What Are the Different Types of Income?
In this section you will learn how to calculate your income. You’ll also look at different kinds of income.
Rule
Types of Income
-
Hourly wage:
-
Payment based on the amount of hours you have worked. Usually a constant rate per hour. Payout is usually biweekly or each month. This is the most common type of income.
-
Periodic salary:
-
Payment based on a set kind of work. The salary is paid as a fixed amount, typically biweekly or once a month.
-
Piecework pay:
-
A set amount for working on a project, regardless of how long it takes to finish. Sometimes a fraction of the total amount is paid in advance, and the remainder is paid when the project is completed.
-
Commission-based pay:
-
A wage based on performance, often with a low income set as a base, and larger bonuses based on performance.
In countries, people receive their salary monthly on a set day of the week. In other countries, it is more common to be paid weekly or biweekly (every two weeks). Now you’re going to look at calculations concerning the different types of income.
Formula
Example 1
Your monthly salary is , and you worked 160 hours in the most recent month. What is your hourly wage?
This means you were paid $ per hour you worked.
Formula
Hourly wages with piecework pay
Example 2
You get to paint your neighbor’s garage. He doesn’t care how long you take to finish. What will your hourly wage be if you paint the garage in eight hours?
What will your hourly wage be if you use sixteen hours to paint the garage?
You can see that the less time you spend on the job, the higher your hourly wage is. In that case, there is nothing left to do but work hard and finish as fast as possible while doing a good job!
