BMSH2202 BMSH2202

SALARIES AND WAGES Time Basis Pay

Introduction to Salaries and Wages (Sirug, 2018) Most of the time, employees’ earnings are based on time worked, especially in office-related work. The
compensation is usually stated as the specific hourly rate, day, week, month, or year. The following
Compensation is a way to provide monetary value to employees in exchange for their work/service examples show how time basis pay is being computed.
performed. It is usually presented on the payroll. Payroll is the total amount required to pay workers and
employees during a week, month, or another period. It is also defined as the total sum of money paid to Example:
employees at a given time. Rojen Mae Yap receives P82.50 an hour and works for 34 hours this week. Find her gross pay.
Gross pay (or gross earnings) is the total amount of an employee’s earnings before deductions have been Solution:
made by the employer. It may be in the form of salary or wage, on either a time rate or a piece rate, and Given: Hourly rate = P82.50
other forms of remuneration. Conversely, wage is the monetary remuneration computed on an hourly, Number of Hours Worked = 37
daily, weekly, or piece work basis. A fixed weekly or monthly wage is usually called a salary. Salary can be
𝑅𝑒𝑔𝑢𝑙𝑎𝑟 𝑃𝑎𝑦 = 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐻𝑜𝑢𝑟𝑠 𝑊𝑜𝑟𝑘𝑒𝑑 × 𝐻𝑜𝑢𝑟𝑙𝑦 𝑅𝑎𝑡𝑒
computed in a prorating annual salary or time basis pay or by piecework. = 37 × 𝑃82.50
Companies usually pay employees weekly, biweekly, semi-monthly, or monthly. In this manner, = 𝑃3,052.50
employees can manage their money based on their pay schedule. The computation of salaries is as Thus, her total gross pay is 𝑃3,052.50
follows:
𝑊𝑒𝑒𝑘𝑙𝑦 𝑆𝑎𝑙𝑎𝑟𝑦 = 𝐴𝑛𝑛𝑢𝑎𝑙 𝑆𝑎𝑙𝑎𝑟𝑦 ÷ 52 Piece-Rate Pay
𝐵𝑖𝑤𝑒𝑒𝑘𝑙𝑦 𝑆𝑎𝑙𝑎𝑟𝑦 = 𝐴𝑛𝑛𝑢𝑎𝑙 𝑆𝑎𝑙𝑎𝑟𝑦 ÷ 26 Workers in factories and industries are often paid according to the number of pieces/units they produce,
𝑆𝑒𝑚𝑖 − 𝑚𝑜𝑛𝑡ℎ𝑙𝑦 𝑆𝑎𝑙𝑎𝑟𝑦 = 𝐴𝑛𝑛𝑢𝑎𝑙 𝑆𝑎𝑙𝑎𝑟𝑦 ÷ 24 which is usually called piecework or piece-rate pay. In some cases, workers who produce/sell more than
𝑀𝑜𝑛𝑡ℎ𝑙𝑦 𝑆𝑎𝑙𝑎𝑟𝑦 = 𝐴𝑛𝑛𝑢𝑎𝑙 𝑆𝑎𝑙𝑎𝑟𝑦 ÷ 12 the standard quota of units were given incentives. A worker is paid the guaranteed wage (i.e., hourly,
