SHS

Business Mathematics
Quarter 2: Module 3

1
Business Mathematics
Grade 11: Quarter 2: Module 3
First Edition, 2020

Copyright © 2020
La Union Schools Division
Region I

All rights reserved. No part of this module may be reproduced in any form without
written permission from the copyright owners.

Development Team of the Module

Author: Benidict D. Casuga, T-III

Editor: SDO La Union, Learning Resource Quality Assurance Team

Illustrator: Ernesto F. Ramos Jr., P II

Management Team:

Atty. Donato D. Balderas, Jr.

Schools Division Superintendent

Vivian Luz S. Pagatpatan, Ph.D

Assistant Schools Division Superintendent

German E. Flora, Ph.D, CID Chief

Virgilio C. Boado, Ph.D, EPS in Charge of LRMS

Lorna O. Gaspar, EPS in Charge of ABM

Michael Jason D. Morales, PDO II

Claire P. Toluyen, Librarian II

i
 Business
Mathematics
Quarter 2: Module 3

ii
 Target

Obtaining a baccalaureate degree is an edge and assurance of an individual

to get a job in an institution. Once this person is hired in a position, he will be
receiving compensation. Aside from the compensation received by this person or
employee, he is also entitled with benefits given by his employer.

What are these benefits? How can these benefits help workers in their daily
living? Which of these benefits are taxable and nontaxable? These are some of the
questions that will be answered on this learning material.

This module also talks about the opportunities and advantages of being
employed in a business or institution. You will learn about the amount to be
deducted from the salary of the employee to obtain the net earnings.

What are these standard deductions? How to compute each of the standard
deduction? These are some of the questions that will be answered on this learning
material.

This learning material will immerse you with information and activities that
will help you understand the benefits given to a wage earner. Also, it will help you
understand the standard deductions in the employee’s salary. After going through
this learning material, you are expected to:

1. List the taxable and nontaxable benefits

2. Use the concept of benefits to understand an employee’s own benefits.
3. Define each of the benefits given to wage earners (ABM_BM11SW-IIe5)
4. Distinguish taxable from nontaxable benefits (ABM_BM11SW-IIe6)
5. Enumerate the standard deductions with the corresponding computation
(ABM_BM11SW-IIe6)

1
 Lesson
1 Employee Benefits

Jumpstart

Pre-Test:

I. DIRECTIONS: Read carefully each item. Choose the letter of the best answer for
each test item. Use a separate sheet for your answers.
1. What revenue regulation of the BIR cites the non-taxable benefits?
A. RR No. 5-2011 C. RR No. 5-2013
B. RR No. 5-2012 D. RR No. 5-2014
2. It is the minimum number of days of unused vacation leave credits that can
be monetized.
A. 5 days B. 10 days C. 15 days D. 20 days
3. How much rice subsidy must be given to wage earners?
A. At most 1,500 C. less than 1,500
B. 1,500 or more D. 1,500 to 3,000

II. DIRECTIONS: Tell whether the following is taxable or non-taxable. Use a separate
sheet for your answers.

4. Monetized unused vacation leave credits

5. Wages
6. Medical cash allowance
7. Monetized value of vacation and sick leave credits
8. Rice subsidy
9. Salaries
10. Commissions
11. Clothing allowance
12. Laundry allowance
13. Royalties
14. Cash gift
15. Daily meal allowance for overtime work and night shift

Well done! Thank you for taking the test. Now, check how much you
are aware of the words used in the lesson. Do the game on the next page.

2
Activity: Find me!

Directions: Find the following words in the crossword by enclosing each. The words
in the table may be in a horizontal, vertical, or diagonal line. Record the time to finish
the game.

VACATION TAXABLE ROYALTY

LEAVE WAGE ALLOWANCE
BENEFITS SALARY SUBSIDY
HOLIDAY COMMISSION OVERTIME

G L E A V A S C H O O L B G E

I S B R O Y A L T Y A B G J W

G P V F O R W A R D E E D M F

F O F M K A L L O W A N C E O

E T R B S A L A R Y G E S W R

M I C A S Y L H K E N F R E T

I H O L I D A Y K F G I J I U

T Y M W S I O V A C A T I O N

R H M H D S R L L O V S H O M

E D I A R B T E N E T T A K E

V B S T O U W A T A K E H O M

O M S S A S A V A S K W T H S

Y S I Y I E H E T A X A B L E

T L O G F A G T I R R G R F F

J R N R O N R B Q A W E V V V

If you find all 15 words in 150 seconds, you are indeed a master hunter!

