Bonuses, allowances and holiday loading are examples of extra pay.
Bonus : A bonus is paid to employees who produce work of a high standard or volume, of for meeting important quotas, goals, or deadlines. In a lot of businesses, employees get annual bonuses (on top of their pay) for meeting certain performance targets.
Allowances : An allowance is paid to employees for work-related expenses like travelling, tools, equipment, official clothing and laundry, etc., or who work under difficult or dangerous conditions like isolated/remote areas like oceans, oil rigs, mining areas, etc.
Holiday loading : In some countries, extra pay in the form of holiday loading is offered. This involves making an extra payment during an employees’ annual leave/vacation. It is paid at a fixed percentage of 4 weeks normal pay.
Example 1 : Tim works as a truck driver in a remote mining town. He receives $ 13.25 per hour for a 36 hour week, and receives a ‘hardship allowance’ of $ 1.35 per hour for ever hour worked. What is Tim’s weekly pay?
Tim’s weekly pay = normal pay + allowances
= $13.25 x 36 + $1.35 x 36
= $477 + $48.60
Example 2 : Engineers working on an oil rig earn a salary of $87,250 plus weekly allowance of $239.65 for working under extreme and dangerous conditions. What is their fortnightly salary?
Fortnightly salary = Normal pay + Allowances
Normal pay = 87,250 ÷ 26 = $3,355.77
Allowances = $239.65 per week x 2 = $479.30
Fortnightly pay = 3355.77 + 479.30 = $3,835.07
Example 3 : A teacher earns a salary of $73,250. What is her holiday loading if it is 12.5% of 4 weeks’ normal pay?
Holiday loading = 12.5% of 4 weeks normal pay
= 0.125 x (73,250 ÷ 52 x 4)
Example 4 : The owners of Alpha Enterprises give their employees a Christmas bonus of 35% of a fortnight’s pay. What is Tom’s pay during the Christmas week if he earns $38,650 per annum?
Tom’s weekly pay = $38,650 ÷ 52
Christmas bonus = 35% of a fortnight’s pay
= 0.35 x (38,650 ÷ 26)
Tom’s earnings during Christmas week = normal pay + bonus
= $743.27 + 520.29