DEFINITION OF TERMS

PREPARED BY: T. JOAN C. REA LIZA

 Salary is the fixed monthly amount of
money received by an employee from
his/her employer.

Wage is the amount of money given to an

individual on the basis of his/her per hour
rate.
 Income or earnings is the amount
gained by an individual or a business
in exchange of the goods or services
provided..

Compensation refers to the benefits

that an employee receives from his/her
employer.
Compensation refers to
the benefits that an
employee receives from
his/her employer.
 Piecework rate is the amount of pay for
each acceptable item produced.

Straight piecework rate is a piecework

rate where the pay is the same per item
no matter how many items are produced.
Differential piecework rate is sometimes
called escalating piecework rate. It is a
piecework rate that increases as more
items are produced.
Gross Pay
per Week
Based on
r

Wage
A regular pay is the
amount given to an
employee who rendered
the regular eight-hour a
day.
Gross pay is the total
amount of money an
employee gets before
legally sanctioned
deductions.
If the hours worked in a week
are 40 or fewer, multiply the
hours worked by the hourly
wage.

If the hours worked are more

than 40, multiply 40 hours by
the hourly wage.
 Overtime Pay
if the hours worked in a week 40 or
fewer, no overtime is paid

if the hours worked are more than 40,

subtract 40 from the hours worked,
and multiply the difference by the
overtime rate.
 1:
Macario receives a gross
semi-monthly pay of Php
17,351. what is the
annual salary of Macario?
You can enter a subtitle here if you need
it
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 percent thereof. Work performed
beyond eight hours on a holiday or rest day
shall be paid an additional compensation to the
rate for the first eight hours on a holiday or rest
day at least 30 percent thereof.
Miguel2:wants to know his
earnings from a five-day
work he commissioned. If
his pay rate is Php 375 per
hour and has a total of 42.5
hours of work on his time
 EXAMPLE 3:
Pepe receives a regular hourly wage of
Php 240. if Pepe worked for 9.5 hours
on Monday which is regular workday
and he is paid 25% more than his
regular rate for overtime, then how
uch is his gross earnings on that day.
GROSS PAY BASED ON PIECEWORK
WAGE

Some workers are paid according to

the quantity of the required output
done.
 EXAMPLE 4:
A shirt manufacturer pays a worker
Php 21 for each acceptable
embroidered logo. If the worker had
the following work record last week,
what was his gross
DATE
earnings?
NUMBER OF ACCEPTABLE
EMBROIDERED LOGO
JULY 4 221

JULY 5 230

JULY 6 243

JULY 7 232

JULY 8 209
GROSS PAY BASED ON PIECEWORK
WAGE

Some workers are paid according to

the quantity of the required output
done.
 INCOME TAXES
A regular employee is required to pay an income tax. An
income tax as described by the Bureau of Internal Revenue
(BIR) is as follows:

tax on a person's income, emoluments, profits arising from

property, practice of profession, conduct of trade or
business or on the pertinent items of gross income
specified in the Tax Code of 1997 (Tax Code), as amended,
less the deductions andf or personal and additional
exemptions, if any, authorized for such types of income, by
the Tax Code, us amended, or other special laws.
 TAX RATES
Regular employees or individuals earning purely
compensation or engaged in business on practice
of profession must know how much the BIR taxes
income. In accordance with Republic Act No.
8424 (An Act of Amending the National Internal
Revenue Code, as Amended and for Other
Purposes), tax rates sanctioned by the BIR legally
are summarized in the following table.
 Example 1: What will be the amount
of the income tax of an individual who
earns 12,000 annually from selling
tabo?

Solution : Based on the Tax Rate Table,

an individual who earns 12,000
annually has an income tax (IT) of

IT=500+(12,000-10,000)×0.10 = 700.
Example 2: What will be the amount of
the income tax of an individual who
earns *300 per day in his sugarcane
plantation in Tarlac?