3
 Discover

Employee benefits covers remuneration other than basic pay. It includes

vacation and sick leaves, medical and hospitalization benefits, meal allowance,
transportation allowance, clothing allowance, etc. and incentive pay for productivity
such as commission, overrides, bonuses, and profit- sharing.

For the Philippines, the following benefits are given to employees.

Vacation pay: Thirteen (13) vacation days, with additional one vacation day every
year starting on second year of service and convertible to cash at the end of each
year. Maximum total vacation leave is 18 days.

Sick Leave: twelve (12) days per year for the first two years of service. With additional
one sick leave every year starting on second year of service. Maximum total sick leave
is 15 days. All unused leave days are convertible to cash in December of each year.

Holiday Pay: employees will still be paid during holidays (New Year’s day, Rizal day,
etc.) The usual amount they receive per day during working days will be the same as
the amount they will receive per day during holidays.

In lieu of vacation pay, Article 95 of the Labor Code provides for service
incentive leave for every employee who has rendered at least one year of service of 5
days with pay.

Some benefits are taxable, just like

a. Wages
b. Salaries
c. Commissions
d. Royalties, and the like

However, some benefits are non-taxable. Revenue regulations (RR) No. 5-

2011 dated March 16, 2011 published in Manila Bulletin March 18, 2011 cites the
non-taxable benefits as follows:

The BIR issued Revenue Regulations No. 5-2011 limiting the items of ‘de
minimis’ benefits that are exempt from withholding tax on compensation (WTC) or to
Fringe Benefits Tax (FBT) to the following:

1. Monetized unused vacation leave credits of private employees not

exceeding 10 days
2. Monetized value of vacation and sick leave credits paid to government
employees;
3. Medical cash allowance to dependents of employees, not exceeding
₱750.00 per employee per semester of ₱125.00 per month;
4. Rice subsidy of ₱1,500.00 or one (1) week sack of 50 kg of rice per month
amounting to not more than ₱1,500.00;
5. Uniform and clothing allowance not exceeding ₱4,000.00 per annum;

4
 6. Actual medical expenses not exceeding ₱10,000.00 per annum;
7. Laundry allowance not exceeding ₱300.00 per month;
8. Employees achievement awards, e.g., for length of service or safety
achievement, which must be in the form of a tangible personal property
other than cash or gift certificate, with an annual monetary value not
exceeding 10,000, received by the employee under an established written
plan which does not discriminate in favor of highly paid employees.
9. Gifts given during Christmas and major anniversary celebrations not
exceeding 5,000.00 per employee per annum; and
10. Daily meal allowance for overtime work and night shift not exceeding 25%
of the basic minimum wage on a per region basis.

RR 5-2011 emphasized that, all other benefits given by employers to

employees shall not be considered ‘de minimis’ benefits, and hence, shall be subject
to income tax as well as withholding tax on compensation.

Explore

Here are some enrichment activities for you to work on to master and
strengthen the basic concepts you have learned from this lesson.

Enrichment Activity 1: Fact or Bluff

Directions: Read carefully each item and tell whether it is a fact or a bluff. Write
FACT if the statement is true, otherwise write BLUFF. Use a separate sheet for your
answers.

1. Vacation pay starts only on the third year of service.

2. Clothing allowance may reach 10,000 per annum.
3. Actual medical expenses shall not exceed 100.00 per year.
4. Laundry allowance shall not exceed 300.00 per month.
5. Salaries and allowances are taxable.

Enrichment Activity 2: Complete me!

Directions: Tell whether the following is taxable or non-taxable. Write A if it is a

taxable benefit and B if it is a non-taxable benefit. Use a separate sheet for your
answers.
_____ 1. Clothing allowance _____ 6. Salary
_____ 2. Laundry allowance _____ 7. Monetized Value of vacation leave credits
_____ 3. Cash gift during Christmas _____ 8. Monetized unused vacation leave credits
_____ 4. Daily Meal Allowance _____ 9. Royalty
_____ 5. Commission _____ 10. Rice subsidy

5
 Deepen

Experiential Learning Activity:

Find a person who is a wage earner and ask him or her the benefits he or she
receive from his or her employer. This person may be a family member, relative,
friend, or any person available during this time. You may contact this person through
any means of communication. After enumerating all the benefits he or she received,
ask this person to tell something about the benefits.

