personal finance: module 1 lesson 3 essentials for the journey
TRANSCRIPT
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
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Financial Education for College Access and Success
Determining Your Destiny • Slide 18