BUSINESS MATHEMATICS

2nd Semester FOURTH QUARTER

Module/Lesson 2_week10
The Fundamental Operations
of Mathematics as Applied in
Salaries & Wages
Mrs. Charmlyn B. Whiteside

Sales Week 10
MELCs:
At the end of the lessons ;

1. Define Salary, Wage,

Income Benefits
2. Compute gross and net
1st Qtr 2nd Qtr earnings
3rd Qtr 4th Qtr
YOU ARE NOW
WORKING,
WHAT WILL
YOU GET IN
RETURN?
 SALARY
• is the compensation usually quoted annually
or monthly for an employee.
• They are not paid less if they work for only
a fraction of the required number of hours
and they are also not paid for working
overtime.
Source: Licuanan, Patricia B., et.al, 2016 Teaching Guide for Senior High School Business Mathematics.p.124. Quezon City,
Philippines. CHED.
• Salaries are often expressed as a yearly amount, but the salary
is paid out
• monthly, bimonthly (or semi-monthly), biweekly, or weekly.
• Monthly: Once a month, 12 times a year
• Bimonthly (or semi-monthly): Twice a month, 24 times a year
• Biweekly: Every other week, 26 times a year
• Weekly: Once a week, 52 times a year
 WAGE
• is compensation quoted in an hourly or daily
rate for an employee and usually get paid
either weekly or sometimes even monthly, at
their employer's convenience.
• They are under the “no work, no pay policy”
which means they are only paid the actual
number of hours or days that they worked.
 INCOME
• INCOME is money that an individual receives in exchange for
providing a good/service or through investing capital.
Some sources of income:
1. Farmers, fishermen and vendors earn income by providing
goods such as crops, fish and vegetables, respectively.
2. Individuals may earn income by investing their capital in
stocks, mutual funds or bank deposits.
 BENEFIT
• BENEFIT is employee compensation given by an
employer on top of the basic salary/wage. Note that
benefits may come in the form of cash or in kind.

Examples:
1. Cash Benefits: 13th month pay, bonuses, rice subsidy,
transportation allowance
2. Non-cash benefits: SSS/GSIS, Pag-ibig, PhilHealth
GROSS INCOME SOLUTION:
a. Divide the salary by 52 because there are
• The GROSS INCOME of an individual
52 weeks in a year. That is 230,489.20 (annual
refers to the total amount he/she income) ÷ 52 (weeks in a year)≈ P4,432.48
earned before deductions are made. Hence, the employee’s weekly salary is
Other adjustments may be payment for P4,432.48.
loans, etc.
b. There are 24 semi-monthly periods in a
EXAMPLE: year, so divide the salary by 24. We have
P230,489.20 (annual income) ÷ 24 (twice a
An employee has an annual salary of
month in 1 year) ≈ P9,603.72
P230,489.20. How much is she paid: Thus, the employee’s semi-monthly salary is
a. Weekly? P9,603.72.
b. Semi-monthly? c. Monthly salary=P230,489.20 ÷ 12≈ P19,207.43
c. Monthly? Therefore, the employee’s monthly salary is
P19, 207.43.
An hourly wage or hourly rate is the amount an employee is paid for each hour
worked. The total amount of money that an employee is paid is called gross pay or
gross wages. Gross pay may also be called total earnings or total pay.
The regular gross pay earned by employees who are paid by the hour is found by:
REGULAR GROSS PAY= Hourly Rate X Regular Hours Worked.
Example:
An employee works as a customer service representative and is paid P91 per hour. He
worked 38 hours last week. Find his gross pay last week.
Solution:
Multiply the hours worked by the hourly rate.
P91.00 X 38 hours= P3,458.00
The employee’s gross pay last week was P3,458.00.
The NET INCOME of an individual is the difference between his/her gross income and deductions. Example of
deductions applicable are income tax, SSS or GSIS contributions, PhilHealth and Pag-ibig contributions. The deductions
can be a fixed amount or a percentage of the basic salary. Break down of net income is usually seen in the
employee’s pay slip.
Example:
A private school teacher who gets a basic monthly salary of PhP21,000. Suppose this teacher has to pay every
month P3.34 for income Tax, P735 for PhilHealth, P420 for Pag-ibig and P945 for SSS contributions,
Solution:
Gross Income P21,000.00
Less:
Income Tax P 33.40
Philheath P 735.00
Pag-ibig P 420.00
SSS P 945.00 (P 2,133.34)
Net Income P18,866.66
REMEMBER
• SALARY is the compensation usually quoted annually or monthly for an employee.
• WAGE is compensation quoted in an hourly or daily rate for an employee and usually
get paid either weekly or sometimes even monthly, at their employer's convenience.
• INCOME is money that an individual receives in exchange for providing a good/service
or through investing capital.
• BENEFIT is employee compensation given by an employer on top of the basic
salary/wage.
• The GROSS INCOME of an individual refers to the total amount he/she earned before
deductions are made.
• The NET INCOME of an individual is the difference between his/her gross income and
deductions.