Here are your guide questions:

1. What is your job?

2. What are the benefits you receive from your employer?
3. How do you define these benefits?
4. Out of the benefits you have enumerated, which among them are taxable and
non-taxable?

Kindly write the answers of the interviewee in a separate sheet of paper. Don’t forget
to follow the format below:

Name (optional): _______________________________

Position: ________________________________
Job Description: _________________________________________________________________

1. JOB:
___________________________________________________________________________
___________________________________________________________________________
2. BENEFITS:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
3. DEFINITION OF THE MENTIONED BENEFITS
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
4. TAXABLE BENEFITS:
___________________________________________________________________________
___________________________________________________________________________
NON-TAXABLE BENEFITS
___________________________________________________________________________
___________________________________________________________________________

6
 Lesson
Payroll Deductions
2

Jumpstart

Pre-Test:

Directions: Read carefully each item. Choose the letter of the best answer for each
test item. Use a separate sheet for your answers.
1. What insurance program was mandated by the Philippine government to cover
all income earners or workers in the private sector?
C. GSIS C. PhilHealth
D. Pag- Ibig Fund D. SSS
2. What is the maximum monthly salary credit in Social Security System based
from its latest revision?
A. ₱500 B. ₱1,000 C. ₱15,000 D. ₱20,000
3. How much will be deducted from your salary if your monthly salary credit is
8,000 and you are an “employed” member of SSS?
A. ₱320 B. ₱640 C. ₱960 D. ₱1,600
4. How much will be the share of your employer if you are an “employed” member
of SSS whose monthly compensation is ₱40,000?
A. ₱320 B. ₱640 C. ₱960 D. ₱1,600
5. What social insurance institution provided a defined benefit scheme under the
law which covers the employees in the public sector?
A. GSIS C. PhilHealth
B. Pag- Ibig Fund D. SSS
6. What percent of the employee’s basic salary is deducted for the GSIS
contribution?
C. 2% C. 9%
D. 3% D. 12%
7. What percent of the employee’s basic salary is paid by the employer for the
GSIS contribution?
A. 2% C. 9%
B. 3% D. 12%
8. What is the usual payment in the Pag- Ibig fund contribution following the
maximum compensation set to ₱5,000.00?
A. ₱100 C. ₱250
B. ₱200 D. ₱400

7
 9. What social health insurance program serves as the means for the healthy to
pay for the care of the sick and for those who can afford medical care to
subsidize those who cannot?
A. GSIS C. PhilHealth
B. Pag- Ibig Fund D. SSS

10. What is the premium rate of PhilHealth contribution for the year 2020?
A. 2.75% C. 3.50%
B. 3.00% D. 4.00%
11. How much will be your monthly deduction in PhilHealth if you are receiving
₱20,500 monthly salary at present?
A. ₱200.70 C. ₱410.20
B. ₱307.50 D. ₱560.10
12. Which of the following refers to the tax withheld from income payments to
individuals arising from an employer- employee relationship?
A. Donor’s Tax C. Withholding tax on compensation
B. Estate Tax D. Value Added Tax
13. How much is the withholding tax of an employee who receive ₱15,000
monthly?
A. ₱0 C. ₱100
B. ₱430 D. ₱300
14. How much is withholding tax of an employee who receive ₱20,000 monthly?
A. ₱0 C. ₱198
B. ₱430 D. ₱300
15. How much is the withholding tax of a government employee who receive a
monthly gross earning of ₱24,495?
A. ₱0 C. ₱198
B. ₱430 D. ₱300

Activity: Complete me!

Directions: Fill in the needed information for the following activity. This activity
requires the use of three fundamental operations namely addition, subtraction, and
multiplication.

SCENARIO: Assume that you are a regular employee and your basic monthly salary
is ₱20,754.00. Compute your monthly net earnings if you have the following
deductions:

GSIS contribution (9% of your basic salary)

Pag- Ibig Fund contributions (100.00)

PhilHealth (₱285.37)

8
Fill in the blanks.

Basic Salary: ₱20,754.00

DEDUCTIONS:
GSIS contribution ____________
Pag-Ibig Fund ____________
PhilHealth ____________

NET PAY: ____________

This is how you compute your net pay if you have these deductions. You may
be asking how come that GSIS contribution is 9% of your basic salary. Likewise, how
is the computation of your contribution in Pag-Ibig fund and PhilHealth?

Let us proceed with the lesson to answer these questions!

Discover

In the previous modules, you have learned that net earnings is generally less
than the gross earnings because of certain deductions. This time, you will learn
about these deductions and how they are computed.

