Personal Finance: Module 1 Lesson 3

Determining Your Destiny

Determining Your Destiny • Slide 2

What is employee compensation?

It is 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: Overview of Employment Compensation

Understanding Employee Compensation

Types of monetary compensation

Determining Your Destiny • Slide 3

Salary

Wages

Overtime

Commission

Tips

Bonuses

Entrepreneurship

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

paid at the rate of at least one and one-half the employee’s

regular rate of pay

Determining Your Destiny • Slide 4

Commission, tips, and bonuses Commission – a common way to

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 paid in

addition to regular pay to reward

good performance by the employee,

company, or both

Determining Your Destiny • Slide 5

Entrepreneurship (self employment)

Determining Your Destiny • Slide 6

A person works for him- or herself and owns

the business Self-employment

income, called profit,

is money left over

once 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 tipsCollege Grad

Evaluating 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 – worker is

paid for certain holidays

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

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.

Employment Benefits

Flexible Spending Accounts

Flexible Spending Accounts

(FSA) – money that is deducted

from an employee’s paycheck to

pay health care expenses 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 wages or

income if you are unable to work

Short-term disability replaces a portion of income

for up to six months

Long-term disability

replaces a portion

of income for longer

than six months

Comparing employee benefits

Determining Your Destiny • Slide 12

WorksheetsHealth Insurance CostCompare Employee Benefits

Links and ActivitiesBenefits Wizard

Employer-sponsored plans 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.

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 part or all

of your education paid for

by an employer is a

valuable benefit!

Profit sharing and stock options

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

Stock options – employees receive stock in the company at a discounted 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

“”

Work-life balance

Determining Your Destiny • Slide 17

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

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