SALARIES

AND
WAGES
 SALARY
• form of payment from an
employer to an employee,
which may be specified in
an employment contract.
• compensation usually
quoted annually or
monthly for an employee.
 Find the Gross Pay
Per Paycheck Based on Salary
Pay periods
• Weekly: once a week or 52 times a year.
• Biweekly: every two weeks or 26 times a year.
• Semimonthly: twice a month or 24 times a year.
• Monthly: once a month or 12 times a year.
• For an employee who earns an annual
of P260,000, what is the
• weekly salary P260,000/ 52 = P5,000
• biweekly salary P260,000/ 26 = P10,000
• semi-monthly salary P260,000/ 24 = P10,833.33
• monthly salary P260,000/ 12 = P21,666.67
 WAGE
• monetary compensation
(or remuneration,
personnel expenses,
labor) paid by an employer
to an employee in
exchange for work done.
• quoted in an hourly or
daily rate
 PIECE-RATE HOURLY RATE
• or Piecework pay -a certain amount of money
• amount of pay for each a person is paid per hour
acceptable item they work.
produced. -standard 40 hours work
per week.
Standard Pay = No. of Working Hours x Rate per Hour

Standard Pay = No. of Units Produced x Rate per Unit

 TIME BASIS PAY

• John receives P82.50 an hour and

works for 34 hours this week. Find her
gross pay.
Gross Pay= No. of Hours worked x Hourly Rate

Gross Pay = 34 x P82.50

Gross Pay = P2,805
 PIECE RATE PAY

• Assume that Rodel paid for P14 for every

small bag he makes, if he produced 250 small
bags, what are his gross earnings?
Gross Pay= No. of Items Produced x Rate per Piece

Gross Pay = 250 x P14

Gross Pay = P3,500
• Gross earnings (gross pay): the
amount earned before deductions.
• Net earnings (net pay/take-home
pay): the amount of your paycheck.
PAYROLL
• total amount required to pay workers and
employees during a week, month or other
period.
• total sum of money to be paid out to
employees at given time.
BENEFITS OF A WAGE
EARNER
• BENEFITS
–other amount received by an employee in
addition to his salary or basic pay.
–productivity pay, clothing allowance, chalk
allowance, 13th month pay, vacation or sick
leave, bonuses, medical and hospitalization,
transportation allowance.
• INCOME
–amount earned by the person through
commission on selling a particular product,
dividend for being a stockholder, royalties as
author, or any other income as a result of
whatever business a person is involved in.
–person need not to be an employee for him to
earn an income
• COMPENSATION
–amount given an employee in return to his/her
services rendered.
–including salaries, wages and other income and
benefits like productivity pay, bonus, sick leave
stc.
 MANDATORY EMPLOYEE BENEFITS AND
CONTRIBUTION
• Social Security System (SSS)
• Government Service Insurance System (GSIS) -for
government employees
• Home Development Mutual Fund (HDMF)
• Philippine Health Insurance Corporation
(PhilHealth)
50% Employee Share
& 50% Employer Share
• Vacation Leave • 13th month
• Maternity Leave • Mid-year bonus
• Paternity Leave • Meal/Transportation
• Bereavement Leave Subsidy
• Solo Parent Leave • Attendance Bonus
• Study Leave • Rice Allowance
• Retirement
• Healthcare
 TAXABLE
AND
NON-TAXABLE BENEFITS
 TAXABLE AND NON-TAXABLE BENEFITS

• TAXATION - imposition of mandatory tax

of the government of a country to their
citizens.
– Income Tax
– Excise Tax
– Real Estate Tax
 BIR Revenue Regulation No. 5-2011

“DE MINIMIS BENEFITS”

– benefits that are exempt for withholding tax on compensation
➢ Monetized unused vacation leave credits of private
employees not exceeding 10 days during the year
➢ Monetized value of vacation leave and sick leave credits
paid to government officials and empoyees
➢ Medical cash allowance to dependents of employees, not
exceeding P750 per employee per semester of P125 per
month
 BIR Revenue Regulation No. 5-2011

➢Rice subsidy of P1,500 or one sack of 50 kilogram rice

per month amounting to not more than P1,500.
➢ Uniform and clothing allowance not exceeding P4,000
per annum.
➢ Actual medical assistance e.g. medical allowance to
cover medical and health care needs, annual/executive
check up, maternity assistance, and routine
consultations, not exceeding P10,000 per annum.
➢ Laundry allowance not exceeding P300 per month.
 BIR Revenue Regulation No. 5-2011

➢Employees achievement e.g. length of service or safety

achievement which must be in the form of tangible
personal property other than cash or gift certificate, which
an annual monetary value not exceeding P10,000.
➢Gifts during Christmas and major celebrations not
exceeding P5,000 per employee per annum.
➢Daily allowance for overtime work or night/graveyard shift
not exceeding to 25% of the basic minimum wage on a
per region basis.
 BIR Revenue Regulation No. 5-2011

➢Benefits received by an employee by virtue of a collective

bargaining agreement (CBA) and productivity incentive
scheme that the monetary value received from both CBA
and productivity incentive schemes combined do not
exceed P10,000 per employee per taxable year.
➢Gross 13th month pay and other benefits received by
officials and employees of public and private entities in
the total amount not to exceed P82,000 shall be exempt
from income taxation.
 Activity

• Basic Monthly Salary: P12,000

– Compute Monthly Contribution
Contributions Employee Share Employer Share Total
SSS
Philhealth
Pag-ibig
Total Monthly Contribution
 ASSIGNMENT