The standard deductions in the salary of an employee are as follows:

1. Employee’s SSS contribution for private employees

2. Employee’s GSIS contribution for government employees
3. Pag-Ibig Fund Contributions for all employees
4. PhilHealth contribution for all employees
5. Withholding Taxes for all employees

SSS CONTRIBUTION

Social Security System or SSS is an insurance program mandated by the

Philippine government to cover all income earners or workers in the private sector.
All private employees are covered by this insurance program. Aside from the private
employees, self- employed and voluntary members can also become members of SSS.
The monthly contributions of members are based on the compensation of members.

The rate of contribution is based on the compensation of members. The total

amount of contribution of a member to SSS is 12% of the monthly salary credit (MSC)
not exceeding ₱20,000.00. However, the member will only pay the 4% and the
employer will pay the remaining 8%.

9
 SSS CONTRIBUTION SCHEDULE FOR EMPLOYED (effective April 2019)

Example 1. Let us say that your basic monthly salary is ₱8,100. This monthly salary
can be found in the range “7,750 – 8,249.99”. Under this range, you can see that the
monthly salary credit is ₱8,000.

Computation of SS contribution:

Your SSS contribution = 12% of MSC = 0.12 ˣ ₱8,000 = ₱960

This means that your account must pay ₱880 to SSS. However, you will not
pay the total ₱880.00. Your employer will help you pay this amount.

Employee Share (You) = 4% of MSC = 0.04 ˣ ₱8,000 = ₱320

Employer Share = 8% of MSC = 0.08 ˣ ₱8,000 = ₱640

This means that your employer will pay ₱640 for your SSS contribution. And
the remaining ₱320 will be charged to you by deducting this amount from your
gross salary.

Note: The SSS Contribution Schedule was implemented effectively April 2019. This
schedule may be revised but the process of computing will not change.

Example 2. What if your basic monthly salary is ₱40,000? What will be your monthly
salary credit? This monthly salary can be found in the range “19,750 and above”.
Under this range, you can see that the monthly salary credit is ₱20,000.

Computation of SS contribution:

Your SSS contribution = 12% of MSC = 0.12 ˣ ₱20,000 = ₱2,400

This means that your account must pay ₱2,400 to SSS. However, you will not
pay the total ₱2,400.00. Your employer will help you pay this amount.

10
 Employee Share (You) = 4% of MSC = 0.04 ˣ ₱20,000 = ₱800

Employer Share = 8% of MSC = 0.08 ˣ ₱20,000 = ₱1,600

This means that your employer will pay ₱1,600 for your SSS contribution. And
the remaining ₱800 will be charged to you by deducting this amount from your
gross salary.

ADDITIONAL INFORMATION:

The examples mentioned can be applied only for workers with employers. But
the processes in computing the SS contribution is still the same if you will compute
contributions for voluntary member, self- employed, and non-working spouse. Since
these three categories have no employers, they will all shoulder the 12% rate of
contribution and pay the total amount to SSS.

GSIS CONTRIBUTION

Government Service Insurance System or GSIS is a social insurance

institution that provides a defined benefit scheme under the law. This system does
not include employees who do not have monthly regular hours of work and are not
receiving fixed monthly compensation. This covers the employees in the public
sector. The rate of contribution is based on the compensation of members.

There are two types of insurance coverage.

1. Regular- refers to compulsory premium payments on life insurance and

retirement benefits.
2. Employees Compensation Fund- refers to premium payments paid by
your government agency so you get full coverage in case of a work- related
accident.

Rate of premium contributions are as follows:

Type of Personal Personal Government Government

Insurance Share Share Share Share
Coverage Life Retirement Life Retirement
Regular 2% 7% 2% 10%
Employees
1% not to
Compensation none 0% none
exceed ₱100
Fund

Example 3. Let us say that your basic monthly salary is ₱22,316. How much will be
deducted from your gross salary?

Computation of GSIS contribution:

Total GSIS contribution= 21% of ₱22,316 = 0.21 ˣ ₱22,316 = ₱4,686.36

This ₱4,686.36 will go to your GSIS contribution for a month. But the amount that
you will pay is,

11
 Personal Share = 9% of ₱22,316 = 0.09 ˣ ₱22,316 = ₱2,008.44

This ₱2,008.44 will be deducted from your gross salary.

You may also compute how much is the share of your agency in your GSIS
contribution.

