BM QUARTER 2 reviewer -similar to computing straight commission.

COMMISSION - amount paid to dealers or COMMISSION ON INSTALLMENT BASIS

salesperson based on the percentage of the -commision not based on sales,but on the
sales. collection or payments made by buyers.

c= Commission CURRENT INCREASED BALANCE

r= Commission rate -total amount a client has to pay that includes
s= Sales penalties or interest incurred penalties or
interest incurred by unpaid balance that was
FORMULA not paid on time.
C= s x r
S= _c_ TYPES OF COMPENSATION
r 1.Salary and Wage
r= _c_
s SALARY- compensation usually quoted
annually or monthly for an employee
Types of Commission
-Compensation paid to those employees
1.STRAIGHT COMMISSION occupying
-earned when an employee gets paid only on
percentage of sales commission is the entire CONVERSION OF THE PERIODIC
salary. PAYMENT:

2.SALARY PLUS COMMISION Weekly salary: annual salary is divided by 52

-earned when sales person receives a fixed Bi-weekly salary: annual salary is divided by
monthly salary and a percentage of his/her 26
sales. Monthly salary: annual salary is divided by 12
Semi-monthly salary: annual salary is divided
3.GRADUATED COMMISSION by 24
-commission rate increases as the sales
amount increases. WAGE - compensation quoted in an hourly or
daily rate for an employee.
SC= P+C
SC= P+SxR PIECE RATE
– pay depends on the number of pieces
SC= salary plus commission produced.
P= monthly pay
HOURLY RATE
OVERRIDES – pay depends on the number of hours
-earnings or incentives computed as worked.
commissions of perople working under his/her.

COMMISSION ON CASH BASIS

DAILY RATE
– pay depends on the number of days
worked.
GROSS EARNINGS
-the amount earned by an individual before
taxes and other possible deductions are made.
NET EARNINGS
-the amount earned by an individual after
deductions are made from the gross earnings
COMPARISON BETWEEN SALARY AND
WAGE
SALARY
-pay that is usually released every 15 days
other companies or offices release this pay on
a monthly basis.
-Salary earners are not paid less if they work
for only a fraction of the required number of
hours;
they are also not paid for working overtime.
WAGE
-pay received by workers either weekly or
sometimes even monthly at their employer's
convenience.
-Wage earners are under the “no work, no pay
policy” which means they are only paid the
actual number of hours or days that they
worked or number of pieces produced.
MINIMUM WAGE
- Minimum wage is “the minimum amount of
remuneration that an employer is required to
pay wage earners for the work performed
during a given period, which cannot be
reduced by collective agreement or an
individual contract”.
BENEFITS
-Different kinds of non-wage compensation
given to employees in addition to their regular
wages or salaries.
-Increase the economic security of employees
and improve satisfaction therefore retention in
the company.
Benefits of a Salary/Wage Earner
1.Social Insurance / Institutional
- private companies and government
employees are required by law to contribute to
the social insurance funds.
Social Insurance Agencies:
a. SSS – Social Security System (for
employees in the private sector)
b. GSIS – Government Service Insurance
System (for government employees)
c. Philhealth – Philippine Health Insurance
Corp. (PHIC) - for all employees
d. HDMF – Home Development Mutual Fund
(Pag-ibig Fund)
(Pag-Ibig – Pagtutulungan sa Kinabukasan,
Ikaw, Bangko, Industriya at Gobyerno)
2. Personal/Individual
a. 13th Month Pay – mandatory 1/12 of the
basic salary that an employee received for a
year
b. Paternity Leave – benefit given to male
employees when their legal spouse gives birth
(7 days)
c. Solo Parent’s Leave – parental leave of 7
working days per year, with full pay
d. Service Incentive Leave – five (5) days
leave of absence with pay per year (may be
forced or converted to cash)
3.Company Initiated Benefits
a. Sick Leave – leave with pay due to sickness
- usually 15 days for each year of service
b. Vacation Leave – leave with pay to go on
vacation
- usually around 10 days for each year of
service
c. Maternity Leave – benefit for pregnant
female employees when they give birth
- currently approved: 105 calendar days
- for those who served for at least 2 years
– paid leave
- for those who served less than 2 years –
pro- rated
d.Performance-based Increase
- given based on how well the employee
works
e.Bonuses
- Christmas, mid-year
f. Fringe Benefits – compensation in addition
to direct wages, or salaries.
- may be taxable
- company car, house allowance, medical
insurance, paid holidays, pension schemes,
subsidized meals.
g. De Minimis Benefits
- benefits of relatively small values
provided by employers to the employee on top
of the basic compensation intended for the
general welfare of the employees
Examples: clothing allowance; chalk
allowance; rice allowance, all other benefits
that are non-taxable
h. Tax Exemptions
i. Retirement Benefit
Retirement Pay Law, states that an employee
will be qualified for retirement benefits if he/she
retires at the age of 60 and if he/she has
worked for the company for at least 5 years.
The benefit (from RA 7641) upon retirement
shall be “one-half month salary for every year
of service.” According to Zalamea (2017), RA
7641 goes on to further define that “one-half
month” includes ALL of the following three
components:
a. 15 days salary
b. cash equivalent of 5 days of service
incentive leave, and
c. 1/12 of the 13th month pay
j. Separation Pay
- given to an employee who is “terminated due
to installation of labor-saving devices,
redundancy, retrenchment, closure or
cessation of business or incurable disease.”
-“In cases of installation of labor-saving
devices or redundancy, the employee is
entitled to receive the equivalent of one month
pay or one month for every year of service,
whichever is higher.
-In cases of retrenchment, closure or cessation
of business or incurable disease, the employee
is entitled to receive the equivalent of one
month pay or one-half month pay for every
year of service, whichever is higher.
TAXABLE BENEFITS
-Fringe benefits to managerial and
supervisory employees are taxable with the
32% fringe benefit tax, which is a final tax
except for “de minimis benefits” and benefits
provided for the convenience of the employer.

