Personal Income

Wages and salaries

Most people earn their living by working for somebody else - for a small firm, a company or a public authority. In other words, they sell their effort, whether on the factory floor or in an office, hospital, school or wherever, to other people who are able to use it for producing goods or services that have value to the community and can be either sold to willing purchasers or paid for by the public through taxation.

The majority of individuals, therefore, are employees working for a wage or salary. And, although it may be true that the payment we receive for working is not our sole purpose in working, it is a very important factor, possibly the most important, in our working lives. So let us first look at rates of pay and at the various bases on which such rates may be assessed.

Where an employee is required to attend eight hours a day (as distinguished from 40 hours per week) he might even suffer a deduction for lateness one morning even though he were to make up the lost time on another day. It is important to discover the exact terms of employment before accepting a job.


Where the volume of work to be done exceeds what can be completed in the normal working day, extra hours worked are usually paid at higher than standard rates, often at half as much again. Work required at weekends or on public holidays usually attracts double pay. It is customary, for convenience in making out time sheets and wage slips, for the higher hourly pay for overtime work to be expressed in terms of time instead of cash. Thus two hours' overtime at 150% of the basic wage rate would be expressed as three hours' extra work. It comes to the same thing, of course, but this practice does explain why overtime is often said to be paid at `time and a half instead of 'wage and a half .

Overtime work may be optional, compulsory or guaranteed. If it is optional you may decline to work overtime if you choose. If your contract of employment obliges you to work overtime when called upon to do so with reasonable notice you do not have a choice; were you to decline you would doubtless suffer some penalty such as loss of bonus. In some occupations, notably in those industries that are overmanned or in which trade unions have succeeded in shortening the standard working week, your employment contract might guarantee you the availability of overtime. In a very few industries overtime is both guaranteed and compulsory.


For the purchase of a house almost everybody needs finance by way of what is called a mortgage loan. This is secured by a legal charge, or 'mortgage', on the property. It is possible tc obtain mortgage loans from many sources in certain conditions - private investors, local authorities, insurance companies, and banks - but the vast majority of mortgage loans or residential property are provided by building societies.

Building societies give priority for the allocation of their limited supply of funds to their existing members. During 197S and 2012 some societies were restricting the granting... see: Mortgages

Personal And Business Finance 2018

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