Glossary Financial Terms
P - R Pay As You Go (PAYG)
The system where employers automatically
deduct tax from each employee’s gross pay each pay period.
PAYG Summary
The summary sent to employees by their
employer(s) at the end of each financial year; outlines the
total paid to the employee and the amount of tax that was taken
out.
Payroll deductions
Amounts subtracted from gross income for
items like employee benefits.
Premium
The price charged by an insurance company
for providing insurance cover.
R Rate of return
How quickly money in a savings or investment
account grows.
Retirement planning
As Australia’s population ages, there will
be less money in public coffers to provide pensions in the
future. Retirement planning takes into consideration the amount
of money you will need to live the life you have in mind. It’s
not just a plan to create the wealth you will require, but also
ways to manage your funds into retirement, with the right
pensions or other strategies to make sure that your income is
properly managed. Retirement planning can happen at any age.
Starting planning for retirement early allows you to take
advantage of the miracle of compound interest, where you savings
earn interest on the interest!
Return
The amount received or earned on money which
has been invested.
Risk. The chance that you may not receive
the returns you are expecting or that an unfortunate event will
occur.
Revenue
Revenue is defined in aasb 1004 'Revenue' as
inflows or other enhancements, or savings in outflows, of future
economic benefits in the form of increases in assets or
reductions in liabilities of the entity, other than those
relating to contributions by owners, that result in an increase
in equity during the financial year. More generally revenue is
the accomplishments of the earning activities of an entity
during a period, resulting in increases in proprietorship. They
represent actual or expected cash inflows that have occurred or
will eventuate from delivering or producing goods, rendering
services, or carrying out other activities that represent the
entity's on-going operations.
Risk
The chance or probability that an investment
will result in a loss to an investor. Investments promising
higher returns will usually have a higher level of risk. Risk
can also often be referred to as the level of volatility returns
attached to a particular investment.
Risk management
The various ways or strategies used to
manage potential personal or financial loss.
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