daily, weekly, or monthly) for producing the standard quota of units and is paid at the same rate for
Another way of computing the remuneration of employees by using the formula for EMR (Equivalent producing/selling extra units within the standard work period.
Monthly Rate) of monthly paid employees is:
Only the standard wage is paid if production/sales do not meet or exceed the quota. On the other hand,
𝐸𝑀𝑅 = (𝐴𝑝𝑝𝑙𝑖𝑐𝑎𝑏𝑙𝑒 𝐷𝑎𝑖𝑙𝑦 𝑅𝑎𝑡𝑒 × 365) ÷ 12 if the production/sales exceed the quota, the worker will receive a standard pay and a premium for the
The factor of 365 days consists of 302 ordinary working days, 51 rest days, 10 regular holidays, and two extra units.
(2) special days. 𝑆𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑃𝑎𝑦 = 𝑁𝑜. 𝑜𝑓 𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐻𝑜𝑢𝑟𝑠 × 𝑅𝑎𝑡𝑒 𝑝𝑒𝑟 𝐻𝑜𝑢𝑟
Example: 𝑆𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑃𝑎𝑦 = 𝑁𝑜. 𝑜𝑓 𝑈𝑛𝑖𝑡𝑠 𝑃𝑟𝑜𝑑𝑢𝑐𝑒𝑑 × 𝑅𝑎𝑡𝑒 𝑝𝑒𝑟 𝑈𝑛𝑖𝑡
For an employee who earns an annual salary of P260,000, compute for the items below. 𝑃𝑟𝑒𝑚𝑖𝑢𝑚 𝑃𝑎𝑦 = (𝐸𝑥𝑡𝑟𝑎 𝑈𝑛𝑖𝑡𝑠 ÷ 𝑄𝑢𝑜𝑡𝑎 𝑈𝑛𝑖𝑡𝑠) × 𝑆𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑃𝑎𝑦
a. Weekly Salary
𝑇𝑜𝑡𝑎𝑙 𝑃𝑎𝑦 = 𝑆𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑃𝑎𝑦 + 𝑃𝑟𝑒𝑚𝑖𝑢𝑚 𝑃𝑎𝑦
b. Biweekly Salary
c. Semi-monthly Salary Example:
d. Monthly Salary Assume Rodel Morada is paid P14 for every small bag he makes. If he produced 250 small bags, what are
his total earnings?
Solution:
Given: Annual Salary = P260,000 Solution:
a) 𝑊𝑒𝑒𝑘𝑙𝑦 𝑆𝑎𝑙𝑎𝑟𝑦 = 𝐴𝑛𝑛𝑢𝑎𝑙 𝑆𝑎𝑙𝑎𝑟𝑦 ÷ 52 Given: Rate per piece = P14
= 𝑃260,000 ÷ 52 Number of items produced = 250
= 𝑷𝟓, 𝟎𝟎𝟎
𝑇𝑜𝑡𝑎𝑙 𝐸𝑎𝑟𝑛𝑖𝑛𝑔 = 𝑇𝑜𝑡𝑎𝑙 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐼𝑡𝑒𝑚𝑠 𝑃𝑟𝑜𝑑𝑢𝑐𝑒𝑑 × 𝑅𝑎𝑡𝑒 𝑝𝑒𝑟 𝑃𝑖𝑒𝑐𝑒
b) 𝐵𝑖𝑤𝑒𝑒𝑘𝑙𝑦 𝑆𝑎𝑙𝑎𝑟𝑦 = 𝐴𝑛𝑛𝑢𝑎𝑙 𝑆𝑎𝑙𝑎𝑟𝑦 ÷ 26 = 250 × 𝑃14
= 𝑃260,000 ÷ 26 = 𝑃3,500
= 𝑷𝟏𝟎, 𝟎𝟎𝟎
Thus, Rodel’s total earnings are P3,500.
c) 𝑆𝑒𝑚𝑖 − 𝑚𝑜𝑛𝑡ℎ𝑙𝑦 𝑆𝑎𝑙𝑎𝑟𝑦 = 𝐴𝑛𝑛𝑢𝑎𝑙 𝑆𝑎𝑙𝑎𝑟𝑦 ÷ 24
= 𝑃260,000 ÷ 24 Holiday and Rest Day Compensation
= 𝑷𝟏𝟎, 𝟖𝟑𝟑. 𝟑𝟑 In the Philippines, holidays are grouped into two (2):
d) 𝑀𝑜𝑛𝑡ℎ𝑙𝑦 𝑆𝑎𝑙𝑎𝑟𝑦 = 𝐴𝑛𝑛𝑢𝑎𝑙 𝑆𝑎𝑙𝑎𝑟𝑦 ÷ 12
= 𝑃260,000 ÷ 12
= 𝑷𝟐𝟏, 𝟔𝟔𝟔. 𝟔𝟕

