

Net Cash

Budgets

Here’s €10 pocket money

Thanks

If I have €10 income and I spend €7 on

a new football I will

have net cash of €3!

Net Cash


Opening CashMoney available at the start of the month

(Brought forward from the previous month)

Money in bank


Net Cash + Opening Cash= Closing Cash

Money left over at the end of the month Surplus Deficit

Activity

Budgeting Tool


Jan Feb Mar Apr Total

Total Expenditure

1850 2280 3170 1740 9040

Net Cash (230) (660) (1550) (120) (2560)

Opening cash

900 900

Closing cash

670

Workbook page 11 Q2



Total Expenditure

2850 3960 3690 4470 14970

Net Cash 1130 20 540 (290) 1400

Opening cash

1000 2130 2150 2690 1000

Closing cash

2130 2150 2690 2400 2400

Workbook page 15 Q4



Total Expenditure

4495 2880 2920 4980 15275

Net Cash 1655 2270 2530 320 6775

Opening cash

495+ 2150+ 4420+ 6950+

495+

Closing cash

=2150

=4420 =6950 =7270

= 7270

Workbook page 17 Q5

income & expenditure ppt

Documents

kind ms o brien chanel

hour overtime

money income

hours x

hour x

irregular income

gross wage basic wage

wage slipbasic hourly