Formula

$$\begin{array}{llll}\hfill \text{Commission-basedsalary}& =\text{basesalary}\phantom{\rule{2em}{0ex}}& \hfill & \phantom{\rule{2em}{0ex}}\\ \hfill & \phantom{\rule{2em}{0ex}}+\text{commissionpay}\phantom{\rule{2em}{0ex}}& \hfill & \phantom{\rule{2em}{0ex}}\end{array}$$

$$\text{Commission-basedsalary}=\text{basesalary}+\text{commissionpay}$$ |

Example 1

**As a student, Superman sold advertising space in the Daily Planet newspaper. His income was a base salary of $$900$, and in addition he got a $3$ % commission on his sales. How much would Superman make in a month if he sold $$10\phantom{\rule{0.17em}{0ex}}000$ worth of advertising space? **

In this case you need to know the base salary and the commission. Then you add the two numbers together. The text tells us his base salary is $$900$. So you need to figure out what his commission is for the advertising space he sold3.

$$\text{Commission}=10\phantom{\rule{0.17em}{0ex}}000\cdot 3\phantom{\rule{0.17em}{0ex}}\text{\%}=\text{\$}300$$ |

Superman’s total income then becomes:

$$\begin{array}{llll}\hfill \text{Monthlysalary}& =\text{basesalary}\phantom{\rule{2em}{0ex}}& \hfill & \phantom{\rule{2em}{0ex}}\\ \hfill & \phantom{\rule{2em}{0ex}}+\text{commission}\phantom{\rule{2em}{0ex}}& \hfill & \phantom{\rule{2em}{0ex}}\\ \hfill & =900+300\phantom{\rule{2em}{0ex}}& \hfill & \phantom{\rule{2em}{0ex}}\\ \hfill & =\text{\$}1200\phantom{\rule{2em}{0ex}}& \hfill & \phantom{\rule{2em}{0ex}}\end{array}$$

$$\begin{array}{llll}\hfill \text{Monthlysalary}& =\text{basesalary}+\text{commission}\phantom{\rule{2em}{0ex}}& \hfill & \phantom{\rule{2em}{0ex}}\\ \hfill & =900+300\phantom{\rule{2em}{0ex}}& \hfill & \phantom{\rule{2em}{0ex}}\\ \hfill & =\text{\$}1200\phantom{\rule{2em}{0ex}}& \hfill & \phantom{\rule{2em}{0ex}}\end{array}$$

Superman made $$1200$. There are a few more terms you need to be familiar with when calculating income. These terms are gross salary and net salary. Gross salary is simply how much income you make. Net salary tells you how much of your income you take home.

You might wonder why these two are not the same. The reason for that is that workers have to pay taxes to the government. In countries around the world, this tax money pays for public services, such as education, health care, roads, and public transport, to mention a few things. We will look closer at this below.

Rule

Gross salary is your income before taxes and other fees have been paid.

Rule

Net salary is your income after taxes and other fees have been paid, which means that it is the amount of income you get to take home.

Formula

$$\text{Netsalary}=\text{grosssalary}\cdot \phantom{\rule{-0.17em}{0ex}}\left(1-\frac{\text{tax}}{100}\right)$$ |

Example 2

**How much did Minnie Mouse take home when she paid $\text{}35\text{}\phantom{\rule{0.17em}{0ex}}\text{\%}$ in taxes on her monthly salary of $\text{\$}\text{}3300\text{}$? **

$$\begin{array}{llll}\hfill \text{Netsalary}& =3300\cdot \phantom{\rule{-0.17em}{0ex}}\left(1-\frac{35}{100}\right)\phantom{\rule{2em}{0ex}}& \hfill & \phantom{\rule{2em}{0ex}}\\ \hfill & =3300\cdot 0.65\phantom{\rule{2em}{0ex}}& \hfill & \phantom{\rule{2em}{0ex}}\\ \hfill & =\text{\$}2145\phantom{\rule{2em}{0ex}}& \hfill & \phantom{\rule{2em}{0ex}}\end{array}$$ Minnie Mouse took home $$2145$ after taxes when she had a monthly salary of $$3300$ and paid $35$ % in taxes.

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What Are the Different Types of Income?

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How Does Tax and Tax Basis Work?