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• Regular holidays – holidays that usually have a fixed date, such as New Year's Day, Independence Overtime Pay
Day, and Christmas Day. The only exceptions to this rule are National Heroes Day and the religious Article 83 of the Labor Code states that the normal working hours of an employee shall not exceed eight
holidays of Maundy Thursday, Good Friday, Eid’l Fitr, and Eidul Adha. (8) hours a day. Working hours over eight (8) hours is called overtime work. However, Article 87 of the
New Year’s Day January 1 same code provided that the employee shall be paid the following for the overtime work:
Maundy Thursday Movable Date • An additional compensation equivalent to his/her regular wage plus at least 25% thereof.
Good Friday Movable Date • Additional compensation is equivalent to the first eight (8) hours rate plus at least thirty percent
Araw ng Kagitingan April 9 (30%) if it is done on a holiday or rest day.
Labor Day May 1
Independence Day June 12 The table below summarizes the computation of overtime pay.
National Heroes Day Last Sunday of August Overtime on Overtime Pay
Bonifacio Day November 30
Christmas Day December 25 Ordinary Day (𝑂𝐷𝑂𝑇 ) Hourly Rate x 125% x Hours Worked
Rizal Day December 30 Rest Day (𝑅𝐷𝑂𝑇 ) Hourly Rate x 130% x Hours Worked
• Special holidays – holidays which have a flexible date. They are usually enacted by Congress and can Special Holiday (𝑆𝐻𝑂𝑇 ) Hourly Rate x 169% x Hours Worked
also be declared under the judgment of the President.
Regular Holiday (𝑅𝐻𝑂𝑇 ) Hourly Rate x 260% x Hours Worked
EDSA Revolution February 25
Ninoy Aquino Day August 21 Special Holiday which falls on Rest Day (𝑆𝐻𝑅𝐷𝑂𝑇 ) Hourly Rate x 195% x Hours Worked
All Saints Day November 1
Chinese New Year Movable Date Regular Holiday which falls on Rest Day (𝑅𝐻𝑅𝐷𝑂𝑇 ) Hourly Rate x 338% x Hours Worked
Black Saturday Movable Date e Date
Eid’l Fitr Movable Date Date Example:
Eid ul-Adha Movable Date Allan is an employee in a manufacturing firm. He is paid a basic wage of P395.20 and a cost-of-living
allowance (COLA) of P98.80. Find the overtime compensation of Allan if he will work for 10 hours in a/an:
The table below shows the summary of compensation for rest days and holidays. • Ordinary Day
Holidays Rate • Rest Day
Rest Day (RD) (Basic Wage x 130%) + COLA • Special Holiday
Special Holiday (SH) (Basic Wage x 130%) + COLA • Regular Holiday
Regular Holiday (RH) (Basic Wage + COLA) x 200% • Special Holiday which falls on Rest Day
Special Holiday which falls on Rest Day (SHRD) (Basic wage x 150%) + COLA • Regular Holiday which falls on Rest Day
The cost-of-living allowance (COLA) is an amount of money that a worker gets in addition to his or her normal
pay. It is given to allow workers to cope with the continuing increase in the price of essential commodities. Solution:
Example: • (𝑂𝐷𝑂𝑇 ) = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑅𝑎𝑡𝑒 𝑥 125% 𝑥 𝐻𝑜𝑢𝑟𝑠 𝑊𝑜𝑟𝑘𝑒𝑑 = 𝑃49.4 𝑥 1.25 𝑥 2 = 𝑷𝟏𝟐𝟑. 𝟓
Richard is an employee in a manufacturing company. He is paid a basic wage of P395.2 and a cost-of-living • (𝑅𝐷𝑂𝑇 ) = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑅𝑎𝑡𝑒 𝑥 130% 𝑥 𝐻𝑜𝑢𝑟𝑠 𝑊𝑜𝑟𝑘𝑒𝑑 = 𝑃49.4 𝑥 1.30 𝑥 2 = 𝑷𝟏𝟐𝟖. 𝟒𝟒
allowance (COLA) of P98.8. Find Richard’s compensation if he will work for eight (8) hours in a:
a. Rest Day • (𝑆𝐻𝑂𝑇 ) = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑅𝑎𝑡𝑒 𝑥 169% 𝑥 𝐻𝑜𝑢𝑟𝑠 𝑊𝑜𝑟𝑘𝑒𝑑 = 𝑃49.4 𝑥 1.69 𝑥 2 = 𝑷𝟏𝟔𝟔. 𝟗𝟕
b. Special Holiday • (𝑅𝐻𝑂𝑇 ) = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑅𝑎𝑡𝑒 𝑥 260% 𝑥 𝐻𝑜𝑢𝑟𝑠 𝑊𝑜𝑟𝑘𝑒𝑑 = 𝑃49.4 𝑥 2.60 𝑥 2 = 𝑷𝟐𝟓𝟔. 𝟖𝟖
c. Regular Holiday
d. Special Holiday which falls on Rest Day • (𝑆𝐻𝑅𝐷𝑂𝑇 ) = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑅𝑎𝑡𝑒 𝑥 195 % 𝑥 𝐻𝑜𝑢𝑟𝑠 𝑊𝑜𝑟𝑘𝑒𝑑 = 𝑃49.4 𝑥 1.95 𝑥 2 = 𝑷𝟏𝟗𝟐. 𝟔𝟔
e. Regular Holiday which falls on Rest Day • (𝑅𝐻𝑅𝐷𝑂𝑇 ) = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑅𝑎𝑡𝑒 𝑥 338 % 𝑥 𝐻𝑜𝑢𝑟𝑠 𝑊𝑜𝑟𝑘𝑒𝑑 = 𝑃49.4 𝑥 3.38 𝑥 2 = 𝑷𝟑𝟑𝟑. 𝟗𝟒
Solution: Taxable and Non-Taxable Benefits
𝑅𝐷 = [(𝑃395.2 × 1.30) + 𝑃98.80] = 𝑷𝟔𝟏𝟐. 𝟓𝟔
Taxation is the imposition of a mandatory tax of the government of a country to its citizens. Tax revenue
𝑆𝐻 = [(𝑃395.2 × 1.30) + 𝑃98.80] = 𝑷𝟔𝟏𝟐. 𝟓𝟔 is the total amount collected from the citizens and is the primary source of public services financing.
𝑅𝐻 = (𝑃395.2 + 𝑃98.80) × 2 = 𝑷𝟗𝟖𝟖 Concerning compensation, the Bureau of Internal Revenue (BIR) issued Revenue Regulation No. 5-2011,
𝑆𝐻𝑅𝐷 = [(𝑃395.2 × 1.50) + 𝑃98.80] = 𝑷𝟔𝟗𝟏. 𝟔𝟎 which contains details of compensation items exempt from withholding or fringe benefits tax. These items
are also known as De Minimis Benefits.
𝑅𝐻𝑅𝐷 = [(𝑃395.2 + 𝑃98.80) ∙ 2] + [(𝑃395.2 × 2) ∙ 30%] = 𝑷𝟏, 𝟐𝟐𝟓. 𝟐