Government Share = 12% of ₱22,316 = 0.12 ˣ ₱22,316 = ₱2,677.92

or

Government Share = Total GSIS Contribution – Personal Share

= ₱4,686.36 - ₱2,008.44

= ₱2,677.92

PAG- IBIG FUND CONTRIBUTION

The Philippine Home Development Mutual Fund (HDMF), more popularly

known as the Pag-IBIG fund, was established to provide a national savings program
and affordable shelter financing for Filipino workers. Among other things, the fund
offers its members short-term loans and access to housing programs. It is a
mandatory for all SSS- and GSIS- covered employees; uniformed members of the
AFP, BFP, BJMP, and PNP; as well as Filipinos employed by foreign- based employers.

Every employee, employer, members, OFWs must take note the latest Pag-
IBIG Contribution Table below to aid and be aware how much you are paying to Pag-
IBIG Fund every month. The usual payment is ₱100 following the maximum
compensation set to ₱5,000.

With the signing of Republic Act No. 9679, membership to the fund shall be
mandatory for the following:

a. All employees, workers, professionals, officers and companies who are

compulsorily covered by the SSS and GSIS;
b. Uniformed members of the Armed Forces of the Philippines, the Bureau
of Fire Protection, the Bureau of Jail Management and Penology, and
the Philippine National Police;
c. Overseas Filipino Workers (OFWs); and
d. Filipinos employed by foreign- based employers, whether deployed
locally or abroad.

How to compute Pag-IBIG Contributions?

The maximum monthly compensation allowed to compute each employee’s

Pag-Ibig contribution is currently set at ₱5,000. This means that the maximum
contribution a member can pay per month is currently ₱100 and the employer’s
share applied to that maximum contribution is also ₱100.

If you are employed and you are receiving more than 5,000 every month, you
will be deducted 100 every month to cover your employee share. Your employer will
also pay 100 to your Home Development Mutual Fund (employer share).

12
PHILHEALTH CONTRIBUTION

The National Health Insurance Program (NHIP) under R.A. No. 7875 was
engaged with the same purpose of providing heath insurance coverage and ensuring
affordable, acceptable, available and accessible health care services for all citizens of
the Philippines, in accordance with the policies and specific provisions of the Act.
This social health insurance program serves as the means for the healthy to help pay
for the care of the sick and for those who can afford medical care to subsidize those
who cannot (Section 5, Article III of R.A. No. 7875, as amended.

All employees, whether of private entities or government entities, are to be

members of PhilHealth. The monthly premium contributions shall be in accordance
with the monthly basic salary. The table below shows the Premium Contribution
Table for Direct Contributors.

You observe that the premium rates increase every year. Let us focus on year
2020 for our example on how to compute the monthly premium given the basic
monthly salary.

Example 5. Assume that your basic monthly salary is ₱20,500. How much will be
deducted from your gross salary?

Use the present premium rate as shown in the table. For this year 2020, the
premium rate is 3%.

Monthly Premium = 3% of Basic Monthly Salary = 0.03 ˣ ₱20,500 = ₱615

Half of ₱615 will be deducted from your salary and the other half will be paid
by your employer.

Your monthly deduction in PhilHealth = ₱615 ÷ 2 = ₱307.50

13
WITHHOLDING TAX

Withholding tax on compensation is the tax withheld from income payments

to individuals arising from an employer – employee relationship.

See tax table below for your reference in computing the employee’s tax.

14
Example 6. Assume that your basic monthly salary is ₱24,495. You have salary
deductions in GSIS, Pag-IBIG, and PhilHealth. How much will be your tax withheld?

Since the salary is received monthly, here are the last rows in the tax table which
can be used to compute the tax withheld for this example.

How to read the table?

If your salary falls under the first category with a compensation range of
“20,833 and below”, your withholding tax is 0.00. This means that you are exempted
from paying taxes if you are categorized in this level. If your salary falls under the
second category with a compensation range of “20,833 – 33,332”, your withholding
tax is 0 + 20% over 20,833. The succeeding compensation ranges correspond to a
prescribed withholding tax.

Going back to example 6,

Your basic monthly salary is ₱24,495. This compensation is in the second

category because 24,495 is in the range 20,833 – 33,332. Under this category, the
prescribed withholding tax is 0 + 20% over 20,833.

However, before computing the tax withheld, you need to consider the other
standard deductions. Since your monthly salary is ₱24,495, compute first your GSIS
contribution, Pag-IBIG fund, and PhilHealth contribution.

