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Chp 2: Household Income
Term | Definition |
---|---|
Benefit in Kind – Perks: | This is official payment for work that is not money but does have a money value from your employer, e.g. company car, travel discounts |
Bonus: | Extra income on top of basic pay, usually for reaching performance targets. |
Commission: | Payment based on the number of items sold to encourage salespersons to sell more. E.g. an estate agent might earn 2% commission on each property sold. |
Gross Pay: | Income earned before any deductions are made and may include basic pay, overtime, bonus etc. |
Income | This is any money a business or household receives, both regular and irregular. |
Irregular Income: | This is income received occasionally such as overtime, birthday money, lottery win. |
Net Pay: | Gross pay less all deductions that have been made, both statutory and non-statutory(take-home pay) |
Non-Statutory Deductions: | These are voluntary deductions from wages/salary that an employee requests, not required by law, e.g. union fees, health insurance, credit union savings. |
Overtime: | Payment for working more than the normal working week usually paid at time-and-a-half or double. |
Payslip: | The document that an employee gets on payday, giving details of gross pay, deductions and net pay. |
Regular income: | This is income received at fixed intervals, e.g. wages, salary, child benefit, job seekers allowance. |
Statutory Deductions: | Deductions from wages/salary that are required by law and paid to the government, e.g. PAYE and PRSI |
Superannuation: | Contributions paid towards a pension from wages/salary. |
Tax credit: | An allowance given to taxpayers to reduce their tax liability depending on their circumstances, e.g. single or married etc. |
PAYE | Pay As You Earn: A tax levied on a workers income, deducted at source by employer. |
PRSI | Pay Related Social Insurance: Provides social protection entitlements like pension, job seekers benefit, maternity benefit should they be needed. |
USC | Universal Social Charge: A tax that applies to all workers whose income exceeds at certain limit, charged at various income levels. |
Salary | Is a payment as a reward for work paid at the same fixed amount every time no matter how many hours worked |
Wage | An employee is paid a wage when they are paid by the hour or the number of items produced. e.g. Time rate, Piece rate |
Time Rate Wage | Wages calculated based on the number of hours worked. |
Piece Rate Wage | Wages calculated on the amount of work actually completed, or items produced. E.g. factory worker earning €3 for each garment made. |
Disposable Income | Income that remains when all statutory deductions have been made. |
Discretionary Income | This is income that remains after taxes and essential spending, e.g. income left after food, clothing, rent, childcare, utilities. |