Types of Employee Benefits

When you are employed, you are entitled to various benefits that can be
summed up into three categories: employee minimum wage and additional
pays due to varying factors like holidays or overtime, leave benefits which are
paid absence from work, and mandatory government contributions. Each one
will be elaborated below.

Wage and compensations Benefits

1. Employee minimum wage*

Region Region Minimum Wage Increase

NCR P537 (Effective November 22, 2018)
CAR P300 — P320
Region I P256 — P310
Region II P340
Region III P393 — P400 (P339 in Aurora)
Region IV-A GCA:

P325.50 — P400

EGA:

P317.50 — P344

RBA:

P317 — P327
Region IV-B Establishments with 10 workers or above:

P290

Establishments with less than 10 workers:

P247
Region V Upon effectivity:

P305 (for establishments with 10 or more employees)

P295 (for establishments with less than 10 employees)

Region VI P365
Region VII P366
Region VIII P305
Region IX P316
Region X WCI — P338.00

WCII — P331.00

WCIII — P323.00

WCIV — P304.00
Region XI Upon effectivity:

P370
Region XII P311
Region XIII P305

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Region Region Minimum Wage Increase
ARMM P280
2. Overtime pay

The employee who renders service beyond the schedule indicated in the
contract will be given additional compensation equivalent to his regular wage
including at least 25% premium.

Sample Computation
Monthly salary P20,000.00
Working days per month 26
Daily salary P769.23
Per hour rate P96.15
Overtime rate 125%
Per hour rate-overtime P120.19
Employee overtime (in hours) 3.50
Total Overtime pay P420.67
3. Premium Pay

A premium pay is an overtime pay for rest days and official holidays. Employee
shall be paid an additional compensation from the rate of the first eight hours
on a holiday or rest day plus at least 30%. There are three types:

a. Regular Holidays – these refer to fixed dates like Christmas Day,

Independence Day, or New Year’s Day. However, National Heroes Day
and Holy Week are considered regular holidays despite changing dates.
b. Special Holidays – also known as Special Non-Working Holidays, they
fall on flexible dates, depending on the circumstance. Examples are
ASEAN Summit or regional events like festivals or class suspensions. A
day becomes a special holiday if: proclaimed by the President, enacted
by the Congress, or 3) declared by LGUs in the specific regions.
c. Double Holidays – this is a rare occurrence wherein a regular holiday
and a special holiday fall on the same day. Example: President Rodrigo
Duterte declared August 21, 2018 as special non-working (Eid’l Adha)
and regular holiday (Ninoy Aquino Day) at the same time.

All employees are eligible for premium pay, but normally, the slots for working
on holidays or rest days are scheduled in advance and approved by authorized
personnel.

Now, how do you compute for premium pay? Computation differs for each
type. Please, refer below:

A. Working on Rest day Premium / Working on Special Holiday

PremiumBoth types of premium follow the same formula: (Hourly rate ×
130% × 8 hours)

Sample Computation
Hourly rate 81.49
Rest day/ Special Holiday pay 130%
Hours of duty 8
Total premium P847.496

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 B. Working on Special Holiday and at the same time Rest day Premium =
(Hourly rate × 150% × 8 hours)

Sample Computation
Hourly rate 81.49
Special Holiday and Rest Day Pay 150%
Hours of duty 8
Total premium P977.88

C. Working on Regular Holiday Premium = (Hourly rate × 200% × 8 hours)

Sample Computation
Hourly rate 81.49
Regular Holiday Pay 200%
Hours of duty 8
Total premium P1,303.84

D. Working on Regular Holiday and at the same time Rest day Premium =
(Hourly rate × 260% × 8 hours)

Sample Computation
Hourly rate 81.49
Regular Holiday and Rest day pay 260%
Hours of duty 8
Total premium P1,694.992

E. Working on a Double Holiday Premium, and Working on a Double

Holiday and at the same time Rest day PremiumBoth types of premium
follow the same formula: (Hourly rate × 300% × 8 hours)

Sample Computation
Hourly rate 81.49
Double Holiday / Double Holiday and Rest day Pay 300%
Hours of duty 8
Total premium P1,955.76
4. Night Shift Differential

Also known as night shift pay, it applies to employees who work between
10:00 PM and 6:00 AM.
An additional 10% premium is applied for every hour at work.