Basic Monthly Salary = ₱24,495

GSIS contribution = 9% of basic salary = 0.09 ˣ ₱24,495 = ₱2,204.55
Pag-IBIG = ₱100

PhilHealth = (3% of basic salary) ÷ 2 = (0.03 ˣ ₱24,495) ÷ 2 = ₱367.43

Total Deductions = ₱2,671.98

Taxable Income = Basic Monthly Salary – Total Standard Deductions

= ₱24,495 - ₱2,671.98
= ₱21,823.02

Now, compute the withholding tax given the taxable income

Withholding tax = 0 + 20% over 20,833

= 0 + 20% (21,823.02 – 20,833)
= 0 + 20% (990.02)
= ₱198.00

15
Let us apply the concepts in computing the Net Take Home Pay of an employee
who is compensated monthly.
PAYROLL PAYMENT SLIP

Pay Period: February 2020

EARNINGS
Basic Salary 26,754.00
Allowance 2,000.00
GROSS EARNINGS 28,754.00
DEDUCTIONS

GSIS 2,407.86
Pag-IBIG 100.00
PhilHealth 401.31
Withholding Tax 602.37

TOTAL DEDUCTIONS 3,511.54

NET PAY 25,242.46

PAYROLL PAYMENT SLIP EXPLANATION

In any payroll payment slip, it is important
to indicate the date because one factor of
Pay Period: February 2020 computing the deductions is the effectivity
date of the contribution schedule and tax
table.
EARNINGS Gross = Basic Salary + Allowance
Basic Salary 26,754.00 = 26,754 + 2,000
Allowance 2,000.00 = 28,754
GROSS EARNINGS 28,754.00
DEDUCTIONS 1. GSIS = 9% of Basic Salary
= 0.09 ˣ 26,754
GSIS 2,407.86 = 2,407.86
Pag-IBIG 100.00 2. Pag- Ibig: For employees receiving more
than 5,000 every month, 100.00 will be
PhilHealth 401.31
deducted to cover employee share.
Withholding Tax 602.37 3. PhilHealth= (3% of Basic Salary) ÷ 2
= [0.03 ˣ 26,754) ÷ 2
TOTAL DEDUCTIONS 3,511.54 = 410.31
4. Taxable Income:
= Basic Salary - (GSIS+Pag-IBIG+PhilHealth)
= 26,754 – (2,407.86 + 100 + 401.31)
= 23,844.83
Withholding Tax = 0 + 20% over 20,833
= 0.20 (23,844.83 – 20,833)
= 602.37
5. Total Deductions
= GSIS + Pag-Ibig +PhilHealth+ Tax
= 2,407.86 + 100 + 410.31 + 602.37
= 3,511.54
NET PAY 25,242.46
Net Pay
= Gross Earnings – Total Deductions
= 28,754.00 - 3,511.54
= 25,242.46

16
 Explore

Here are some enrichment activities for you to work on to master and
strengthen the basic concepts you have learned from this lesson.

Enrichment Activity 1: Is it a Fact or a Bluff?

Directions: Read carefully each item and tell whether it is a fact or a bluff. Write
FACT if the statement is true, otherwise write BLUFF. Use a separate sheet for your
answers.

1. GSIS stands for Government System Insurance Service.

2. Social Security System is an insurance program which covers all private
employees, self- employed and voluntary members.
3. The employee rate of premium contributions in GSIS is 9%
4. All employees, whether of private entities or government entities, are to be
members of PhilHealth.
5. Self- employed members of SSS will shoulder the 12% rate of contribution.
6. The monthly salary credit in SSS contribution schedule for employed
members earning ₱17,600 monthly is ₱17,500.
7. The premium rate of contribution in PhilHealth for the year 2023 is 4.00%.
8. The rate of personal share in GSIS contribution is 9% wherein 2% goes to life
and 10% goes to retirement.
9. The maximum monthly salary credit in SSS is 20,000 based from the new SSS
contribution schedule for employed members.
10. HDMF is mandatory for GSIS- covered employees only.

Enrichment Activity 2: Complete me!

Directions: Fill in the needed data to complete the table below. Use the latest
contribution schedule and tax table. The needed data must be the employee share
only. Do not mind the employer share.
Monthly DEDUCTIONS
Salary PAG- WITHHOLDING WITHHOLDING

(Year 2020) SSS GSIS PHILHEALTH TAX TAX

IBIG (without SSS) (without GSIS)

1 ₱13,700.00
2 ₱14,600.00
3 ₱19,500.00
4 ₱28,754.00
5 ₱30,764.00

17
 Deepen

This time, you will apply what you have learned in computing deductions in
creating a payroll. Assume that you have a permanent job and your employer hired
you in a higher position.

