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Piecework remuneration

Piecework remuneration pays according to the quantity of acceptable output, using a specified rate per unit. A scheme may include guaranteed time pay or differential rates above a threshold, so read the terms carefully. It can encourage output but may weaken quality, safety or cooperation if poorly designed. Costs depend on whether rejects are paid for and whether workers control the speed and supply of their work.

Worked example

At $1.50 per acceptable unit, 400 accepted units earn $600. If a guaranteed time wage of $650 applies and exceeds piecework earnings, pay $650 under that guarantee.

Common mistake

Do not pay the guarantee plus the piecework total when the contract provides only the higher of the two.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA MA Direct September 2026–June 2027
FIA FMA Direct September 2026–June 2027