Section 2.2 Benefi ts
75
Strategy
Use the formula:
total annual value of job = annual gross pay + total annual employee
benefi ts
Solution
Step 1: Determine Jazmin’s approximate monthly gross pay. Multiply her hourly
wage by the number of hours she works in a month.
monthly gross pay = hourly wage × number of hours per month
monthly gross pay = $8.78 per hour × 80 hours
monthly gross pay = $702.40
Step 2: Determine Jazmin’s approximate annual gross pay. Multiply her monthly
gross pay by 12 (the number of months in a year).
annual gross pay = monthly gross pay × 12
annual gross pay = $702.40 × 12
annual gross pay = $8,428.80
Step 3: Determine the annual value of Jazmin’s uniform allowance. Multiply the
monthly allowance by 12 (the number of months in a year).
annual uniform allowance = monthly uniform allowance × 12
annual uniform allowance = $35 × 12
annual uniform allowance = $420
Step 4: Determine the total annual value of Jazmin’s job. Add her annual gross
pay and her annual uniform allowance.
total annual value of job = annual gross pay + annual uniform allowance
total annual value of job = $8,428.80 + $420
total annual value of job = $8,848.80
Check It
Arturo is a curator at a local historical museum. He earns an annual salary
of $53,160. Each month, he also receives $35 for a cell phone and $75 for travel.
Determine the total annual value of Arturo’s job.
Job expenses must also be considered when valuing a job off er. Job expenses
are any costs an employee has to pay because of the job he or she was hired to do.
For example, you may be required to purchase a uniform. Or you may be required
to provide your own tools. You may have union dues. You may have parking
expenses. Even the cost of commuting to and from work is a job expense.
You should subtract job expenses to get the true value of the job off er:
annual value of job = annual gross pay + total annual employee benefi ts –
job expenses
fyi
A stipend is another way
someone can be paid. A
stipend is an allowance to
defray costs.