Consumer arithmetic

Income can be quoted per hour, week, fortnight, month or year. Before comparing jobs or planning spending, convert every amount to the same period. For this topic use 52 weeks, 26 fortnights and 12 months per year. A month is not generally four weeks: that shortcut accounts for only 48 weeks in a year. Divide an annual salary by 52 for weekly salary or by 12 for monthly salary.

These are average payments, so an actual payroll calendar can differ slightly.

Hourly wages depend on paid hours and the rate for each category. Calculate ordinary hours separately from overtime hours. Time and a half means 1.5 times the ordinary hourly rate; double time means twice the rate. Add allowances after calculating the relevant wages, unless the stated agreement says otherwise. An allowance might be a fixed weekly travel amount or a payment for each qualifying shift. Gross earnings are before deductions.

Do not silently treat gross pay as available spending money when a budget supplies net income.

Commission is a percentage of eligible sales. A base payment may be added, but only if stated. Piecework pays for each completed acceptable item. For example, $450 plus 3% of $12 000 sales gives $810; 160 items at $0.85 each give $136. These methods reward different measures of work, so comparisons require realistic sales or production assumptions.

Government allowance and pension exercises supply simplified payment rules. Apply the stated maximum, threshold and reduction rate in order, without importing current real-world eligibility rules. A fictional fortnightly allowance of $700 falls by $0.50 per dollar of income above $200. At $500 income, the reduction is ($500 − $200) × 0.50 = $150, leaving $550. Check that reductions cannot produce a negative payment if the rule specifies a zero minimum.