Republic of the Philippines

Department of Education
Region V (Bicol)
Schools Division Office

RINCONADA NATIONAL TECHNICAL VOCATIONAL SCHOOL

Sto. Domingo, Iriga City

Business mathematics
BENEFITS OF A WAGE EARNER

Salary is a fixed amount usually

associated with employee
compensation usually received on a
monthly or semi-monthly basis,
but it may be quoted in an annual sum.
Salary is a fixed amount usually
associated with employee
compensation usually received on a
monthly or semi-monthly basis,
but it may be quoted in an annual sum.
Salary is a fixed amount usually
associated with employee
compensation usually received on a
monthly or semi-monthly basis,
but it may be quoted in an annual sum.
1. MINIMUM WAGE
 A minimum wage rate was set per region, province and industry sector. This may vary
depending on the number of employees and gross sales of an enterprise and its industry
sector.
Note: Minimum wage earners are exempted from tax.
2. OVERTIME PAY
An overtime pay is an additional compensation given to an employee who renders service
beyond the maximum number of working hours per day (8 hours per day). The additional
compensation is equivalent to at least 125% of the employee’s hourly rate.
3. PREMIUM PAY
A premium pay is an additional compensation if an employee worked within 8 hours
during non-working days such as rest days and special holidays. If an employee did not rendered
work or not required to work on this day, then he is not entitled to any compensation.
4. HOLIDAY PAY
Based on the Labor Code, all employees shall be paid with their daily basic wage for
regular holidays, whether they work on that day or not.
5. NIGHT SHIFT DIFFERENTIAL
An employee who work between 10:00 PM and 6:00 AM receives an additional 10%
premium called night shift differential (NSD), also known as night shift pay.
6. 13th MONTH PAY
It is a monetary bonus which is mandated by the law that is given either in two
installments (May and December) or in full (before December 24). Generally, 13th month pay is
1/12 of the employee’s annual income or equivalent to one month basic pay.
7. SERVICE CHARGES
Service charges are the amount collected by some restaurants, hotels, night clubs, and
the like. For the employees of employers collecting service charges are entitled to an equal share
in the 85% of the total charges, while the remaining15% of the charges may be retained to the
management.
8. SERVICE INCENTIVE LEAVES
An employee who has rendered at least one (1) year of service is entitled to Service
Incentive Leave (SIL) of five days with pay which can be used for sick and vacation leave
purposes. At the end of the year, unused SIL can be converted into cash based on the salary rate.

PARENTAL LEAVES
A. MATERNITY LEAVE
According to the Expanded
Maternity Leave (EML) Bill, the law
grants each
pregnant employee 105 days of
maternity leave credits. It also allows
new mothers
to extend this leave for an additional 30
days, but this will be an unpaid leave.
B. PATERNITY LEAVE
The R.A No. 8187, or Paternity Leave
Act of 1996, grants seven (7) days of
fully
paid leave to married fathers that is
effective up to the first four
deliveries of the
legitimate spouse. Under the EML,
seven days of a woman’s paid
maternity leave
credits can be transferred to fathers,
extending the allowed seven-day
paternity to
be extended to 14 days.
C. SOLO-PARENT LEAVE
Seven (7) days leave with pay are
given to solo or single mothers and
fathers
for every year of service, aside
from their other leave privileges
(maternity or
paternity). Solo mothers can extend
their leave for 15 days, and these are
paid leaves.
9. PARENTAL LEAVES
A. MATERNITY LEAVE
According to the Expanded Maternity Leave (EML) Bill, the law grants each
pregnant employee 105 days of maternity leave credits. It also allows new mothers to extend
this leave for an additional 30 days, but this will be an unpaid leave.

