SALARY, WAGE,

INCOME, BENEFITS
AND COMPUTE
GROSS AND NET
EARNINGS

Business Mathematics
Quarter 2 Week 5

Rusty C. Soramillos
Subject Teacher
OBJECTIVES:

At the end of the lesson, you must be able to

1. Define salary, wage, income benfits; and
2. Compute gross and net earnings.
 • Refers to the compensation
WHAT IS paid based on a fixed annual
SALARY?
rate. It does not depend on
the actual number of hours
worked. It is the
compensation for managerial
or administrative employees.
 • Is the compensation paid based on
WHAT IS a rate per hour worked. It is
WAGE? calculated by multiplying the
number of hours worked by the
hourly rate pay. It is the
compensation for employees
doing manual work. If they work
more than 40 hours per week,
they are entitled to an overtime
pay.
 • Refers to the amount of money
WHAT IS
INCOME OR
received by an individual for the
EARNINGS? work she/he has done. In this
context, income may mean salary
or wages
WHAT ARE
BENEFITS?

• Cover remuneration other than basic pay. It

includes vacation and sick leaves, medical and
hospitalization benefits, meal allowance,
transportation allowance, clothing allowance etc.
and incentive pay for productivity such as
commission, overrides, bonuses and non-profit
sharing.
WHAT ARE LABOR 1. Article 83 of the Labor Code states
RULES IN THE that the normal number of hours of
PHILIPPINES work of any employee shall not exceed
8 hours a day, exclusive of at least 1
PERTINENT TO THE hour lunch break.
NORMAL HOURS 2. Article 87 of the Labor Code provides
AND that an employee can work beyond 8
hours if he/she compensated for the
COMPUTATION OF extra hours by 25% of the hourly rate
OVERTIME PAY? (30% for non-regular workdays).
3. Article 93 and 94 of the Labor Code
provides the specifications for hourly
rate and overtime premium depending
on the type of workday when an
employee reports to work (I.e., regular
holiday, special holiday, rest day which
falls on regular holiday and rest day
which falls on special holiday)
GROSS
EARNINGS

• Refers to the amount an employee earns any

deductions for benefits of taxes. The calculation
of an employee’s gross earnings depends on the
way a company structures the salary and wages
of its employee. It can be Gross Semimonthly,
Gross Biweekly, Hours and Regular Pay and
Overtime Pay.
SAMPLE
GROSS EARNINGS

• Julia has to decide whether to accept a job that

offers her annual salary of P300,000. if she will
be paid semimonthly, what will be her gross
semimonthly earnings?
SAMPLE
GROSS EARNINGS

• Solution:
• Gross Semimonthly = Annual Salary / 24
• =P300,000/24
• =P12,500
SAMPLE
GROSS BIWEEKLY
EARNINGS
NET EARNINGS
WITHHOLDING TAX
WITHHOLDING TAX

• Compensation P23,500
• P20,833 w/holding tax = 0
• P23,500 – P20,833 = P2,667
• Withholding Tax = P2,667 x 20% = P533.40

• Compensation P70,000
• P66,667 w/holding tax = P10,833.33
• P70,000 – P66,667 = P3,333
• Withholding Tax = P3,333 x 30% = P999.90
• Total withholding tax = P10,833.33+P999,90 = P11,833.23
PHILHEALTH PREMIUM TABLE
 COMPENSATION = P18,000
PHILHEALTH CONTRI? = P

• Compensation x Premium rate = _______ / 2

• P18,000 x .04 = P720 / 2 = P360.00
• Employee Philhealth Contri = P360
• Employer Share = P360

• Note
• (360+360 = 720)
 EMPLOYEE PAG IBIG CONTRI = P100
MAXIMUM

• Employee Pag ibig contri = P100 maximum

• Employer Share = P100,00
THANK YOU!!!!!