The following are eight types of NSD:

A. Night shift on an ordinary day = (per hour rate × 10% × 8 hours)

Sample Computation
Per hour rate 96.15
Additional Premium 10%
Working hours per day 8 hours
Total NSD P76.92

B. Night shift on a rest day = (per hour rate × 130% × 10% × 8 hours)

Sample Computation

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 Per hour rate 96.15
Rest day premium 130%
Additional Premium 10%
Working hours per day 8 hours
Total NSD 99.996

C. Night shift on a regular holiday = (per hour rate × 200% × 10% × 8

hours)

Sample Computation
Per hour rate 96.15
Rest day premium 200%
Additional Premium 10%
Working hours per day 8 hours
Total NSD 153.84

D. Night Shift on Special Holiday = (per hour rate × 130% × 10% × 8

hours)

Sample Computation
Per hour rate 96.15
Special holiday premium 130%
Additional Premium 10%
Working hours per day 8 hours
Total NSD 99.996

E. Night Shift on a double holiday = (per hour rate × 330% × 10% × 8

hours)

Sample Computation
Per hour rate 96.15
Double holiday premium 330%
Additional Premium 10%
Working hours per day 8 hours
Total NSD 253.836

F. Night Shift on a regular holiday plus rest day = (per hour rate × 260% ×
10% × 8 hours)

Sample Computation
Per hour rate 96.15
Regular holiday premium + Rest day premium 260%
Additional Premium 10%
Working hours per day 8 hours
Total NSD 199.992

G. Night Shift on special holiday plus rest day = (per hour rate × 150% ×
10% × 8 hours)

Sample Computation
Per hour rate 96.15
Special holiday premium + Rest day premium 8 hours
Additional Premium 150%
Working hours per day 10%
Total NSD 115.38

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 H. Night Shift on double holiday plus rest day = (per hour rate × 390% ×
10% × 8 hours)

Sample Computation
Per hour rate 96.15
Double holiday premium + Rest day premium 390%
Additional Premium 10%
Working hours per day 8 hours
Total NSD 299.988
5. 13th Month Pay

The 13 month pay is often mistaken as the Christmas Bonus, but technically,
it’s a monetary bonus mandated by law. The Christmas bonus is only a
voluntary gesture from the employers. According to the law, the 13 month pay
is given either in 2 installments (May and December) or in full before
December 24.

You can receive this pay if you are any private employee with fixed or
guaranteed salary who have worked for at least one month. Resigned or
terminated employees who left their employers before the release of the 13
month bonuses can also receive this. Take note that employees who quit the
job without going through the separation process and workers who are paid
purely on commission are not entitled for 13 month pay.

How do you compute the amount you’ll receive? It depends on your basic pay
times the number of months you rendered for the whole year and divided by
12. Example: In case of perfect attendance, the employee will get the full
monthly salary for 13th month pay. Generally, it’s a bonus amounting to one
month of basic pay.

Sample Computation
Gross Monthly Salary P30,000.00
Perfect attendance (12 months) P30,000 x 12 months / 12 months
Total take home 13th month pay P30,000
If ever you wondered why you receive different rates of 13 month bonus,
that’s because it is pro-rated. It means that the amount of pay will be adjusted
to the total time you rendered the services. As a result, what you will receive
may not be the same with your monthly basic pay and may differ from other
employees because of variables.

Absences or unpaid leaves will be deducted from the basic salary before being
divided by 12. Also, other benefits on top of your basic pay like unused credit
service incentive leaves, overtime, premium, night differential, and allowances
are not part of the computations. Deduction from the bonus is possible to
cover the upcoming tax deficits.

The 13 month pay is basically not taxable, except for the amount of P82,000.
Under the new TRAIN law, tax exemptions now cover the rate of P90,000.

6. Separation pay

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Separation pay is also part of the Labor Code and is given to employees
terminated from the company. The only exception are those terminated
because of misconduct or crime involvement.

There are two types:

a. 1/2 Month Pay per Year of Service – an employee is eligible for

separation pay with the value of one-half (1/2) month pay for every year
of service if the separation from the service is because of retrenchment
to save the company from pitfalls, closure or termination of the
operations due to bankruptcy and other bad instances, and grave illness
incurable within 6 months or harmful for co-workers.
b. One-Month Pay per Year of Service – an employee is eligible for a
separation pay worth of one month per year of service if the termination
of the contract is because of: installation of devices or machines that
reduce the number of labors, redundancy, or when there is excessive
manpower, impossible reinstatement to the former position because of
significant reasons.

7. Retirement pay

Upon the age of 60 years or more, an employee who has served at the
establishment for at least five years may be granted a retirement pay
equivalent to at least one-half month of salary for every year of service. A
fraction of at least six months is considered as one whole year.

As stipulated by the DOLE National Wages and Productivity Commission, “The

minimum retirement pay shall be equivalent to one-half (1/2) month salary for
every year of service, a fraction of at least six (6) months being considered as
one (1) whole year.”

Included in the one-half pay are 15 days salary based on the latest salary rate,
cash equivalent of 5 days of service incentive leave, one-twelfth (1/12) of the
13th month pay.

