SALARIES AND WAGES

The learner’s should be able to:

1. define salary
2. define wage
3. difference between salary and wage
4. distinguish between salary earners and wage earners
5. define income
6. define benefits
7. enumerate the benefits of a salary and wage earner
8. define each of the benefits given to a salary and wage
earner
a. A tutor who is paid P 200 per hour is earning a
wage. How much does he earn for a 10-hour week
work?
b. A university assistant professor is usually given a
monthly salary. If his salary is P 40,000 per month,
how much does he get every two weeks?
c. A fast food service crew is paid per hour. If he is
paid an average wage of P 77.43 per hour, how much
will he get if he works for 6 hours and 6 days a week
for 4 weeks?
d. A minimum wage earner in Metro Manila is paid
P 481 for an 8-hour workday, What is hourly wage?
e. A clerk earns a salary of P 20 000 per month.
Assuming that he works 8 hours a day for a 20-day
work month, how much does he get per day? Per
hour?
f. An employee is paid a monthly salary of p 16 000
for working 20 days in a month. A taxi driver earns
P 750 per day. Assuming both work 8 hours a day,
who has a higher hourly wage?
f. An employee is paid a monthly salary of p 16 000
for working 20 days in a month. A taxi driver earns
P 750 per day. Assuming both work 8 hours a day,
who has a higher hourly wage?

Answer: 16,000/20 days = P800

The employee gets the higher hourly wage than
the driver.
 is the remuneration in cash and
in kind paid to employees at regular intervals
for time of work or work done.
 is the monetary remuneration
computed on hourly, daily, weekly, or piece
of work basis.
1. Salary is the fixed amount of
compensation which is paid for the
performance of an employee. Wage is the
variable amount of compensation which is
paid on the basis of hours spent in finishing a
certain amount of work.
2. Salary is given to the skilled persons who
apply their proficiencies in respective fields
and generate the revenues for the firm.
Whereas wages are paid to the semi-skilled
or unskilled worker such as carpenter,
welder, electrician, etc. who work on hourly
basis.
3.In the case of salary, the cost incurred is
fixed i.e. fixed amount is paid monthly.
Whereas in wages, the cost is variable,
because it can vary with the day to day
performance of an individual.

4. Salary once decided, in the beginning,

remains fixed throughout. Whereas in
wage system, there is a wage rate that
keeps on changing and an individual is
paid on the basis of prevailing wage rate.
5. Salary is generally paid at fixed intervals i.e. monthly.
Whereas wages are paid on a daily basis for the number
of hours spent.

6. Salary is paid on the basis of the performance of an

individual. Whereas wages are paid on hourly basis i.e.
the amount of work done in hours.

7. Salary is paid to employees who possess the skills

and efficiencies in completing the office work. Whereas
wages are paid to the labors, who are engaged in
manufacturing processes and do the work on an hourly
basis.
Income
Income is money that an individual receives in
exchange for providing a good / service or through
investing capital.

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.

Examples:
1. Cash Benefits: 13th month pay, bonuses, rice
subsidy, transportation allowance
2. Non-cash benefits: SSS/GSIS, Pag-ibig, Philhealth
Benefits of a Salary/Wage Earner
1. Social Insurance
2. 13th month pay
3. Sick Leave
4. Vacation Leave
5. Maternity Leave
6. De Minimis Benefits
7. Fringe Benefits
Specifically, in the Philippines we have the
following:

8. Paternity Leave
9. Service Incentive Leave
10. Solo Parent’s Leave
11. Leaves under RA 9710
( Women who undergo surgery)
12. Tax Exemptions ( For Minimum Wage Earners )
13. Tax Exemptions for Non-Minimum Wage
Earners
Definition of the Benefit of a Salary/Wage
Earner
1. Social Insurance – private company and government
employees are required by law to contribute to the
social insurance funds.
2. 13th month pay – this is 1/12 of the basic salary that
an employee received for a year. This is mandatory and
should be given to the employee on or before 24th of
December.
3. Sick Leave – an employee is given leave with pay
due to sickness. This is usually 15 days for each year of
service.
Definition of the Benefit of a Salary/Wage
Earner
4. Vacation Leave- an employee is also given leave
with pay to go on vacation. This is also around 10 days
for each year of service.

5. Maternity Leave – benefit given to pregnant female

employees when they gave birth.

6. De Minimis Benefits –benefits of relatively small

values provided by the employers to the employees on
top of the basic compensation intended to the general
welfare of the employees.
Definition of the Benefit of a Salary/Wage
Earner
7. Fringe Benefits – compensation in addition to direct
wages or salaries such as company car, house
allowance, medical insurance, paid holidays, pension
scheme, subsidized meals. ( These are part of taxable
income)

8. Paternity Leave – benefit given to male employees

when their legal spouse gives birth. It is a 7-day paid
leave starting on the day the spouse gave birth.
Definition of the Benefit of a Salary/Wage
Earner
9. Service Incentive Leave – every employees who has
rendered at least one year of service entitled to a yearly
service incentive leave of five days with pay.