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In the Philippines, all rank-and-file employees in the private sector who have worked for at least one (1) Monthly Salary Credit
month during the calendar year are entitled to receive 13th – month pay. Rank-and-file employees are the
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
non-management, lower-level employees who perform the day-to-day tasks that keep the company
running. The formula to solve the 13th – month pay is: 2019 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000

𝑀𝑜𝑛𝑡ℎ𝑙𝑦 𝑆𝑎𝑙𝑎𝑟𝑦 × 𝐸𝑚𝑝𝑙𝑜𝑦𝑚𝑒𝑛𝑡 𝑙𝑒𝑛𝑔𝑡ℎ Solution:

13𝑡ℎ 𝑀𝑜𝑛𝑡ℎ 𝑃𝑎𝑦 =
12 Exclude the semester of contingency and count 12 months backward starting from the month
Example: immediately before the semester of contingency.
Edmond Romualdo receives a semi-monthly salary worth ₱10,000. What would be his 13th month's pay
Monthly Salary Credit
by the end of the year assuming that Edmond worked the entire year?
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Solution:
2020 12,000 12,000 12,000 12,000 13,500 13,500 12,000 13,500 13,000 13,500 13,500 13,500
𝑀𝑜𝑛𝑡ℎ𝑙𝑦 𝑆𝑎𝑙𝑎𝑟𝑦 × 𝐸𝑚𝑝𝑙𝑜𝑦𝑚𝑒𝑛𝑡 𝑙𝑒𝑛𝑔𝑡ℎ
13𝑡ℎ 𝑀𝑜𝑛𝑡ℎ 𝑃𝑎𝑦 =
12 2019 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000

