Lesson 8 Salary and Wages

Business
Mathematics
Salary and Wages
ADAMSONIAN PRAYER
Dear Lord,
Teach me the things that are important; to be generous with Your gifts,
compassionate to those who have less, just in the face of unfair circumstances; true
when the world’s values contradict my own; gracious when things don’t go my way,
and magnanimous when they do.
May nothing else matter, except faith in Your goodness, my neighbors, and mine.
Hope that things can get better and charity that always sets things right.
May Your special love for the poor, the mark of my uniquely Vincentian education,
be the work I excel in, the standard I constantly refer to, and my courage when I
meet You someday.
O Mary conceived without sin, pray for us who have recourse to thee.
St. Vincent de Paul, pray for us.
Attendance
OBJECTIVES:
At the end of the lesson, the students should be able to:

1. define salary, wage, income, and benefits;
2. compute gross and net earnings;
3. enumerate the standard deductions with the
corresponding computation; and
4. compute overtime pay.
Ponder on this:
How much is your ideal first salary?

Definition:
Employee Compensation
Refers to the remuneration given an employee in
exchange for his or her services
The legal and moral obligation of the business
Wages, salaries, employee benefits, and incentive pay
Definition:
WAGES
compensation quoted in a piece, hourly or daily rate
for an employee
Wages:
PIECE RATE
A worker on a “piecework” basis is paid in
proportion to the quantity of work he or she
finishes.
Wages:
PIECE RATE
 fixed piece-rate plan
Differential piece-work plan
EXAMPLE:
PIECE RATE
Suppose you are paid on a per-piece basis at the
rate of Php 2.50 per piece. How much are your
total earnings if you finish 550 pieces?
EXAMPLE:
PIECE RATE
Sally is paid on the following differential pay plan schedule.
Compute her total wage for the week if she accomplished 80
packs on Monday, 115 on Tuesday, 145 on Wednesday, 172 on
Thursday, and 217 on Friday.
Daily Rate Daily Rate
Quantity Per 100 packs Quantity Per 100 packs
Less than 100 Php 115 150-199 Php 135.50
100-149 Php 120 200 or more Php 140

WAGES:
Hourly Rate
To compute for the total pay, multiply the number of

hours of work by the hourly rate
Example:
Hourly Rate
A tutor who is paid Php 300 per hour is earning a wage.
How much does he earn for a 10-hour week of work?
Example:
Hourly Rate
A minimum wage earner in Metro Manila is paid
Php 610 for an 8-hour workday. What is his hourly
wage?
Example:
Hourly Rate
A minimum wage earner in Metro Manila is paid
Php 610 for an 8-hour workday. What is his hourly
wage?
WAGES:
Hourly Rate
Employees who work more than the required number of

hours are entitled to overtime pay.
WAGES:
Computation of Overtime Pay
Assuming that the minimum daily wage rate is Php 610,

how much is the overtime rate per hour?
Overtime Pay:
ON ORDINARY DAY
Plus 25% of the hourly rate for work performed

more than 8 hours on an ordinary day
Overtime Pay:
ON ORDINARY DAY
Leni earns the regular daily rate of Php 610. If she

works for 12 hours on a regular day, how much
would be her total day for the day?
Overtime Pay:
ON REST DAY AND SPECIAL

DAY
Employees generally have rest days, which may
not fall on a Sunday. What will happen if the
employee is made to work on a Sunday?
Overtime Pay:

DAY
Plus 30% of the hourly rate for work
performed more than 8 hours on rest days,
special days, or regular holiday
The hourly rate on rest days or special days is
130% of the regular rate
Example:

DAY
Leni earns a regular daily rate of Php 610. How much
would be her total pay if she worked on a Saturday, her
rest day?
a. She worked for 8 hours.
b. She worked for 12 hours.
Overtime Pay:
ON REST DAY WHICH FALLS ON A SPECIAL
DAY
The hourly rate on rest days or special days is
150% of the regular rate
Example:
ON REST DAY WHICH FALLS ON A SPECIAL
DAY
would be her total pay if she worked on her rest day,
which falls on Maundy Thursday?
Overtime Pay:
ON A REGULAR HOLIDAY
The hourly rate on regular holidays is 200% of
the regular rate
Example:
ON A REGULAR HOLIDAY
would be her total pay if she worked on May 1, Labor
Day.
Overtime Pay:
ON REST DAY WHICH FALLS ON A REGULAR
HOLIDAY
The hourly rate on regular holidays is 260% of
the regular rate
Example:
ON REST DAY WHICH FALLS ON A REGULAR

