Ways people earn money
Income is money you receive. For most people, it comes from work, and it can be paid in several ways.
| Type | How it’s calculated | Example job |
|---|---|---|
| Hourly wage | rate × hours worked | cashier, server |
| Salary | fixed amount per year | teacher, office manager |
| Commission | percent of sales | real estate agent |
| Salary + commission | base pay plus percent of sales | car salesperson |
| Piecework | rate × items made | fruit picker, tailor |
| Tips | extra from customers | server, hairstylist |
Hourly wages
Pay = hourly rate × hours
Example: $17.20/h for 24 hours → 17.20 × 24 = $412.80
Canada’s provinces and territories each set a minimum wage, and it changes over time, so check the current rate where you live.
Salary
A salary is divided across pay periods:
| Pay period | Pays per year |
|---|---|
| Weekly | 52 |
| Biweekly (every 2 weeks) | 26 |
| Semi-monthly (twice a month) | 24 |
| Monthly | 12 |
Example: $52,000 salary paid biweekly → 52,000 ÷ 26 = $2,000 per pay.
Commission
Example: An agent earns 3% commission on a $400,000 home sale.
0.03 × 400,000 = $12,000
Base plus commission: $1,500/month + 5% of $30,000 sales = 1,500 + 1,500 = $3,000.
Piecework
Example: A worker is paid $0.75 per box packed and packs 420 boxes.
0.75 × 420 = $315
Gross income
Gross income is the total before deductions like tax and pension contributions. (Net income, after deductions, is covered in a later lesson.)
Comparing jobs
Example: Job A pays $18/h for 35 h/week. Job B pays a $34,000 salary. Which earns more per year?
- Job A: 18 × 35 × 52 = $32,760
- Job B: $34,000
- Job B pays more, but think about hours, benefits and growth too.
Worked examples
Example 1: $15.50/h for 6 hours on Saturday and 5 on Sunday?
11 h × 15.50 = $170.50.
Example 2: $45,600 salary paid monthly?
45,600 ÷ 12 = $3,800.
Example 3: 8% commission on $12,500 of sales?
$1,000.
Common mistakes
- Mixing up biweekly (26) and semi-monthly (24).
- Using the percent as a whole number (3 instead of 0.03).
- Comparing jobs without the same time period.
Try it yourself
- $16.75/h for 30 hours?
- $62,400 salary, paid biweekly?
- 4% commission on $85,000 in sales?
- $2 per shirt sewn, 135 shirts?
Answers: 1) $502.50 2) $2,400 3) $3,400 4) $270
Quick recap
- Income can be a wage, salary, commission, piecework or tips.
- Gross income is before deductions.
- Compare jobs using the same pay period.