20,000 × 12
= Semester of contingency
12
= 𝑷𝟐𝟎, 𝟎𝟎𝟎 The 12 months before the semester of contingency

As defined under Article 133 (a) of the Labor Code, a qualified pregnant woman employee shall be entitled Identify the six (6) highest monthly salary credits from the 12 months and get their sum:
to six (6) weeks of maternity leave. In 2019, President Rodrigo Duterte signed Republic Act No. 11210, or
the “105-Day Expanded Maternity Leave Law,” which extends paid maternity leave from 60 days to 105 January – 2020 12,000
days. In solving for the maternity leave, one may follow the steps below: February – 2020 12,000
1. Exclude the semester of contingency (delivery or miscarriage).
• A semester refers to two (2) consecutive quarters ending in the quarter of sickness. March – 2020 12,000
• A quarter refers to three (3) consecutive months ending March, June, September, or April – 2020 12,000
December.
2. Count 12 months backward, starting from the month immediately before the semester of May – 2020 13,500
contingency.
June – 2020 13,500
3. Identify the six (6) highest monthly salary credits within the 12 months.
• Monthly salary credit is the compensation base for contributions and benefits related to the Total Monthly Salary Credit 75,000
total earnings for the month.
4. Add the six (6) highest monthly salary credits to get the total monthly salary credit. Divide the total monthly salary credit by 180 days:
5. Divide the total monthly salary credit by 180 days to get the average daily salary credit. This is 𝑇𝑜𝑡𝑎𝑙 𝑀𝑜𝑛𝑡ℎ𝑙𝑦 𝑆𝑎𝑙𝑎𝑟𝑦 𝐶𝑟𝑒𝑑𝑖𝑡 𝑃75,000
equivalent to the daily maternity allowance. 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐷𝑎𝑖𝑙𝑦 𝑆𝑎𝑙𝑎𝑟𝑦 𝐶𝑟𝑒𝑑𝑖𝑡 = = = 𝑃416.67 𝑝𝑒𝑟 𝑑𝑎𝑦
180 𝑑𝑎𝑦𝑠 180 𝑑𝑎𝑦𝑠
6. Multiply the daily maternity allowance by:
• 105 days in any instance of live childbirth, either normal or cesarean; Get the amount of benefit:
• 120 days in any instance of live childbirth, either normal or cesarean, but solo parent; and • If Rhea has a partner and the child was born alive in either normal or cesarean delivery:
• 60 days in an instance of miscarriage or emergency termination pregnancy (ETP).
105 𝑑𝑎𝑦𝑠 × 𝑃416.67 = 𝑷𝟒𝟑, 𝟕𝟓𝟎. 𝟑𝟓
Example:
• If Rhea is a solo parent and the child was born alive in either normal or cesarean delivery:
Rhea is a pregnant woman employee. Her expected date of delivery is on November 30, 2020. Given below
is a summary of her monthly salary credits. 125 𝑑𝑎𝑦𝑠 × 𝑃416.67 = 𝑷𝟓𝟐, 𝟎𝟖𝟑. 𝟕𝟓

Monthly Salary Credit • If the child did not live because of miscarriage or Emergency Termination of Pregnancy (ETP):
60 𝑑𝑎𝑦𝑠 × 𝑃416.67 = 𝑷𝟐𝟓, 𝟎𝟎𝟎. 𝟐𝟎
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2020 12,000 12,000 12,000 12,000 13,500 13,500 12,000 13,500 13,000 13,500 13,500 13,500 Under the amended Article 302 of the Labor Code, any employee who will retire from work shall be
entitled to receive a retirement benefit.

