HUMAN RESOURCE MANAGEMENT

WAGES AND SALARIES

ADMINISTRATION
 WAGES AND SALARIES DEFINED
• Wages – paid to blue-collar employees; paid daily, weekly or
monthly; paid to jobs which can be measured in terms of
money’s worth.
• Salary – paid to white-collar employees; paid in monthly basis;
paid to employees whose contribution cannot be measured
easily.
• Compensation – a comparative term; includes wages and all
other allowances and benefits. (e.g. allowances, leave facilities,
housing, travel, and non-cost such as recognition, privileges, and
symbols of status)
 OBJECTIVE
• Apply appropriate mathematical operations in computing
salaries and wages
 TWO METHODS OF PAYING SALARIES

• By the time worked/Straight time wages

• By the Amount of Work Produced/Piece-rate wages
 FIRST METHOD OF PAYING SALARIES
By the time worked- wages are computed in terms of unit of time.

• Day-Work methods of pay - include weekly, biweekly, or on a monthly basis.

- It is common to pay workers by the day and the
term day work was adopted.
• Non-incentive Wage Plan – paying by the time worked.
• No matter how hard an employee works during an hour, the pay will be computed
by the hourly rate and no more.
• Wages under this plan are computed by multiplying the number of hours worked by
the rate hour:
• HxR=W
• H- Hours actually worked
• R- Rate per hour in pesos
• W- Total Wages earned
 FIRST METHOD OF PAYING SALARIES
• Payment on the basis of time worked is more satisfactory under the
following conditions:
1. Employees have little or no control over how much work they
produce.
2. There is no clear-cut relationship between the effort made to
produce the work and the amount of work produced.
3. Work delays occur often and are beyond the employees’
control.
4. Quality of work is very important.
5. Units of work produced cannot be distinguished and cannot
be measured.
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 IN THIS LESSON, THE STUDENTS WILL BE ABLE TO:

• Define salary and earning,

• Differentiate gross from net and
• Compute gross and net earning
 DEFINITION OF TERMS:
• Gross earning is the amount earned by any person before subtracting the
taxes, benefits, loans, and other possible deductions.
• Net earning is the amount earned by any person from the gross earnings less
the total.
• Deductions is the amount held by any authority as a form of payment for
some necessary dues like taxes, loans, etc.
• Salary – paid to white-collar employees; paid in monthly basis; paid to
employees whose contribution cannot be measured easily.
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 SECOND METHOD OF PAYING SALARIES
By Amount of Work Produced
• Incentive Wage Plan- a method of paying wages where earnings depend
on how much work the employee completes or on a related factor, such as
the quality of work.
• Piecework – most common incentive plan.
- piecework salaries are determined by the number of pieces
produced or completed, and each piece is assigned a piece
value that is called a piece rate.
• The formula for computing salaries under piecework is as follows:
• NxU=W
• N- Number of units produced
• U- Rate per unit in pesos
• W- Wages earned per day or per week
 SECOND METHOD OF PAYING SALARIES
Payment by piecework is satisfactory under the following conditions:
1. When a unit of completed work can be measured easily;
2. When there is clear relationship between a workers’ effort and
the result of his effort;
3. When the quality of work is less important than quantity, or when
quality standards are uniform and measurable.
4. When the flow of work is regular, breakdowns are few, and jobs
follow a standard procedure, with few interruptions.
 LABORS AND WAGES
• In the past, the terms used to classify/describe the type of
vocations are:
• Blue Collar: Manual Laborers
• White Collar: Office workers
• Pink Collar: jobs associated with women (e.g. nursing,
secretarial, etc.)
 LABOR AND WAGES
• In the present time, work roles are classified into 3 categories:
• Skilled Labor: workers who received specialized training to do their
jobs; developed & improved a special skill; may or may not need
to be licensed or certified by the state. This may be blue/white
collars workers.
• Unskilled Labor: workers who received no special training; have few
specific skills. These are blue collar workers.
• Professionals: Perhaps the elite of the labor grades. Workers who
need to do an advanced degree to do their jobs. These are white
collar workers.
• These are non-competing labor grades
 OVERTIME PAY
• All employees required to work beyond eight hours in one workday is entitled
to overtime pay. The basis of overtime pay is found in Article 87 of the Labor
Code.
• Article 87. Overtime work. Work may be performed beyond 8 hours a day
provided that the employee is paid for the overtime work an additional
compensation equivalent to his regular wage plus at least 25% thereof. Work
performed beyond 8 hours on a holiday or rest day shall be paid an additional
compensation equivalent to the rate for the first 8 hours on a holiday or rest day
plus at least 30% thereof.
 OVERTIME PAY | OVERTIME WORK |
WORKDAY
• Overtime Pay is the additional compensation payable to employee for
services or work rendered beyond the normal eight hours of work.
• OT Pay = OT rate x No. of hours in excess of the regular 8 hours of work
• Overtime Work. Any work performed beyond the normal 8 hours of work in
one workday is considered as overtime work.
• Workday is the consecutive 24-hour period which commences from the
time the employee starts to work and ends at the same time the following
day.
• To illustrate, if the employee regularly works from 8AM to 4PM, his regular
workday is the 24-hour period from 8AM to 8AM of the following day. Workdays
do not necessarily corresponds to calendar days.
 OVERTIME PAY RATES
• Overtime pay rates depend upon the day the work is performed,
whether it is ordinary working day, special day, holiday or rest
day.
• All employees required to work beyond the normal 8 hours are entitled
to overtime. Overtime pay rates depend upon the the day the work is
performed, whether it is ordinary working day, special day, regular
holiday or rest day.
 COMPUTATION FOR OVERTIME PAY
Ordinary day Overtime

