PERSONAL INCOME EQUATION (P.I.E)

Gross Pay – Deductions = Net Pay – Expenses = Discretionary Income

Gross Pay

•Every two weeks or weekly•Wages (hourly rate)•Salary/year (26 or 52)•Commission (% of sale)•Salary + Commission•Wage + Commission

Deductions

•Mandatory• Income Tax

• Federal• Provincial

•Employment Insurance

•Health Insurance Plan

•OHIP•Workers Compensation

•Union Dues•Canada Pension Plan

Deductions Cont.

•Voluntary Deductions• Investments• Insurance Premiums (house, car)•Supplemental Health Insurance•Optical/Dental/Life Insurance Plan•Drug Plan

Net Pay

• Also called: Take home pay or Disposable Income • Groceries• Clothing

Expenses

• Rent• Mortgage• Utilities

• Heat• Hydro• Water• Phone• Cable

Expenses Conti.

• Food• House Insurance• Property Tax• Clothing• Transportation

• Public• Vehicle

• Loan, insurance, tax, gas, repairs

• Household Supplies• Furniture• Interest• Children

Discretionary Income

•Entertainment•Vacations• Investments•Luxury (wants)•Computer

•Education•Gifts•Home Improvements

•Memberships•Pets