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There are two (2) types of retirement:

• Compulsory – this happens when the employee reaches the age of 65.
• Optional – this happens when the employee meets the agreement in an existing contract with
his/her employer. For example, an agreement provides that at age 45, an employee has the option
to retire.
The formula to solve the retirement benefit is:
𝑅𝑒𝑡𝑖𝑟𝑒𝑚𝑒𝑛𝑡 𝐵𝑒𝑛𝑒𝑓𝑖𝑡 = 22.5 × 𝐷𝑎𝑖𝑙𝑦 𝑅𝑎𝑡𝑒 × 𝑦𝑟𝑠
Example:
Alfredo Tuangco served company A for 22 years with an average weekly salary of ₱2,336.75. He plans to
retire and avail his benefits. How much is the minimum retirement pay that he will receive if he works five
(5) days a week?
Solution:
First, determine the daily rate of Alfred:
𝑊𝑒𝑒𝑘𝑙𝑦 𝑆𝑎𝑙𝑎𝑟𝑦 𝑃2,336.75
𝐷𝑎𝑖𝑙𝑦 𝑅𝑎𝑡𝑒 = 𝐷𝑎𝑦𝑠 𝑜𝑓 𝑊𝑜𝑟𝑘
= 5 𝑑𝑎𝑦𝑠
= 𝑃467.35

Then, solve for the retirement benefit:

𝑅𝑒𝑡𝑖𝑟𝑒𝑚𝑒𝑛𝑡 𝐵𝑒𝑛𝑒𝑓𝑖𝑡 = 22.5 × 𝐷𝑎𝑖𝑙𝑦 𝑅𝑎𝑡𝑒 × 𝑦𝑟𝑠
𝑅𝑒𝑡𝑖𝑟𝑒𝑚𝑒𝑛𝑡 𝐵𝑒𝑛𝑒𝑓𝑖𝑡 = 22.5 × 𝑃467.35 × 22 𝑦𝑟𝑠
*The contribution table was effective in 2019 and may be subject to changes anytime based on the
𝑅𝑒𝑡𝑖𝑟𝑒𝑚𝑒𝑛𝑡 𝐵𝑒𝑛𝑒𝑓𝑖𝑡 = 𝑷𝟐𝟑𝟏, 𝟑𝟑𝟖. 𝟑𝟓 evolving policies of the government agency.
Table 1. SSS Contribution Table
Payroll Deductions (Sirug, 2018) Source: http://sssanswers.com/sss-contribution-table-2018/new-sss-contribution-table-2019-employed-members/

Types of Standard Payroll Deductions PhilHealth Contribution

• Social Security System (SSS) – A social security protection for workers in private institutions.
Example:
• Government Social Insurance Security (GSIS) – A social protection for government employees.
Suppose Mr. Mark Nero has a basic
• PhilHealth – A program focused on prioritizing the health of government and private employees.
monthly salary of P13,000. Determine his
• Pag-IBIG – An affordable savings for shelter/housing financing for government and private
monthly contribution to PhilHealth as of
employees. It is also known as Home Development Mutual Fund (HDMF).
2020.
In all of the above contributions, only the employee share (EE) will be deducted from the employees'
Solution:
payroll.
In solving for the PhilHealth contribution,
SSS Contribution one will use the formula below:
Example:
𝑃𝐻 𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛
Suppose Mr. Mark Nero has a basic monthly salary of P13,000. Determine his monthly contribution to = 𝑀𝑜𝑛𝑡ℎ𝑦 𝐺𝑟𝑜𝑠𝑠 𝐼𝑛𝑐𝑜𝑚𝑒 × 𝑃𝑅
SSS.
Where PR is the premium rate.
Solution: Thus, Mr. Nero’s monthly PhilHealth
One will use the SSS Contribution Table to solve the SSS contribution. In the table, the P13,000 monthly contribution is:
salary of Mr. Nero falls in the range of P12,750 – P13,249. 99. Looking at the EE (Employee Contribution),
𝑃𝐻 𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 = 𝑃13,000 × 3%
his share as an employee is P520. On the other hand, looking at the ER (Employer contribution), his
= 𝑷𝟑𝟗𝟎 *The contribution table was effective in 2019 and may be subject to
employer's share is P1,050. Thus, Mr. Nero’s total SSS Contribution is P1,570.00. changes anytime based on the evolving policies of the government
However, the amount to be deducted agency.
from the salary of Mr. Nero is only P195 Table 2. PhilHealth Contribution Table
Source: https://www.philhealth.gov.ph/news/2019/new_contri.
(𝑃390 ÷ 2), his share or the EE. php# gsc.tab=0