• On an ordinary day, the overtime rate per hour is

determined as follows:
Let say the employee hourly rate is Php 57.00/hour, then the
overtime rate is Php 71.25
Php 71.56 = (Php 57.00 X 1.25%)
 COMPUTATION FOR OVERTIME PAY
On Rest day Overtime
• Let say the employee hourly rate is Php 57.00/hour To determine
the overtime rate per hour:
Overtime rate/hour = (hourly rate on rest day and special holiday X
169%)
Php 96.33 = (Php 57.00 X 1.69%)

On Special Holiday Overtime

• Let say the employee hourly rate is Php 57.00/hour To determine
the overtime rate per hour:
Overtime rate/hour= (hourly rate o n rest day and special holiday X
169%)
Php 96.33 = (Php 57.00 X 1.69%)
 COMPUTATION FOR OVERTIME PAY
On Special Holiday and at the same time rest day overtime
• Let say the employee hourly rate is Php 57.00/hour To determine
the overtime rate per hour:
Overtime rate/hour = (hourly rate o n rest day and special holiday X
195%)
Php 111.15 = (Php 57.00 X 1.95%)

On Regular Holiday Overtime

• Let say the employee hourly rate is Php 57.00/hour To determine
the overtime rate per hour:
Overtime rate/hour = (hourly rate o n rest day and special holiday X
260%)
Php 148.20 = (Php 57.00 X 2.60%)
 COMPUTATION FOR OVERTIME PAY
On Regular Holiday and at the same time Rest day Overtime
• Let say the employee hourly rate is Php 57.00/hour To determine
the overtime rate per hour:
Overtime rate/hour = (hourly rate o n rest day and special holiday X
338%)
Php 192.66 = (Php 57.00 X 3.38%)

On Double Holiday Overtime

• Let say the employee hourly rate is Php 57.00/hour To determine
the overtime rate per hour:
Overtime rate/hour = (hourly rate o n rest day and special holiday X
390%)
Php 222.30 = (Php 57.00 X 3.90%)
 COMPUTATION FOR OVERTIME PAY
On Double Holiday and at the same time Rest day
Overtime
• Let say the employee hourly rate is Php 57.00/hour
To determine the overtime rate per hour:
Overtime rate/hour = (hourly rate o n rest day and
special holiday X 507%)
Php 288.99 = (Php 57.00 X 5.07%)
 ADDITIONAL INFORMATION
• TYPES OF EMPLOYEE REWARDS
• Service Awards
• Employee of the Month
• Attendance Awards
• Safety Awards
• Company Advancement
 COLLECTIVE BARGAINING
• A process of negotiating an agreement regarding the
terms and conditions of employment through system of
shared responsibility and decision making between
labor and management.
 WHY IS COLLECTIVE BARGAINING AN
IMPORTANT ASPECT OF LABOR-
MANAGEMENT RELATIONS?
• Collective bargaining is important because it promotes the
rights and ideals of labor.
• A means of improving workers’ standard of living through just
compensation and humane working conditions
• It guarantees security of tenure and employees promotion on
the basis of seniority
• It defines the right and responsibilities of labor and
management
• It affords participation to labor in running an enterprise
through shared decision making, control, management, and
ownership of the means of production.
• It includes machinery for settling grievance or labor-disputes
on employment-related issues.
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• According to the Philippine Constitution, the following are

exempted from taxes:
• Charitable institutions, churches, convents, mosques, non-
profit cemeteries, lands and buildings and improvements –
actually, directly, and exclusively used for religious,
charitable and educational purposes (according to Article
VI, Section 28)
• All income, revenues, assets of non-stock and non-profit
educational institutions used actually, directly and
exclusively for educational purposes and all grants,
endowments, donations, contributions (subject to conditions
prescribed by law) used actually, directly and exclusively for
educational purposes (according to Article XIV Section 4)
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• Income Tax Exemptions in the Philippines 2016
• Non-stock and non-profit educational institution and
government educational institution
• Non-stock corporation and organization operated
exclusively for religious, charitable, scientific, athletic or
cultural purposes
• Non-profit civic league or organization
• Non-profit business league, chamber of commerce or
board of trade
• Cemetery company-owned and operated exclusively for
the benefit of its members
• Mutual savings bank and cooperative banks without capital
stock and shares organized and operated for mutual
purposes without profit, and development banks
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• General professional partnership formed by persons for the
sole purpose of exercising their common profession; no part
of the income is derived from engaging in any trade or
business
• A minimum wage earner or an individual pursuant to the
provisions of the National Internal Revenue Code Section 51
(2)
• A Non-resident citizen of the Philippines:
(1)who establishes to the satisfaction of the
Commissioner the fact of his physical presence abroad with a
definite intention to reside therein
(2)who leaves the Philippines during the taxable year to
reside abroad, either as an immigrant or for employment on
a permanent basis
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(3)who works and derives income from abroad and
whose employment thereat requires him to be physically
present abroad most of the time during the taxable year
(4)who has been previously considered as a non-
resident citizen and who arrives in the Philippines at any time
during the year to reside permanently in the Philippines will
likewise be treated as a non-resident citizen during the
taxable year in which he arrives in the Philippines, with
respect to his income derived from sources abroad until the
date of his arrival in the Philippines.
• Income from bonds and securities for sale in the
international market
• Prizes and winnings from a charity horse race sweepstakes
from the Philippine Charity Sweepstakes Office
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• SSS and GSIS Benefits
• Benefits received from the US government through the US
Veterans Administration
• Annual taxable income of Senior Citizens or those at least 60
years old who have income of not more than P60,000 per
year, subject to review by NEDA
• Exemption for a limited period of new and necessary
industries (RA No. 901)
• Exemption of pioneer and registered enterprises under the
Investment Incentives Act (RA No. 5186)
•
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