Gross Pay Net Pay Commission Bonus Piecework Standard Work Day/Week Overtime

Gross Pay


a) Hourly gross pay: b) Salaried gross pay:

Net Pay

Net pay (take home pay) is the remaining amount after deductions from the gross salary. The types of deductions that may be considered include: taxes (federal and provincial), union dues, Employment Insurance (EI), Canada Pension Plan (CPP), registered retirement savings plans. In each tax year there a maximum values set for CPP and EI. If the tax/CPP/EI tables do not allow for a particular amount there are formulas that can be used to calculuate the required value.

a) If the EI table does not contain the required value you must multiply the amount given by 1.73%

Example: 4076 x 1.73% = 4076 x .0173 = 70.5148 = 70.51 (rounding off after two decimals)

b) If the CPP table does not contain the required value you must divide 3500 by the number of pay periods. If weekly 52, biweekly 26, semi monthly 24, monthly 12. Subtract answer from gross pay and then multiply by 4.95 % or .0495


The following examples will focus on the basic deductions of federal and provincial income tax, CPP and EI. In each example the deductions will come from the tables that are provided.

1. Determine the deductions for a weekly salary of $1700 - Claim Code 1

2. Determine the deductions for a biweekly salary of $2100 - Claim Code 1

3. Determine the deductions for a monthly salary of $6,300 - Claim Code 1

4. Determine the deuctions of a semi-monthly salary if the yearly salary was $58,000. - Claim Code 1



A payment made to employees based on the value of sales achieved. An employee can have his or her salary based enitrely on commission sales or have a package that is made up of a base salary plus commission sales. Commission is, therefore, a form of “incentive pay”. Commission can be based on a set percentage or on a graduated percentage. The value of the percentage is based on how easy or difficult it is to sell a particluar a product (if easy the [percentage could be 5% or if difficult it could be as high a 35%). A graduated percentage is usually applied in sales that involve large quantities of money (for example home sales or commercial property sales).


  1. Straight commission:
    • A real estate agent earns 2.5% of the sales price of the home sold. How much does the agent make on a home that sells for $370,000?
          • Sale price x percent = 370,000 x 2.5% = 370,000 x 0.025 = $9,250           

2. Base Salary plus commission

3. Graduated Commission (example uses the same info but examines in decreasing amounts what happens when each level on commission is reached or not reached).


Compensation over and above the amount of pay specified as a base salary or hourly rate of pay. Is considered part of gross pay for determination of income tax and other deductions. Bonus pay may used by organizations as a thank you to employees or a team that achieves significant goals. Bonus pay may also used to improve employee morale, motivation, and productivity.


A system of labor in which payment is based on the actual number of pieces produced rather than hours worked, regardless of how long it takes.

Standard Work Day or Work Week

By definition eight hours in a day and 40 hours in a week except in the case of averaging. Averaging is defined as work in an establishment that necessitates irregular hours due to seasonal or other factors, resulting in employees having no regularly scheduled hours or having regularly scheduled hours which vary from time to time. The employer may average the working hours of employees over a selected period of 2 or more weeks.


Overtime is defined as the hours worked in excess of the standard hours specified in the Code or Regulations, in most cases 8 in a day or 40 in a week. A minimum of one and one-half times the regular rate of wages defines overtime pay.


1. John works 10 hours doing a concrete pour at a housing construction site. His hourly wage is $14.25. What is his gross salary for the day?

    • Regular pay = number of hours x wage per hour = 8 x 14.25 = 114
    • Overtime rate = Wage x 1.5 = 14.25 x 1.5 = 21.38
    • Overtime = number of hours x wage per hour = 2 x 21.38 = 42.76
    • Gross salary = regular pay for 8 hours + overtime for two hours = 114 + 42.76 = $156.76

2. Susan work at a retail clothing store and because of the need to do an inventory her total number of hours of work for the week total 45 hours. Her weekly salary of $720.00. What is her gross salary for the week?

    • Hourly rate = weekly salary divided by number of hurs (40) = 720 /40 = 18.00
    • Overtime rate = Wage x 1.5 = 18 x 1.5 = 27.00
    • Overtime = number of hours x wage per hou r = 5 x 18.00 = 90.00
    • Gross salary = regular weekly pay + overtime for five hours = 720.00 + 90.00 = $810.00