• Basic Monthly Salary: P19,250

– Compute the Net Pay

Contributions Employee Share Employer Share Total

SSS
Philhealth

Pag-ibig
Total Monthly Contribution
OVERTIME
 • amount of time someone works beyond
normal working hours

• Overtime Pay= Hourly Rate x Overtime Rate

 REGULAR HOLIDAY

• New Year's Day January 1 (Tue) • Eid'l Adha (Feast of Sacrifice) August
• Araw ng Kagitingan April 9 (Tue) 12 (Mon)
• Maundy Thursday April 18 • National Heroes Day August 26 (Mon)
• Good Friday April 19 • Bonifacio Day November 30 (Sat)
• Labor Day May 1 (Wed) • Christmas Day December 25 (Wed)
• Eid'l Fitr (Feast of Ramadhan) June • Rizal Day December 30 (Mon
5 (Wed)
• Independence Day June 12 (Wed)
 SPECIAL HOLIDAY
• Chinese New Year February 5 (Tue)
• EDSA People Power Revolution Anniversary February 25 (Mon)
• Black Saturday April 20
• National and Local Elections May 13 (Mon)
• Ninoy Aquino Day August 21 (Wed)
• All Saints' Day November 1 (Fri)
• Additional special (non-working) day November 2 (Sat)
• Feast of the Immaculate Conception of Mary December 8 (Sun)
• Additional special (non-working) day December 24 (Tue)
• Last Day of the Year December 31 (Tue)
 Overtime Rate
Work Overtime Pay Overtime Rate
Ordinary Day 125% of regular rate
Rest Day 130% of regular rate
Special Holiday 130% of regular rate
Regular Holiday 200% of regular rate
Rest day falls on a Special Holiday 150% of regular rate
Rest day falls on a Regular Holiday 260% of regular rate
1.) Given a daily rate of P494 and basic hourly rate
of P61.75, find the overtime pay on daily and hourly
rate
1. overtime pay on an ordinary day
2. overtime pay on a rest day
3. overtime pay on a special holiday
4. overtime pay on a regular holiday
5. overtime pay on a rest day falls on a special holiday
6. overtime pay on a rest day falls on a regular holiday
1. Overtime pay on an ordinary day
Overtime Pay = Daily Rate x Overtime Rate
= 494 x 125%
= 617.50

Overtime Pay = Hourly Rate x Overtime Rate

= 61.75 x 125%
= 77.19
2.) What an amount earned by a certain
employees who works 10 hours on ordinary day
if the regular rate for the job is P60/hour. Find
the gross pay.
Solution:
Hourly Rate = P60
Regular Hour = 8
Overtime = 2 hours
Solution:
Regular Pay = 8 x P60 Overtime Pay=No. of Overtime Hours Worked x Overtime Rate
= 480/day = 2 x (60 x 125%)
= 150
Gross Pay=Regular Pay + Overtime
= 480 + 150
= P630
 Problem 3

• Anna is an analyst with a total gross

earning of P25,000 per month.
–Compute total contribution in SSS, Philhealth and
Pag-ibig including employer share
–Compute net earnings
 Problem 4

• If an employee was paid P82.50 per hour.

How much did he earn for the week?
Day Hours
Monday 8
Tuesday 7
Wednesday 8
Thursday 9
Friday 8
 What is Income Tax?
• a tax that government impose on income generated by
businesses and individuals within their jurisdiction.
• imposed on all compensation and income received or
earned from practice of profession, conduct of trade in
business, and from properties
• sources of revenue for government
– fund public services
– pay government obligations
– provide goods for citizens
 • an amount that an employer withholds
from employees' wages and pays directly
to the government.
• tax deducted from salaries of employees.
 • Withholding Tax Table (2009)
• Withholding Tax Table (2018-2020)
 WITHHOLDING TAX TABLE (2009)

• De Minimis Benefits: 82,000

• Tax Exemption:
• Single, no dependents 50,000
• With Dependent 25,000 each (maximum 4 dependents)
MONTHLY 1 2 3 4 5 6 7 8
Exemption 0 0 41.67 208.33 708.33 1,875 4,166.67 10,416.67
Status + 0% over + 5% over + 10% over + 15% over + 20% over + 25% over + 30% over + 32% over
A. Table for employees without qualified dependents
1. Z 0 1 0 833 2,500 5,833 11,667 20,833 41,667
2. S/ME 50 1 4,167 5,000 6,667 10,000 15,833 25,000 45,833
B. Table for single and married employee with qualified dependent
1. ME1/S1 75 1 6,250 7,083 8,750 12,083 17,917 27,083 47,917
2. ME2/S2 100 1 8,333 9,167 10,833 14,167 20,000 29,167 50,000
3. ME3/S3 125 1 10,417 11,250 12,917 16,250 22,083 31,250 52,083
4. ME4/S4 150 1 12,500 13,333 15,000 18,333 24,167 33,333 54,167
 PROBLEM 1

• Mary, married with two qualified dependent

children, receives P16,000 (net of
SSS/Philhealth/Pag-ibig employee share only)
as a regular monthly income. Her husband is
also employed and did not claim for being the
head of the family. Compute Mary’s
withholding tax.
 PROBLEM 2

• Anna, single with one qualified

dependents. She is earning P21,500.
Find her legal deductions such as
SSS,Philhealth and Pag-ibig (employee
share only), withholding tax, and net pay.
 WITHHOLDING TAX TABLE (2023)

• De Minimis Benefits: 90,000