Commissions, Royalties, & Piecework Pay

Section 6-3Commissions, Royalties, & Piecework PayPay PlansLast week, we covered:Annual Salary paid by the yearHourly Pay paid by the hour

What other types of pay plans are there?CommissionPaid according to money from salesRoyaltyPaid according to money from sales (you are not seller)Piecework PayPaid according to units produced

CommissionSome jobs that get paid commission:Real Estate Agent

Salesmen for department stores

TV Sales

Any type of sales jobRoyaltiesSome jobs that pay royaltiesAuthor

Movie Director

Actor/Actress

MusicianPiecework PayJobs that have piecework pay plans:

Newspaper delivery

Field workers (pick corn, strawberries, etc)

Factory workers

Advantages vs. DisadvantagesAs an employee, what are the advantages of being paid commission or piecework?

What are the disadvantages?

As an employer, what are the advantages of being paid commission or piecework?

What are the disadvantages?Calculating CommissionHuey Gaines is paid a straight commission of 6% on his sales. During February, his sales were $38,000. What was his commission?

Find his commission rate:

Convert the percent to a decimal:

Multiply the decimal by the amount of sales:6%0.060.06 x 38,000= $2,280Calculating CommissionMelvins sales last month of a new tile cleaner were $9,500. If he receives a commission rate of 15% of all sales, what commission did he earn?

Find his commission rate:

Convert the percent to a decimal:

Multiply the decimal by the amount of sales:15%0.150.15 x 9,500= $1,425Calculating CommissionJacqueline earned 15% commission on her monthly sales of $2,870, $3,150, and $3,940. What was her total commission for all three months.

First Month:

Second Month:

Third Month:

0.15 x 2,8700.15 x 3,1500.15 x 3,940= $591= $430.50= $472.50Total Commission: = $1,494Calculating CommissionLiz receives a weekly salary of $200, plus 3% commission on her sales. Last week, she sold $29,700 of computer equipment. How much did she earn?

Earnings = Commission + weekly Salary

Commission =Weekly Salary =

Earnings = 0.03 x 29,700= $891= $200= $891 + $200= $1,091.00