HOLIDAY
would be her total pay if she worked on Dec. 30, Rizal
Day, which is a regular holiday, and also her rest day?
Definition:
SALARY
It is the compensation usually quoted annually or
monthly for an employee. It can be a weekly
salary (annual salary over 52 weeks), bi-weekly
salary (annual salary over 26 weeks), and
monthly salary (annual salary over 12 months).
EXAMPLE:
SALARY
Assume that the annual salary is Php 152,500.
Compute for the following:
A. Monthly Salary
B. Weekly Salary
C. Bi-Weekly Salary
Definition:
INCOME
It is the wages and salaries received by the
employees. It can also be the commission on
sales, rental income, dividend income, royalties,
etc.
Definition:
EMPLOYEE BENEFITS
It covers remuneration other than basic pay.
 Vacation, sick, and emergency leaves
 Holiday Pay
 Meal, Transportation, and Rice Allowance
 Clothing Allowance
 Service Incentive Leave
Definition:
EMPLOYEE BENEFITS
Non-taxable benefits (items of “de minis” benefits”):
 Monetized unused vacation leave credits of private employees not
exceeding 10 days
 Monetized value of vacation and sick leave credits paid to
government employees
 Medical cash allowance to dependents of employees not exceeding
Php 750 per employee per semester or Php 125 per month
Definition:
EMPLOYEE BENEFITS
 Rice subsidy of Php 1500 or one sack of 50 kg of rice per
month to not more than Php 1500;
 Uniform and clothing allowance not exceeding Php 4000 per
annum;
 Actual medical expenses not exceeding Php 10,000 per annum;
Definition:
EMPLOYEE BENEFITS
 Laundry allowance not exceeding Php 300 per month;
 Annual achievement awards with an annual monetary value
not exceeding Php 10,000;
 Gifts during Christmas and major anniversaries not
exceeding Php 5,000 per annum;
 Daily meal allowance for overtime work and night shift not
exceeding 25% of the basic minimum wage.
Definition:
PAYROLL DEDUCTIONS
A take-home pay (net pay) of an employee is
his/her gross earnings minus some certain payroll
deductions.
Definition:
PAYROLL DEDUCTIONS
SSS (Social Security Service):
an insurance program mandated by the
Philippine government to cover all income
earners or workers in the private sector
Definition:
PAYROLL DEDUCTIONS
MPF (Mandatory Provident Fund)
Workers’ Investment Savings Program
for employees with more than Php 20,000
basic salary
Definition:
PAYROLL DEDUCTIONS
SSS (Social Security Service):
Use SSS Calculator: https://taxcalculatorphilippines.com/sss-contribution-calculator
Definition:
PAYROLL DEDUCTIONS
GSIS(Government Security Insurance System):
a social insurance institution that is exclusively
for the employees who work in government
offices
Definition:
PAYROLL DEDUCTIONS
Philhealth
It is a universal health coverage in the Philippines.
Use Philhealth Calculator: https://taxcalculatorphilippines.com/philhealth-contribution-calculator
Definition:
PAYROLL DEDUCTIONS
Philhealth
It is a universal
health coverage in
the Philippines.
Definition:
PAYROLL DEDUCTIONS
PAGIBIG
This is a home mutual development fund (HDMF).
What questions do you have?

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Business

At the end of the lesson, the students should be able to:

How much is your ideal first salary?

Quantity Per 100 packs Quantity Per 100 packs

Less than 100 Php 115 150-199 Php 135.50

100-149 Php 120 200 or more Php 140

To compute for the total pay, multiply the number of

Employees who work more than the required number of

Assuming that the minimum daily wage rate is Php 610,

Plus 25% of the hourly rate for work performed

Leni earns the regular daily rate of Php 610. If she

ON REST DAY AND SPECIAL

ON REST DAY AND SPECIAL

ON REST DAY AND SPECIAL

ON REST DAY WHICH FALLS ON A REGULAR

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