NON TAXABLE BENEFITS
1. The 13th month pay and other bonuses not
exceeding a total of P90,000 are also non-
taxable under the TRAIN.
2. Monetized unused vacation leave credits of
private employees not exceeding 10 days
during the year.
3. Monetized value of vacation and sick leave
credits paid to government officials and
employees.
4. Medical cash allowance to dependents of
employees, not exceeding Php1500 per
employee per semester or Php250 per month.
5. Rice subsidy of Php2000 per month or 50
kilos of rice.
6. Uniform and clothing allowance not
exceeding Php 6000 annually.
7. Actual Medical assistance not exceeding
Php10000 per year.
8. Laundry allowance not exceeding Php300
monthly.
9. Employee achievement awards not
exceeding Php10000 per year.
10. Gifts not exceeding Php5000 per year.
11. Meal allowance for overtime work not
exceeding 25% of the basic minimum wage.
12. Benefits received by employees through
the collective bargaining agreement (CBA) and
productivity incentive schemes provided that
the total monetary value received from both the
CBA and the productivity incentive schemes
combined do not exceed Php10000 per
employee per taxable year.
OVERTIME PAY
DEFINITION OF TERMS
Gross Pay – (or gross earnings) – computed
by taking the sum of the regular or basic pay
and the overtime pay.
Regular Pay – compensation computed by
multiplying the number of hours worked and
the hourly rate.
Overtime Pay / Premium – excess payment
over the regular rate; compensation computed
by multiplying the number of overtime hours
worked and the overtime rate.
OVERTIME PAYS
Legal Bases for Overtime Pays
1. Article 87 of the Labor Code (work
beyond eight hours)
a.Overtime Rate on Regular Days
- regular hourly rate + 25% thereof
(1.25 or 125%)
b. Work performed beyond eight hours on a
holiday or rest day = rate of the first eight hours
on a holiday or rest day plus at least thirty
percent (30%) thereof.
- holiday rate + 30% thereof (1.3 or 130%)
2. Article 93 of the Labor Code
a. for work done on employee’s rest day or
Sunday.
Overtime rate = regular rate + 30%
thereof
b. for work done on any special holiday
 Overtime rate = regular rate + 30%
thereof
c. for work on rest day which is special holiday
Overtime rate = regular rate + 50%
thereof
d. higher rate may be given under the
collective bargaining agreement or any
contract between the employee and employer
e. when no regular work day nor regular rest
day
Overtime rate = regular rate + 30% thereof
(on Sundays and holidays )
3. Article 94 of the Labor Code
a. Work on rest day which is a special
holiday
Overtime rate = (1.5) (regular rate)
b. Work on regular holiday
Overtime rate = (2) (regular rate)
c. Work on rest day which is a regular
holiday
Overtime rate = (2.6) (regular rate)
STANDARD DEDUCTIONS
NET EARNINGS
- also called net pay or take home pay
amount of money an employee obtains after
deductions are made.
N= G-D
N = net earnings
G = gross earnings
D = deductions
DEDUCTION
-Amount taken out of the employee’s gross
earnings for employee benefits, taxes, and
other dues.
-Employee’s SSS contribution for private
company employees.
-Employee’s GSIS contribution for government
employees.
-PhilHealth contribution for all employees.
-Withholding Taxes for all employees
-Salary advances or temporary vales (IOUs)
-Union dues
-Tardiness or Absence
SSS CONTRIBUTION
-All employees of private enterprises pay SSS
contributions as members.
-Other members include self-employed,
voluntary, and OFWs.
-In exchange for the said monthly
contributions, members will enjoy insurance
benefits such as sickness, maternity, disability,
retirement, death and funeral and salary loan.
-The contribution rate is 14% of the monthly
salary credit not exceeding Php 20000 being
shared by the employer (9.5%) and the
employee (4.5%).
-WISP is a provident fund scheme managed by
SSS intended as another savings for private-
sector workers and other individual members.
It was implemented in January 2021 as part of
the landmark provisions under Republic Act
No. 11199 (the Social Security Act of 2018).
The program aims to help members to raise
their savings for higher retirement benefits in
the future.
PHILHEALTH CONTRIBUTION
-PhilHealth reduces the members’ expenses
during confinement or availment of selected
health services.
-Contribution is 4.00% of employee’s monthly
salary and is divided equally between the
employee and the employer.
-All employees, workers, professionals, officers
and companies who are compulsorily covered
by the SSS and GSIS.
-Uniformed personnel of the AFP, BFP, BJMP,
and PNP
-OFWs
-Filipinos employed by foreign-based
employers, whether deployed locally or abroad.