Solutions: According to the Current Regional Daily

Minimum Wage Rates Non-Agriculture, Agriculture (As of
October 2016) by the National Wages and Productivity
Commission of the Department of Labor and Employment
See Appendix 1), 300 per day is within the range of the
minimum wage in Region III. Therefore, an employee
earning at a minimum wage is exempted from the income
tax.
Example 3 What will be the amount of
the income tax of an individual who
earns 80,000 annually from her sari-
sari store?

SOLUTION: Based on the Tax Rate

Table prior to TRAIN Law, an employee
who earns 180,000 annually has an
income tax of

IT=8,500+( PHP 80,000- PHP

70,000)× 0.20 = 10,500.
 Example 4
What will be the amount of the income
tax of an individual who earns 24,000
annually from selling pastillas?

Solution: Based on the Tax Rate Table

prior to TRAIN Law, an employee who
earns 24,000 annually has an income
tax of
IT = 500+(24,000-10,000)×0.10 =
1,900.
STANDARD DEDUCTION FROM
SALARIES AND WAGES
 WITHHOLDING TAX

-the amount deducted by an

employer from its employee’s
salary to pay in advance the
income imposed by the
government.
Example:
How much is the Withholding tax (WT) of
Miguel Cruz if he is single with no
dependent and has a monthly salary of Php
18000? Use the prior to TRAIN Law ?
( See appendix 2 page 238)

Solution:
WT= Php 1875 + (PHP 18000-15833) x
0.25= Php 2416
Example:
How much is the Withholding tax (WT) of
Jose Tan if he is married with one qualified
dependent and has a monthly regular wage
of of Php 18 000?

Solution:
WT= Php 1875 + (PHP 18000-17917) x 0.25=
Php 1895.75
Revised Withholding Tax under RA 10963 or
TAX REFORM FOR ACCELERATION and
INCLUSION or TRAIN LAW

- RA 10963 was signed by President Rodrigo

R. Duterte las December 19, 2017. One of
the objectives of TRAIN Law is to have a
more just and simpler but more effective
system of Tax collection.
5 % to 10% Withholding tax for Self-
employed and Professionals
Example Attorney Example: Attorney Mike
David submits his duplicates of the official
receipt he issued to his clients who sought
legal counseling last 2018. how much is
Attorney Mike’s Tax if his receipts amounted
to Php 2765 000.00
 STATUTORY
CONTRIBUTIONS
SOCIAL SECURITY SYSTEM (SSS)
-Provide benefits to its members such as
short-term loans, income subsidy incase of
death, disability, sickness, maternity, and
retirement.
REPUBLIC ACT NO. 8282
SECTION 2. (SEE ON PAGE 156)
EXAMPLE: Complete the table by
determining the corresponding salary
deduction for each regular monthly wage
that is due for SSS Contribution.

MONTHLY WAGE SSS CONTRIBUTION

12000

9000

6500

28000

14000
PhilHealth – PhilHealth premium contribution
is the total amount contributed by the
employee and employer. This is equally
divided between employee and employer.

Republic Act No. 7875 Article III, Section 5

(see on page 158)
EXAMPLE: Complete the table by
determining the corresponding salary
deduction for each regular monthly wage
that is due for PhilHealth Contribution.

MONTHLY WAGE Philhealth CONTRIBUTION

12000

900

6500

28000

14000
HOME DEVELOPMENT MUTUAL FUND (Pag-IBIG)
– to generate more savings from more filipino
workers, to administer a sustainable Fund with
integrity, sound, financial principles, and with
social responsibility and to provide accessible
funds for housing of every member

- it is also known as Pag-IBIG (Pagtutulungan sa

Kinabukasan: IKAW, BANGKO, INDUSTRIYA at
GOBYERNO)

(SEE TABLE ON PAGE 165)

EXAMPLE: Complete the table by
determining the corresponding salary
deduction for each regular monthly wage
that is due for Pag-IBIG Contribution.

MONTHLY WAGE HDMF CONTRIBUTION

12000

900

6500

28000

14000
THANKS