Chapter 2 Understanding Your Paycheck
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Example 2-2C
See It
Melissa is an auditor for a bank. She earns an annual salary of $68,960.
Because her job requires her to travel to the diff erent branches of the bank, she
also receives a $90 monthly travel allowance. In addition, she receives a $45
monthly allowance for a cell phone. Melissa also belongs to her professional
labor union and pays monthly dues of $23.50. Determine the annual value of
Melissa’s job.
Strategy
Use the formula:
annual value of job = annual gross pay + total annual employee benefi ts –
job expenses
Solution
Step 1: Determine Melissa’s total monthly benefi ts. Add together her monthly
travel allowance and her monthly cell phone allowance.
total monthly benefi ts = monthly travel allowance + monthly cell phone
allowance
total monthly benefi ts = $90 + $45
total monthly benefi ts = $135
Step 2: Determine Melissa’s total annual benefi ts. Multiply her total monthly
benefi ts by 12 (the number of months in a year).
total annual benefi ts = total monthly benefi ts × 12
total annual benefi ts = $135 × 12
total annual benefi ts = $1,620
Step 3: Determine Melissa’s total annual job expenses. Multiply her total
monthly expenses by 12 (the number of months in a year).
job expenses = total monthly expenses × 12
job expenses = $23.50 × 12
job expenses = $282
Step 4: Determine Melissa’s annual job value. Add her annual gross pay and
total annual benefi ts. Then, subtract her total annual job expenses.
annual value of job = annual gross pay + total annual benefi ts – job expenses
annual value of job = $68,960 + $1,620 – $282
annual value of job = $70,298