Assumption: You are a government employee who receive ₱28,276.00 monthly

from your employer with an allowance of ₱2,000.00. Make your own payroll for
January 2021 base from this assumption.

REMINDER: The date is important in referring to the contribution schedules

and tax table when computing deductions.

PAYROLL PAYMENT SLIP EXPLANATION

Pay Period:

EARNINGS
Basic Salary
Allowance
GROSS EARNINGS
DEDUCTIONS

GSIS
Pag-IBIG
PhilHealth
Withholding Tax

TOTAL DEDUCTIONS

NET PAY

18
 Gauge

I. Enumerate at least 3 taxable benefits and give a brief description in each of the
benefits.

1. ________________________________________________________________________
________________________________________________________________________
2. ________________________________________________________________________
________________________________________________________________________
3. ________________________________________________________________________
________________________________________________________________________

II. Enumerate at least 7 non-taxable benefits and give a brief description in each of
the benefits.

4. ________________________________________________________________________
________________________________________________________________________
5. ________________________________________________________________________
________________________________________________________________________
6. ________________________________________________________________________
________________________________________________________________________
7. ________________________________________________________________________
________________________________________________________________________
8. ________________________________________________________________________
________________________________________________________________________
9. ________________________________________________________________________
________________________________________________________________________
10. ________________________________________________________________________
________________________________________________________________________

III. Directions: Read carefully each item. Choose the letter of the best answer for
each test item. Use a separate sheet for your answers.

1. What insurance program was mandated by the Philippine government to cover

all income earners or workers in the private sector?
A. GSIS C. PhilHealth
B. Pag- Ibig Fund D. SSS
2. What social health insurance program serves as the means for the healthy to
pay for the care of the sick and for those who can afford medical care to
subsidize those who cannot?
A. GSIS C. PhilHealth
B. Pag- Ibig Fund D. SSS

19
3. What social insurance institution provided a defined benefit scheme under the
law which covers the employees in the public sector?
A. GSIS C. PhilHealth
B. Pag- Ibig Fund D. SSS
4. Which of the following refers to the tax withheld from income payments to
individuals arising from an employer- employee relationship?
A. Donor’s Tax C. Withholding tax on compensation
B. Estate Tax D. Value Added Tax
5. What is the maximum monthly salary credit in Social Security System based
from its latest revision?
A. ₱500 B. ₱1,000 C. ₱15,000 D. ₱20,000
6. How much will be deducted from your salary if your monthly salary credit is
8,000 and you are an “employed” member of SSS?
A. ₱320 B. ₱640 C. ₱960 D. ₱1,600
7. How much will be the share of your employer if you are an “employed” member
of SSS whose monthly compensation is ₱40,000?
A. ₱320 B. ₱640 C. ₱960 D. ₱1,600
8. What percent of the employee’s basic salary is deducted for the GSIS
contribution?
A. 2% C. 9%
B. 3% D. 12%
9. What percent of the employee’s basic salary is paid by the employer for the
GSIS contribution?
A. 2% C. 9%
B. 3% D. 12%
10. What is the usual payment in the Pag- Ibig fund contribution following the
maximum compensation set to ₱5,000.00?
A. ₱100 C. ₱250
B. ₱200 D. ₱400
11. What is the premium rate of PhilHealth contribution for the year 2021?
A. 2.75% C. 3.50%
B. 3.00% D. 4.00%
12. How much will be your monthly deduction in PhilHealth if you are receiving
₱21,500 monthly salary at present?
A. ₱200.70 C. ₱417.20
B. ₱322.50 D. ₱660.10
13. How much is the withholding tax of an employee who receive ₱16,000
monthly?
A. ₱0 C. ₱100
B. ₱430 D. ₱300
14. How much is withholding tax of an employee who receive ₱10,000 monthly?
A. ₱0 C. ₱198
B. ₱430 D. ₱300
15. How much is the withholding tax of a government employee who receive a
monthly gross earning of ₱24,495?
A. ₱0 C. ₱198
B. ₱430 D. ₱300

20
 ANSWER KEY
LESSON 1
PRE- TEST

1. A – RR No. 5-2011 9. taxable

2. B – 10 days 10. taxable
3. A – at most 1,500 11. non-taxable
4. Non-taxable 12. non-taxable
5. taxable 13. taxable
6. non-taxable 14. non-taxable
7. non-taxable 15. non- taxable
8. non-taxable

EXPLORE

Enrichment Activity 1: Is it a Fact or a Bluff!