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 BMSH2202 BMSH2202

Pag-Ibig Contribution Below is the sample format solving for the withholding tax:
Example:
Taxable Income/Regular Compensation XXXX
Suppose Mr. Mark Nero has a basic monthly salary of P13,000. Determine his monthly contribution to
SSS. Less: Base Compensation Range (XXXX)
Solution:
Excess XXXX
In solving for the Pag-IBIG contribution, one will use the Pag-IBIG Contribution Table. In the case of Mr.
Nero, his monthly compensation falls under the P5,000.00 and above. Thus, his total contribution is
P200.00. However, the amount to be deducted from Mr. Nero’s salary is only his share or the EE of Tax on the threshold XXXX
P100.00.
Tax on Excess XXXX
Pag-IBIG Contribution Table
Monthly Compensation Employer Share (ER) Employee Share (EE) Total Withholding Tax XXXX
P1,500 and below 1% 2% 3%
P1,501.01 – P4,999.99 2% 2% 4% Example:
P5,000.00 and above 100.00 100.00 200.00 Marisol Sirug, married with two (2) qualified dependent children, receives P25,000, net of SSS, PhilHealth,
*The contribution table was effective in 2019 and may be subject to changes anytime based on the evolving policies of the
and Pag-IBIG for November 2020. Her husband is also employed and did not claim for being the head of
government agency.
the family. How much are the withholding tax and net pay of Marisol?
Table 3. Pag-IBIG Contribution Table
Source: https://www.pagibigfund.gov.ph Solution:
GSIS Contribution
Example: Taxable Income/Regular Compensation P25,000.00
Suppose Mr. Mark Nero works in the Bureau of Internal Revenue. He has a basic monthly salary of Less: Base of the Compensation Range P20,833.00
P13,000. Determine his monthly contribution to GSIS.
Excess P4,167.00
Solution:
In solving the GSIS contribution, the member and government agency shall pay 9% and 12%, respectively.
Thus, in the case of Mr. Nero, he has a total contribution of P2,730.00. However, the amount to be Tax on P20,833 0
deducted from his salary is only P1,170 (𝑃13,000 × 9%), his share or the EE.
Tax on Excess (P4,167 x 20%) P833.40
GSIS Contribution Table
Withholding Tax P833.40
Monthly Compensation Agency Employee Total
Actual Monthly Salary 12% 9% 3%
*The contribution table was effective in 2019 and may be subject to changes anytime based on the evolving policies of the Taxable Income P25,000.00
government agency.
Less: Withholding Tax P833.40
Table 4. GSIS Contribution Table
Source: https://www.gsis.gov.ph/active-members/contributions/ Net Pay P24,166.60
Withholding Taxes
After all the standard payroll deductions have Basic Pay XXXX
been subtracted from the gross earnings, one Add: Overtime
will now arrive at the regular compensation. Holiday Pay Reference:
From the regular compensation, a withholding Night Diff. XXXX
tax will be deducted to arrive at the net pay. Gross Pay XXXX Sirug, W. S. (2018). Business mathematics for senior high school – ABM specialized subject. Mindshapers
Less: Lates and Absences Co., Inc.
Withholding tax is the amount of tax to be
SSS Contribution (EE Share)
withheld by the employer from an employee's PhilHealth Contribution (EE Share)
salary. Under the Tax Reform for Acceleration Pag-IBIG Contribution (EE Share) (XXXX)
and Inclusion (TRAIN) Law, the employer will only Taxable Income XXXX
withhold if his/her earnings exceed the income Less: Withholding Tax (XXXX)
threshold of P250,000.00. Net Pay XXXX
Note that tax rates are subject to changes based Table 5. Sample net pay computation
on evolving laws and government policies.

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