Compensation and

Benefits
By Chenaye Mercado
 What is Compensation and Benefits?
• is a branch of human resources that focuses on how a company or
organization pays his or her employees and provide them with benefits. It
includes the process of determining how much an employee should be
paid and deciding what benefits should be offered.

(Q. Genius, 2022)

 Compensation
• Employee Remuneration
• Is the compensation an employee receives in return for his or her
contribution to the organization or company.
 Benefits
• These are also known as perks or fringe benefits, are provided to
employees over and above salaries and wages. These employee benefit
packages may include overtime, medical insurance, vacation, profit
sharing and retirement benefits, to name just a few.
• It shows them you are invested in not only their overall health, but their
future.
 Employee Compensation Benefit Package
• Salary increase
• Health insurance offerings (medical, dental, vision)
• Life insurance
• Parental leave
• Retirement plans
• Vacation and sick time
• Overtime pay
• Bonuses, commissions, and merit pay
• Reimbursement programs
 Two Elements of Compensation
• Fixed Pay – base pay that does not vary
• Variable Pay – pay that changes with performance or results

(MBA Karlo, 2020)

 Importance of Compensation & Benefits
• Attract and retain talented employees
• Motivate employees to achieve organization’s goals
• Used to reward employees for their hard work and dedication
• Reduce employee turnover and improve morale
 Statutory Mandatory Benefits
• also known as mandatory benefits, are entitlements that employers are
obligated by law to provide to their employees.
Examples:
 paid annual leave
 parental leave
 worker's compensation insurance
 paid sick leave
 Exceptions
 Field Personnel
 Establishments with less than ten workers (10)
 Kasambahay
 Government Employees
 Managers
 Contract-based workers
 Commission-based workers
 What is Minimum Wage?
• 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

PURPOSE:
The purpose of minimum wages is to protect workers against unduly low
pay.
 Basis for Minimum Wage Rates
• Normal working hours of 8 hours/day
 Holiday Pay
• The employee with receive the normal daily rate even if they did not come
to work during the regular holiday provided that they are present or if they
filed a leave with pay during the work day before the Holiday.
 Regular Holiday
If the work is performed on a regular holiday that is also a rest day, the
employee gets a total of 260%.
 Premium pay
• Employees are eligible to receive premium pay for working on their rest
days or special holidays. If an employee needs to work on their rest day or
special day, they receive an extra 30% of their daily salary.
 Night shift Differential
• The labor laws of the Philippines make it mandatory to pay night shift
differential to the workers working between 10PM to 6AM. The nightshift
differential must not be less than 10% of the worker's regular salary.
 Overtime
• If an employee works more than eight hours on an ordinary workday, they
are entitled to an extra 25% of their average hourly rate.