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Business Math
Business Math
12 months
52 weeks
1 year 24 *Half-Months*
(for semi-monthly payment)
26 *Two-weeks* periods
(for bi-weekly payment)
S annual
Monthly Salary S monthly 12
S annual S monthly
or
Semi-Monthly Salary S semi-monthly 24 2
- Is the computed pay before the ddeduction of income tax and other deductibles (e.g.,
contributions for insurance or social insurance)
- refers to income that is computed prior to any deductions such as social security
contributions, health insurance contributions, and withholding taxes
Net Income
The gross earnings for salaried worker are often quoted on an annual basis. This annual figure is the
amount the employee earns per year. Salaries may be quoted on a different basis depending on the time
period. Usually, companies paid their salaried workers on a weekly basis, on a bi-weekly basis, on a
monthly basis, on a semi-monthly basis, or on a bi-monthly basis. Here we note that bi-weekly and bi-
monthly mean every two weeks and every two months, respectively. Likewise, semi-monthly means
every half-month. The common conversion between weekly, monthly, and annual figure is carried out
using the following table
52 weeks
1 year 24 *Half-Months*
(for semi-monthly payment)
26 *Two-weeks* periods
(for bi-weekly payment)
Therefore, given an annual salary figure (which we denote by S annual), we can obtain the
equivalent monthly, weekly, semi-monthly, bi-weekly salary by considering the following conversion
table.
S annual
Monthly Salary S monthly 12
S annual S monthly
or
Semi-Monthly Salary S semi-monthly 24 2
Example
A nationwide survey has determined that the average monthly salary of a high school teacher is
₱ 25, 600.00. On average, how much does a high school teacher earn in one year? In one week? Every
two weeks?
Solution
The given amount is salary quoted on a monthly basis. In order to convert the salary to an
annual or a yearly figure, we multiply it by 12, since there are twelve months in a year:
Based on our conversion table above, the weekly salary is obtained by dividing the annual figure
by 52,
Finally, the salary obtained every two weeks is calculated by multiplying the weekly salary by 2,
The same result is also obtained by dividing the annual salary by 26.
A wage earner’s daily gross pay is decomposed into two components—the regular pay and the
overtime pay.
Regular pay is the number of hours worked by the employee (less than or equal to eight hours)
multiplied by the applicable hourly rate. This amount is also referred to as the basic daily wage.
If W represents the total daily wage of an employee, h is the number of hours put in by the
employee that day, and r is the employee’s applicable hourly rate, then his daily regular wage is
computed as
W=hxr
Where 0 ≤ h ≤ 8. If h exceeds eight hours, then a special rate is applied to the number of hours
in excess of eight hours. This rate is called the overtime rate.