Calculating Payroll > Employee Calculations
Thank goodness our last employee. Talk Alot is our salesman in charge of banquets and special events. He is paid a 20 % commission of all banquet and special events sales. Banquet and special event sales totaled $1,000. He actually worked 40 hours during the week.
- Commission Calculation - Let's dig in and see what his commission for the week amounts to.
Commission = Commission Rate X Banquet & Special Event Sales
Commission = 20% X $1,000
Commission = $200.00
Are we finally done ? Well we know we don't have to pay him any overtime because he only worked 40 hours during the week. We do however have to make sure that he makes at least minimum wage for the actual hours that he worked. Remember the law states that regardless of how an employer calculates an employee's earnings, the employee must at least be paid minimum wage for the hours he/she worked.
- Earnings Calculation - OK , lets do a calculation similar to the calculation that we made with Betty Baker. First lets calculate his hourly rate based on his commission earnings.
Commission Rate Per Hour = Commissions Earned / Actual Hours Worked
Commission Rate Per Hour = $200.00 / 40 hours
Commission Rate Per Hour = $5.00
Woops ! Since $5.00 an hour is less than the minimum wage of $7.25 we have to base Talk Alot's earnings on the current minimum wage rate and his actual hours worked.
Regular Earnings = Minimum Wage X Regular Hours Worked
Regular Earnings = $7.25 X 40 hours
Regular Earnings = $290.00
Total Weekly Earnings = $290.00