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Different Ways to Make Money: Wage, Salary and Commission

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Different Ways to Make Money: Wage, Salary and Commission

People earn an income when they are hired by an employer to work at a job. Income is earned as a wage, a salary or a sales commission.

Let’s look at an example of each:

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Andrew works as a waiter at the Pancake Hut. He earns a wage. A wage is a set amount of money per hour of work. Andrew’s wage is $10 per hour.

Ellie works as a scientist. She earns a salary. A salary is a set amount of money per year. Ellie’s salary is $50,000 per year. If she adds up all her paychecks this year, the total will equal $50,000.

Toby works as a real estate agent. He earns a sales commission. A sales commission is an amount of money based on part of a sale amount. Tony is helping a family sell their house. The family agrees to pay Tony 5% of the house’s sale price. Tony sells the house for $200,000. The family pays him $10,000, which is 5% of the $200,000 sale.

Information in this article is general in nature and for your consideration, not as financial advice. Please contact your own financial professionals regarding your specific needs before taking any action based upon this information.

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