GSIS CONTRIBUTION WITHHOLDING TAXES

-All government employees holding permanent
and non- permanent positions are members of
the GSIS.
-Premium contributions are based on monthly
compensation.
-Section 11 of the Revised Implementing Rules
and Regulations of RA 8291 approved on June
23, 2010 under Board Resolution No. 88
provides that the rate of contribution payable
by the member and the government agency
shall be nine (9) per cent and 12 per cent,
respectively, based on the actual monthly
salary of the member.
-Tax withheld from income payments of
individuals arising from employer- employee
relationship.
-current computation is based on the TRAIN
(Tax Reform for Acceleration and Inclusion)
Law.
ABSENCE/TARDINESS
For Tardiness:
- Determine the hourly rate then multiply
this hourly rate by the number of minutes tardy.
For

PAG-IBIG CONTRIBUTION FUND Absence:

- Determine the daily rate then multiply this
-The Home Development Mutual Fund daily rate by the number of days absent.
(HDMF), more popularly known as the Pag-ibig
Fund, was established to provide a national
savings program and affordable shelter FORMULAS:
financing for the Filipino workers.
<COMMISSION>
-The Fund offers its members short-term loans,
and access to housing programs. C=Sxr C = commission
S = _c_ r = commission rate
-As mandated by RA 9679, membership is r s = sales
mandatory for the following: r = _c_ SC = salary plus commission
s P = monthly pay
SC = P + C
SC = P + S x r Annual gross income = (monthly
salary)(12) + (living allowance)(12)
<GROSS PAY>
a.) P = (annual salary) ½ <NET EARNINGS>
b.) C1 = s1 x r1
c.) C2 = s2 x r2 Net earnings = gross earnings – deductions
d.) Gross pay = P + c1 + c2
<GROSS EARNINGS>
<COMMISSION ON CASH BASIS>
Gross earnings = deductions + net earnings
C=sxr
<PHILHEALTH>
<COMMISSION ON INSTALLMENT BASIS>
Monthly salary x (0.04) / 2
a.) CM = (MP) (r)
b.) CT = (CM) (t) <GSIS>

<MONTHLY SALARY> Monthly salary x 9% or 0.09

= Annual Salary ÷ 12 <PAG-IBIG FUND>

<SEMI MONTHLY> Php 100

= Annual Salary ÷ 24 <ABSENCE>

<BI - WEEKLY SALARY> Absence = (Monthly Salary / 26)(No. of days

absent)
= Annual Salary ÷ 26

<WEEKLY SALARY>

= Annual Salary ÷ 52

<RETIREMENT PAY>

R = 22.5 x P x T

<DIVIDEND INCOME>

Dividend income = (no. of shares)(par

value)(dividend rate)

<ANNUAL GROSS INCOME OR EARNINGS>