Recording Salary Expenses
All business entities normally hire employees to perform its various operations.Salaries of these employees must be properly computed and paid at a specifiedtime (e.g. weekly, bi-monthly, monthly).In this section, readers will be introduced on how to journalize transactionsaffecting payment of employees’ salaries with corresponding deductions asrequired by law or due to some other reasons such as loans made byemployees from the company.
Under PD No. 24, “no person shall be employed unless he has a social securitynumber.” It is therefore a requirement that all employees in the private sector be members of the Social Security System (SSS). The system provides benefits and services to its members which include the following: salary loans,educational loans, housing loans, sickness and death benefits, unemployment benefits, disability benefits, pension benefits and reimbursement of funeralexpenses for deceased members. In consideration for all these benefits, theemployee is required to make a monthly contribution in accordance with acontribution table provided by the SSS. This contribution of the employee isdeducted from his salary. The corresponding contribution of the employer is an
SSS Contribution Expense
The Philippine Medical Care Commission (PMCC) was established to providehospitalization and other medical benefits to its members and their dependents.Contributions are made according to a given table. Similar to SSS, thecontribution is shared between the employee and his employer. Thecontribution of the employee is deducted from his salary. The contribution of the employer is an
Philhealth Contribution Expense
The Pag-ibig Fund is a provident savings and housing fund for employeesestablished under P.D. No. 1752. It aims to generate mass savings gearedtowards financing homes for its members. All private employees who aremembers of the SSS and their employers are covered by the fund compulsorily.The employer and its employees in accordance with the pag-ibig contributiontable make contributions to the Pag-ibig Fund.
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Marivic D. Valenzuela-Manalo
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