Guaranteed minimum earnings
Guaranteed minimum earnings in a remuneration scheme are the contractual floor payable even when calculated piecework or bonus-based earnings would be lower. The guarantee protects employees from some production and demand risks. Its calculation is separate from any statutory minimum-pay legislation, which depends on jurisdiction. Apply the exact scheme: some pay the higher of time and piecework earnings; other plans add a specified bonus to guaranteed basic pay.
Worked example
Guaranteed weekly pay is $500 and piecework earnings are $460. If the rule pays the higher figure, pay $500; if piecework reaches $540, pay $540.
Common mistake
Do not present an illustrative scheme guarantee as a verified national legal minimum or assume every scheme uses the same rule.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | MA | Direct | September 2026–June 2027 |
| FIA | FMA | Direct | September 2026–June 2027 |