1. BLUFF 4. FACT
2. BLUFF 5. BLUFF
3. BLUFF

Enrichment Activity 2: Complete me!

1. B 6. A
2. B 7. B
3. B 8. B
4. B 9. A
5. A 10. B

DEEPEN

Experiential Learning Activity: Student’s answers may vary.

LESSON 2
PRE- TEST

1. D – SSS 7. D – 12%
2. D – 20,000 8. A – 100
3. C – 960 9. C – PhilHealth
4. D – 1,600 10. B – 3.00%
5. A – GSIS 11. B – 307.50
6. C – 9%

21
 12. C – Withholding tax on 14. A – 0
compensation 15. C - 198
13. A – 0

EXPLORE

Enrichment Activity 1: Is it a Fact or a Bluff!

6. BLUFF 11. FACT
7. FACT 12. BLUFF
8. FACT 13. BLUFF
9. FACT 14. FACT
10. FACT 15. BLUFF

Enrichment Activity 2: Complete me!

Correct answers are highlighted.
Monthly DEDUCTIONS
Salary PAG- WITHHOLDING WITHHOLDING

(Year 2020) SSS GSIS PHILHEALTH TAX TAX

IBIG (without SSS) (without GSIS)

1 ₱13,700.00 540 1,233 100 205.50 0 0

2 ₱14,600.00 580 1,314 100 219 0 0
3 ₱19,500.00 780 1,755 100 292.50 0 0
4 ₱28,754.00 800 2,587.86 100 431.31 960.37 1,317.94
5 ₱30,764.00 800 2,768.76 100 461.46 1,320.16 1,713.91

DEEPEN

PAYROLL PAYMENT SLIP EXPLANATION

In any payroll payment slip, it is important
to indicate the date because one factor of
Pay Period: January 2021 computing the deductions is the effectivity
date of the contribution schedule and tax
table.
EARNINGS Gross = Basic Salary + Allowance
Basic Salary 28,276.00 = 28,276 + 2,000
Allowance 2,000.00 = 30,276
GROSS EARNINGS 30,276.00
DEDUCTIONS 1. GSIS = 9% of Basic Salary
= 0,09 ˣ 28,276
GSIS 2,407.86 = 2,544.84
Pag-IBIG 100.00 2. Pag- Ibig: For employees receiving more
than 5,000 every month, 100.00 will be
PhilHealth 401.31
deducted to cover employee share.
Withholding Tax 602.37 3. PhilHealth= (3.5% of Basic Salary) ÷ 2
= [0.035 ˣ 28,276) ÷ 2
TOTAL DEDUCTIONS 3,511.54 = 494.83
4. Taxable Income:
= Basic Salary - (GSIS+Pag-IBIG+PhilHealth)

2
 = 26,754 – (2,544.84 + 100 + 494.83)
= 23,614.33
Withholding Tax = 0 + 20% over 20,833
= 0.20 (23,614.33 – 20,833)
= 556.27
5. Total Deductions
= GSIS + Pag-Ibig +PhilHealth+ Tax
= 2,544.84 + 100 + 494.83 + 556.27
= 3,695.94
NET PAY 25,242.46
Net Pay
= Gross Earnings – Total Deductions
= 30,276.00 - 3,695.94
= 26,580.06

GAUGE

Taxable benefits are salaries, wages, commissions, and royalties. Others are non-
taxable. Student’s own definition of each of the benefits may vary.

Multiple Choice:

3
 1. D – SSS
2. C – PhilHealth
3. A – GSIS
4. C – Withholding tax on compensation
5. D – 20,000
6. C – 960
7. D – 1,600
8. C – 9%
9. D – 12%
10. A – 100
11. C – 3.50%
12. B – 322.50
13. A–0
14. A–0
15. C - 198

1
References
Printed Materials:

Commission on Higher Education. (2016). Business Mathematics, Teaching Guide

for Senior High School. Quezon City, Philippines

Mariano, Norma D. (2016). Business Mathematics. Manila, Philippines: Rex

Bookstore, Inc.

RR No. 5-2011, as further amended by RR No. 8-2012 De minimis benefits. Retrieved

October 23,2020 from https://www.philippinecpa.com/2012/12/rr-no-5-
2011-as-further-amended-by-rr.html?m=1