SALARIES AND WAGES

SALARY AND WAGE

• Salary is the compensation usually quoted annually

or monthly for an employee.
• Wage is compensation quoted in an hourly or daily
rate for an employee.
 EXAMPLES
• A tutor who is paid $200 per hour is earning a wage.
How much does he earn for a 10-hour week work?
• A university assistant professor is usually given a
monthly salary. If his salary $40000 per month, how
much does he get every two weeks?
• A minimum wage earner in Metro Manila is paid
$481 for an 8-hour workday. What is his hourly
wage?
 INCOME AND BENEFIT
• Income is money that an individual receives in
exchange for providing a good/service or through
investing capital
• Benefit is employee compensation given by an
employer on top of the basic salary/wage
• Cash Benefits – 13th month pay, bonuses, rice subsidy,
transportation allowance
• Non-cash Benefits – SSS/GSIS, Pag-ibig, PhilHealth
BENEFITS OF A WAGE EARNER

• Social Insurance (Employer counterpart)

• SSS – Social Security System (private sector)
• GSIS – Government Service Insurance System
(government employee)
• PHIC – Philippine Health Insurance Corporation (PhilHealth)
• HDMF – Home Development Mutual Fund (Pag-ibig)
• 13th month pay – 1/12 of the basic salary that an
employee received for a year
• Sick Leave – given leave with pay due to sickness;
usually 15 days for each year of service
BENEFITS OF A WAGE EARNER

• Vacation Leave – given leave with pay to go on

vacation; around 10 days for each year of service
• Maternity Leave – given to pregnant female
employees when they give birth; usually 60 calendar
days which starts on the day of giving birth (served at
least 2 years – with pay; less than 2 years – pro-rated)
• Paternity Leave – given to male employees when
their legal spouse gives birth; 7-day paid leave starting
on the day the spouse gave birth
BENEFITS OF A WAGE EARNER

• De Minimis Benefit – small values provided by the

employers to the employee (ex: clothing and rice
allowance)
• Fringe Benefit – compensation in addition to direct
wages or salaries (ex: car, house allowance, medical
insurance, etc.)
• Service Incentive Leave – every employee who has
rendered at least one year of service shall be entitled to
a yearly service incentive leave of five days with pay
BENEFITS OF A WAGE EARNER

• Solo Parent’s Leave – an additional benefit which

shall be for seven (7) working days every year, with
full pay, consisting of basic salary and mandatory
allowances
• 10 day-Leave for Victims of Violence Against
Women and their Children (VAWC) – granted to
women employees who are victims of physical,
sexual, psychological harm or suffering, or
economic abuse
BENEFITS OF A WAGE EARNER

• Special Leave for Women – leave benefit for 2

months following surgery caused by gynaecological
disorder, with full pay for female employees who
have rendered continuous service of 6 months for
the last 12 months
• Tax Exemption (For Minimum Wage Earner) –
under R.A. 9504, minimum wage earner are
exempted from income tax and withholding tax on
compensation
 TAX EXEMPTIONS FOR NON-
MINIMUM WAGE EARNERS (ANNUAL)

• Basic Personal Exemption: PhP50,000

• Mandatory exemption allowed to individual citizens of the
Philippines, regardless of status
• Additional Personal Exemption
• PhP25,000 per dependent, up to a maximum of four
dependents
• Employee’s Contribution to GSIS/SSS, PhilHealth,
and PAG-IBIG
STANDARD DEDUCTIONS
• Income Tax – this deduction is applied only to non-
minimum wage earners. (Net Taxable Income =
Gross Taxable Income – Tax Exemptions)
• GSIS/SSS Contribution
• Pag-ibig Contribution – applicable to all
employees
• PhilHealth Contribution – contribution applicable
to all employees; amount of premium is based on
salary bracket
 EXAMPLE
Employee Employee Amount Deductions Remarks
Number Name and Due
Description
87654321 De Guia, Olene

Regular Salary Php42,636

SSS Php 800

PhilHealth Php 550

Pag-ibig Php 852.72

Total Php 42,636 Php 2,202.72 Php 40,433.28

(Net Pay)
 ACTIVITY (1/4 YP)
• Mrs. Dela Cruz has a basic salary of Php 44,560
per month. Determine the following:
• Monthly SSS Contribution
• Monthly PhilHealth Contribution
• Monthly Pag-ibig Contribution
• Net Pay Per Month
 LONG TEST
• FRIDAY (October 11, 2019)
• Coverage (Salaries and Wages)
• Overtime Pay
• Benefits
• Deductionsp[bh