Session 5 In Class Exercise 3

Use Payroll Online Deductions Calculator and determine the amounts indicated below.

Calculation of net pay with commission and benefits and allowance

 Ross Dean works 40 hours per week for a custom furniture manufacturing company in Manitoba.
 Ross's employment contract stipulates his earnings formula is base salary plus commission
 He is paid a salary of $20,800 per year, plus 5% commission on his sales (paid each pay period)
 For this pay day (Mar 12/21), he is to be paid commission on sales of $1,500
 Paid Bi-weekly (26 pays per year).
 He claims for the basic personal amount.

 His employer also pays him an allowance equivalent to $500 per month because he uses his own
vehicle to see customers that want in-home consultations, (allowance is received on a per pay
basis)

Salary earned this pay period $20,800 salary / 26 pp = $800

Commission earned this pay period $1,500 x 5% = $75

$875 = Salary $800 + Commission $75

What is Ross’s per hour rate when salary and
commission are combined?
$875/(40 x 2) = $875/80 hrs = $10.94 / hr

$11.90 / hr (effective Oct 1, 2020)

What is the minimum rate per hour Ross would receive
based on the labour standards for Manitoba?
Based on the minimum rate per hour, what is the
minimum earnings Ross would be paid for his 80 hours
of work?
Therefore Ross will need to be paid the
minimum wage rate as his calculated hourly
rate is lower.
Minimum would be $11.90 / hr x 80 hrs=
$952

Total cash income on PDOC this pay period $952

Vehicle allowance this pay period $500/month x 12 months / 26 pp = $230.77

Total income tax deducted $157.41

CPP Contributions deducted $57.12

EI Premiums deducted $18.69

Net amount this pay period $949.55

BJessome 2020