Personal Finance: Module 1 Lesson 3

Essentials for the Journey

Determining Your Destiny • Slide 2

What is employee compensation?

It’s the total amount of pay provided to an employee in

exchange for services performed.

Employees can be paid in two ways:

Direct (monetary)

Indirect (non-monetary)

Video: Understanding Employee Compensation

Types of Monetary Compensation

Determining Your Destiny • Slide 3

Salary

Wages

Overtime

Commission

Tips

Bonuses

Profit

Salary, Wages and Overtime

Salary – a fixed amount paid each pay period no matter

how many hours were actually worked

Wages – usually received as an hourly,

daily or weekly rate of pay; fluctuates

based on the actual amount of time the

employee worked during the pay period

Overtime – pay for hours worked over 40 hours in a week

usually paid at a rate of one and one-half times the

employee’s regular rate of pay

Determining Your Destiny • Slide 4

Commission, Tips and Bonuses Commission – a common way to

motivate and pay sales people.

Usually a percentage of the total

price of the product or services sold

during a pay period

Tips – an extra amount a customer

pays to reward service workers for

providing quality service

Bonuses - an amount employer pays

in addition to regular pay to reward

good performance (by the employee,

company, or both)

Determining Your Destiny • Slide 5

Profit from Self-employment & Entrepreneurship

Determining Your Destiny • Slide 6

A person works for him- or herself and owns

the business or enterprise

Self-employment

income is called profit.

Profit is the money left

over after all business

expenses are paid.

Employee Benefits

“

Determining Your Destiny • Slide 7

Indirect or non-monetary compensation provided

to employees (by their employer) in addition to

wages, salary and tips

College GradEvaluating Your Benefits Package

Basic Types of Employee Benefits

Paid leave

Group insurance

Retirement plans

Educational assistance program

Profit-sharing and stock options

Determining Your Destiny • Slide 8

Types of Paid Leave

Determining Your Destiny • Slide 9

Holiday pay – employee is

paid for certain holidays even

when the place of employment

is closed

Sick leave – worker is paid even though he or

she is not at work due to illness

Personal/annual leave – worker is paid

even though he or she is not at work because

of personal reasons (not due to illness)

Group Insurance

Determining Your Destiny • Slide 10

Group Health Insurance – employer-sponsored

insurance that helps provide protection against the costs of

medical services (and may include dental and vision

options) at a reduced cost to employee.

Employment Benefits

Flexible Spending Accounts

Flexible Spending Accounts (FSA) – employee has money deducted from paycheck to be set aside to pay future healthcare expenses that are not covered by insurance.

Group Insurance

Determining Your Destiny • Slide 11

Group life insurance provides benefits to dependents

and/or others you name in the case of your death

Group disability insurance replaces lost income if you are

unable to work

Short-term group disability replaces a portion of

income for up to six months

Long-term group disability

replaces a portion of

income for longer than

six months

Comparing Employee Benefits

Determining Your Destiny • Slide 12

Worksheets

Health Insurance CostCompare Employee Benefits

Links and Activities

Benefits Wizard

Employer-sponsored plans that help employees be better

prepared for a time when they are retired and no longer

working.

401(k) Plans – employee chooses how much money

to deduct from each paycheck and how to invest it--many employers will offer to match a portion of the employee’s contribution!

Begin Providing for Your Future

Pension Plans – retirement accounts funded entirely by the employer. Value varies depending on years worked, salary, etc.

What is a pension?

Retirement Plans

Determining Your Destiny • Slide 13

Educational Assistance ProgramAn employee benefit wherein some or all educational

expenses are funded by the employer

Policies are set by employer

May extend to family members

Determining Your Destiny • Slide 14

College access tip!

Having all or part of your

education paid for by an

employer is a very

valuable employee benefit!

Profit-Sharing and Stock Options

Profit-sharing – employees are paid a share of the company’s profit

Stock options – employees receive shares of stock in the company at a fixed price

Determining Your Destiny • Slide 15

Step with care and great tact and remember that Life’s a Great Balancing Act.

Determining Your Destiny • Slide 16

Oh, the Places You’ll Go! by Dr. Seuss

“”

We all deserve to be able to balance our careers with rewarding personal

lives!

Employees who feel they have a better work-life balance tend to work 21%

harder.

Find out as much as you can before

deciding if a career opportunity

is right for you…

o Flexible work schedule

o On-call or overtime

o Overnight travel

o Family emergencies

o Commute time

Work-life Balance

Determining Your Destiny • Slide 17

Health & BalanceFive Tips for Better Work-Life Balance

For this project, the PR/Award Number is V215W100015

and the Department of Education is the funding agency.

This information is provided for the reader's convenience. Tennessee and U.S. Department of

Education are not responsible for controlling or guaranteeing the accuracy, relevance, timeliness, or

completeness of this information. Further, the inclusion of information or Web site address does not

reflect the importance of the organization, nor is it intended to endorse any views expressed, or

products or services offered.

Financial Education for College Access and Success

Determining Your Destiny • Slide 18