10. Solo Parent’s Leave – the parental leave is an

additional benefit which shall be for seven working
days every year, with full, consisting of basic salary
and mandatory allowances.
Target Skills:

1.Computing annual salary on the basis of weekly,

biweekly, semimonthly, and monthly pay periods

2.Calculating gross pay by hourly wages, including

regular and overtime rates

3. Solving problems including salaries and wages

Target Skills:

1.Computing annual salary on the basis of weekly,

biweekly, semimonthly, and monthly pay periods

2.Calculating gross pay by hourly wages, including

regular and overtime rates

3. Solving problems including salaries and wages

 Period Computation of
Salaries
Monthly Salary

Semi-Monthly Salary

Bi-weekly Salary

Weekly Salary
Example #1

1. For an employee who earns an annual salary

of P 260,000, what is the
a. weekly salary?
b. bi-weekly salary?
c. semi-monthly salary?
d. monthly salary?
Example #2

2. Susan has an annual salary of P 230,489.20.

How much is she paid:
a. weekly?
b. bi-weekly?
c. semi-monthly?
d. monthly?
a. P 4 432.48
b. P 8 864.97
c. P 9 603.72
d. P 19 207.43
Example #3

2. Paolo earns a salary of P 3 500 per week.

What is his yearly salary?

P 182 000
Example #4

4. Francis has a casual work at a fast food store.

He is paid P 52.25 per hour from Monday to
Saturday and P 74.50 per hour on Sunday.
Calculate his wage for a week in which he
worked from 5:00 PM to 10:00 PM on Friday
and from 6:00 PM to 9:00 PM on Sunday.

P 484.75
Ordinary Day 125% of regular
Overtime Pay Rates
rate
Rest day 130% of regular
rate
Special Holiday 130% of regular
rate
Regular Holiday 200% of regular
rate
Rest day w/c falls on a 150% of regular
Special Holiday rate

Rest day w/c falls on a 260% of regular

Regular Holidays in the Philippines

1. New Year’s Day

2. Maundy Thursday
3. Good Friday
4. Araw ng Kagitingan
5. Labor Day
6. Independence Day
7. National Heroes Day
8. Bonifacio Day
9. Christmas Day
10. Rizal Day
Special Holidays in the Philippines

1. EDSA People Power Revolution

2. Ninoy Aquino Day
3. All Saints Day
4. Chinese New Year
5. Black Saturday
6. Eid’l Fitr
7. Idul Adha
8. Last day of the Year
Example #5:

Myrna earns the regular daily rate of P 340.00

giving her an hourly rate of P42.50. If she works
10 hours on a regular day, her pay would be:

Total pay for the day = Regular Pay + Overtime

Pay
= 42.50 ( 8 )+( 42.5 )(1.25)( 2 )
= P 446.25
Example #6:

Given a daily rate of P 494 and a basic hourly

rate of P 61.75, find the Overtime Rate of
Overtime Pay on an ordinary rate.
Solution:

Overtime Pay = Daily Rate x Overtime Rate

= 494 x 1.25
= P 617.5

Overtime Pay = Hourly Rate x Overtime Rate

= 61.75 x 1.25
= P 77.18
Example #7:

Assuming that the minimum daily wage rate is P

P 340, how much is the overtime rate per hour?
Example #8:

J-Rish earns the regular daily rate of P 460.00

giving her an hourly rate of P 57.50, if she
works 11 hours on a regular day, her pay would
be:
Example #9:

Ursula works as a waitress and earn P 35 / hr.

Her rest day is Tuesday. She is paid overtime in
excess of 40 hours a week. Last week, she
worked for 48 hours, excluding the 6.5 hours
she rendered on Tuesday. Find her gross
earnings last week.
Example #10:

Robert earns a regular daily rate of P 340, giving

him an hourly rate of P 42.50. He was requested
by his boss to work on May 1, Labor Day,
which is a legal holiday. However, Labor day
fell on a Saturday, which was Robert’s rest day.
A. What was Robert total pay on Labor day?
SW
1. Mark Santos works as a customer service
representative and is paid P 91 / hr. He
work 38 hours last week. Find his gross pay
last week.

2. Helen works as a cashier in a

supermarket and earns P 51.30 per hour.
She was requested by the manager to work
4 hours on Rizal Day, which is a regular
holiday. Find her gross pay on Rizal Day.
3. Edmond earns the regular daily rate of
P 476, giving him an hourly rate of P 59.50.
He was requested by his supervisor to work
6 hours on his rest day, which falls on a
Chinese New Year, which is a special ( non-
working) day. Compute Edmond’s gross
earning’s on that day.
4. This week, Anton Ramos worked 40
regular hours and 18 overtime hours. His
regular rate of pay is P 61.50. Find his total
gross pay.

5. Harold Abad worked 10 hours on

Monday, 9 on Tuesday, 11 on Wednesday,
12 on Thursday, and 9.5 hours on Friday.
His regular rate of pay is P 101. Find his
gross earnings for the week.
6. Julius Lopez is paid P 8,720 a week as an
executive assistant. Find his gross earnings
for a week in which he works 45 hours.

7. An employee worked for the following hours

during the week:
Monday Tuesday Wednesday Thursday Friday Saturday
8 9 8.5 10 7.5 8

Forty hours a week is considered his regular

hours and in excess of 40 hours is considered
overtime. Saturday is the rest day of that
employee. Calculate his gross pay at an
hourly rate of P 54.
Answer
1. P 3 458
2. P 410.40
3. P 535.50
4. P 3 843.75
5. P 5 491.88
6. P 10 082.50
7. P 2 924.1