Gross Pay (SQA National 5 Applications of Mathematics): Revision Note

Exam code: X844 75

Dan Finlay

Written by: Dan Finlay

Reviewed by: Roger B

Updated on

Gross pay

What is gross pay?

  • Gross pay is the total amount a person earns before any deductions are taken

  • Gross pay includes:

    • basic pay/salary

    • overtime pay

    • bonuses

    • commission

    • benefits and allowances

How do I calculate gross pay?

  • Calculate the amount of the individual components

  • Add the amounts together

  • Basic pay/salary

    • You might be given this amount

    • Or you might have to calculate it by multiplying the hours by the hourly rate

  • Overtime

    • Calculate the number of hours that are done as overtime

    • Calculate the overtime hourly rate

    • Multiply the hours by the rate

  • Bonuses

    • There might be given fixed amounts as bonuses

    • You might have to determine if the person meets the conditions for the bonus

  • Commission

    • Calculate the amount of sales that commission is to be applied to

    • Multiply this amount of sales by the rate of commission

  • Benefits and allowances

    • There might be benefits and allowances given in the questions

Examiner Tips and Tricks

These questions come up on both papers. Make sure you practise adding and multiplying with decimals without a calculator. Also, make sure you can find percentages of numbers, both with and without a calculator.

Example with overtime

Worked Example

Rule usually works 28 hours each week.

He is paid time and a half for any additional hours that he works.

His basic rate of pay is £14.20.

Last week, he worked a total of 35 hours.

Calculate his gross pay for last week.

Answer:

STEP 1
Calculate Rule's basic pay

28×£14.20=£397.60

STEP2
Calculate Rule's overtime pay

  • Find the number of hours worked overtime

3528=7

  • Find the hourly overtime rate

1.5×£14.20=£21.30

  • Multiply together

7×£21.30=£149.10

STEP 3
Add the basic pay and overtime pay together

£397.60+£149.10=£546.70

£546.70

Example with commission

Worked Example

Romain works as a salesperson for a phone company.

She is paid a basic monthly salary of £1650 plus commission of 4% on her monthly sales over £12,000.

In August, her sales totalled £21,000.

Calculate Romain's gross pay in August.

Answer:

STEP 1
Calculate the commission pay

  • Find the amount of sales that the commission is applied to

£21,000£12,000=£9000

  • Multiply this by the rate of commission

4%×£9,000=0.04×£9000=£360

STEP 2
Add the basic salary and the commission together

£1650+£360=£2010

£2010

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Dan Finlay

Author: Dan Finlay

Expertise: Portfolio Lead

Dan graduated from the University of Oxford with a First class degree in mathematics. As well as teaching maths for over 8 years, Dan has marked a range of exams for Edexcel, tutored students and taught A Level Accounting. Dan has a keen interest in statistics and probability and their real-life applications.

Roger B

Reviewer: Roger B

Expertise: Development Editor

Roger's teaching experience stretches all the way back to 1992, and in that time he has taught students at all levels between Year 7 and university undergraduate. Having conducted and published postgraduate research into the mathematical theory behind quantum computing, he is more than confident in dealing with mathematics at any level the exam boards might throw at you.