B. PATERNITY LEAVE
The R.A No. 8187, or Paternity Leave Act of 1996, grants seven (7) days of fully paid
leave to married fathers that is effective up to the first four deliveries of the legitimate
spouse. Under the EML, seven days of a woman’s paid maternity leave credits can be
transferred to fathers, extending the allowed seven-day paternity to be extended to 14 days.
C. SOLO-PARENT LEAVE
Seven (7) days leave with pay are given to solo or single mothers and fathers for every
year of service, aside from their other leave privileges (maternity or paternity). Solo
mothers can extend their leave for 15 days, and these are paid leaves.
10. SPECIAL LEAVE BENEFITS FOR WOMEN
A. MAGNA CARTA FOR WOMEN
An employee who underwent surgery due to gynecological disorders and have
rendered at least six months of service in the company is entitled to two months leave
with full pay, as per R.A 9710 or the Magna Carta for Women.
B. LEAVE FOR WOMEN AND THEIR CHILDREN WHO ARE VICTIMS OF VIOLENCE
As per R.A 9262 or the Anti-Violence against Women and their Children Act 0f 2004,
victims of violence against women are entitled to 10 days leave with full pay.
11. SEPARATION PAY
 A regular employee who is validly dismissed or terminated from a company is entitled to a
separation pay, except those who are terminated due to misconduct or crime involvement.
12. RETIREMENT PAY
Upon reaching the retirement age, an employee is entitled to a retirement pay
equivalent to at least half-month salary for every year of service. A fraction of 6 months is
considered as one whole year. An employee may retire upon reaching the age of 60 or more
(voluntary retirement age), but not more than 65 (compulsory retirement age), provided the he
served for at least 5 years in the same company. Employers may give benefits to their employees
other than their regular salaries and wages called de minimis benefits that are relatively small in
value and are not taxable. Below is the updated list of de minimis benefits based on the BIR
Revenue Regulations No. 11-2018 (RR 11-2018).
DE MINIMIS BENEFITS
 monetized unused vacation leave credits of private employees not exceeding ten (10)
days during the year;
 monetized value of vacation and sick leave credits of government officials and
employees;
 medical cash allowance to dependents of employees, not exceeding ₱1,500 per
employee per semester or ₱250 per month;
 rice subsidy of ₱2,000 or one (1) sack of 50kg rice per month amounting to not more than
₱2,000;
 uniform and clothing allowance not exceeding ₱6,000 per annum;
 actual medical assistance, e.g. medical allowance to cover medical and healthcare
needs, annual medical/executive check-up, maternity, assistance and routine
consultations, not exceeding ₱10,000 per annum;
 laundry allowance not exceeding ₱300 per month;
 employee achievement awards, e.g. for length of service or safety achievement, which
must be in the form of tangible personal property other than cash or gift
certificate, with an annual monetary value not exceeding ₱10,000 received by the
employee under an established written plan which does not discriminate in favor of
highly paid employees
 gifts given during Christmas and major anniversary celebrations not exceeding ₱5,000
per annum;
 daily meal allowance for overtime work and graveyard shift not exceeding twenty-
five percent (25%) of the basic minimum wage on a per region basis; and
 benefits received by an employee by virtue of a collective bargaining agreement (CBA)
and productivity incentive schemes provided that the total monetary value received
from both CBA and productivity incentive schemes combined do not exceed ₱10,000 per
employee per taxable year.
If the employer granted more than this account, the excess might be included as a
taxable compensation income. If the excess benefits, bonuses, and the 13th month pay exceeds
₱90,000 limit, that’s the time it is taxable. To summarize the tax rules applied to all income
received by an employee, you may use the following table:
Salaries and Wages (Basic Compensation) Taxable
De Minimis Benefits Non-Taxable
Excess of De Minimis plus 13th Month Pay and Bonuses Non-Taxable
(maximum of ₱90,000)
Benefits and Bonuses in excess of ₱90,000 Taxable
 All other Benefits Taxable

Standard deductions are mandatory

and fixed amount or
a percentage of the basic salary held
by any authority as a form of
necessary dues.
STANDARD DEDUCTIONS
Standard deductions are mandatory and fixed amount or a percentage of the basic salary
held by any authority as a form of necessary dues.
A. SSS Contribution
All employees of private companies and enterprises in the Philippines are covered by the
Social Security System (SSS). It is a government agency founded in 1957 which provides
retirement and health benefits. Members can also avail salary and calamity loans.
The monthly contributions are based on the monthly salary bracket of each member.
The current SSS contribution rate effective January 2023 is 14% of the monthly salary and
this is being shared by the employer (9.5%) and the employee (4.5%).
SSS CONTRIBUTION TABLE
Monthly Salary Employee’s Share
₱2,000 and below ₱90
₱2,001 - ₱19,999.99 4.5%
₱20,000 and above ₱900

B. PhilHealth Contribution
All employees (private and government), are to be members of PhilHealth. This
agency helps the members and their beneficiaries in times of sickness. PhilHealth monthly
premium is shared equally shared by the employer and employee.
PHILHEALTH CONTRIBUTION TABLE
Year Monthly Salary Employee’s Share
₱10,000 and below ₱150
2020 ₱10,000.01 - ₱59,999.99 1.5%
₱60,000 and above ₱900
₱10,000 and below ₱175
2021 ₱10,000.01 - ₱69,999.99 1.75%
₱70,000 and above ₱1,225
₱10,000 and below ₱200
2022 ₱10,000.01 - ₱79,999.99 2%
₱80,000 and above ₱1,600
₱10,000 and below ₱225
2023 ₱10,000.01 - ₱89,999.99 2.25%
₱90,000 and above ₱2,025
C. GSIS Contribution
All government employees (permanent and non-permanent) are members of the
Government Service Insurance System (GSIS). It is government-owned and controlled social
insurance institution that provides defined benefit schemes for its members under the law.
GSIS CONTRIBUTION TABLE
Monthly Salary Employee’s Share
No min/max 9%

D. Pag-Ibig Contribution
The Home Development Mutual Fund (HDMF), more popularly known as the Pag-Ibig Fund
is a government-owned and controlled corporation established to provide national savings
program, short-term loans, and affordable shelter financing for the Filipino workers.
PAGIBIG CONTRIBUTION TABLE
Monthly Salary Employee’s Share
₱1,500 and below 1%
₱1,500 - ₱4,999 2%
₱5,000 and above ₱100

E. Income Tax
Income is taxed progressively up to 32%. The following rates apply to individuals on all
their net income derived from business or from the practice of their profession.
INCOME TAX TABLE
Annual Taxable Income Annual Income Tax
₱250,000 and below None (0%)
over ₱250,000 up to ₱400,000 20% of excess over ₱250,000
over ₱400,000 up to ₱800,000 ₱30,000 + 25% of excess over ₱400,000
over ₱800,000 up to ₱2,000,000 ₱130,000 + 30% of excess over ₱800,000
over ₱2,000,000up to ₱8,000,000 ₱490,000 + 32% of excess over ₱2,000,000
above ₱8,000,000 ₱2.41 million + 35% of excess over ₱8 million