How to compute the pension:

(1/12 x 365/12 = .083 x 30.41 = 2.5)

Minimum Retirement Pay = Daily Rate x 22.5 days x number of years in service

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Leave benefits
1. Service Incentive Leave

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Article 95 of the Labor Code says that an employee who has worked for a year
is entitled to five (5) SILs with full pay. These can be used for vacation leave or
sick leave.

2. Parental leaves

There are 3 types of parental leaves:

a. Maternal – any pregnant woman employee who has worked with the
company for at least six months will be granted a maternity leave of at
least two weeks prior to her due date (expected date of delivery) and
four weeks after normal delivery or miscarriage with full pay based on
her regular salary.As of February 21, 2019, the Expanded Maternity
Leave (EML) Bill has been signed into law. This law grants 105 days of
paid maternity leave credits. The law also allows new mothers to extend
this leave for an additional 30 days, but this will be unpaid.

The EML is applicable to all a woman’s pregnancies.

b. Paternal – the R.A No. 8187, or Paternity Leave Act of 1996, grants seven
(7) days of fully paid leave to married fathers. This is effective up to the
first four deliveries of the legitimate spouse.Under the EML, seven days
of a woman’s paid maternity leave credits can be transferred to fathers,
extending the allowed seven-day paternity to be extended to 14.
c. Solo Parent – Solo or single mothers and fathers have seven days leave
with pay for every year of service, on top of other leave privileges, e.g.
Maternity or Paternity Leave.Solo mothers are covered by the EML, so
they also get 105 days of paid maternity leave credits. However, solo
mothers can extend their leave for 15 days and these should be paid
leaves.

3. Special Leave Benefits for Women

There are two types:

a. Magna Carta for Women – this entitles women who underwent surgery
due to gynecological disorders to two months’ leave with full pay, as
stipulated in R.A. 9710 or the Magna Carta of Women. This applies to
employees who have rendered at least six months of service with the
company.
b. Leave for women and their children who are victims of violence – victims
of violence against women, as stipulated in R.A. 9262 or the Anti-
Violence Against Women and Their Children Act of 2004, are entitled to
10 days leave with full pay.

4. Bereavement Leave

This is a 3 days additional time off from work to mourn for the death of
immediate family members such as mother, father, siblings, and children. It
must be noted that this is not a paid leave.

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5. De Minimis Benefits

These are either relatively small amounts of money or leave credits that are
optional for employers to grant. Examples are calamity leave, rice subsidy,
transportation/clothing/laundry allowance, daily meal allowance, other goods
that are not monetary.

Mandatory government contributions

The following government contribution will be automatically deducted from
regular employees based on their salary:

1. SSS

The Social Security System serves as an insurance program set by the

government for all wage earners from the private institutions (the counterpart
for government employees is GSIS) in the country.

Members are required to contribute a certain amount depending on their

salary bracket.

Generally, your monthly contribution is a shared payment between you (EE)

and your employer (ER):

ER – 7.37% of the total contribution

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EE – 3.36% of the total contribution (deducted from the salary).

Example: refer to the table.

If you earn P14,437 per month, your salary credit according to the table is
deemed as P14,500.

Your employer will pay P1,160 (7.37%) – on top of that is the additional fee of
P10 – amounting to P1,170.

Adding the remaining P580 (3.63%) from you, the table shows that your total
contribution per month is P1740.

To check your contributions online, you need to create an account at My.SSS

and have it validated by SSS personnel. You can also view your membership
records, file salary loan application, or schedule appointments.

The benefits given by SSS are for sickness, maternity, disability, retirement
benefit (pension), death cash grant, funeral grant, and salary loan.

2. PhilHealth

This serves as a health insurance program for private employees providing

financial aid and service privileges for health care.

PhilHealth has removed the previous salary brackets, creating a new

condensed contribution table with P10,000 as the salary floor and P40,000 as
the ceiling. The computation starts at 2.75% of the basic salary per month, and
the payment is shared by employer and employee.

The PhilHealth benefits include:

a. Inpatient benefits (hospitalization, facility fees, and physician/surgeon

fees)
b. Outpatient benefits (day surgeries, radiotherapy, hemodialysis,
outpatient blood transfusion, primary care benefits)
c. Z benefits (financial/medical aid for the patients with cancer and in need
of surgeries)
d. SDG related (Malaria package, HIV-AIDS package, anti-Tuberculosis
treatment, voluntary surgical contraception procedures, and animal bites
treatment)

3. Pag-IBIG

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Also known as the Home Development Mutual Fund (HDMF), Pag-IBIG is
another form of national savings program and the financing office for
affordable shelter.

Salary per month Employee share Employer share

P1,500 and below 1% 2%
Over P1,500 2% 2%
Again, the total contribution is shared between you and the employer. The
highest compensation per month subjected to Pag-IBIG contribution is P5,000
and it means that the employer and employee will pay P100 each as the
maximum contribution.

Pag-IBIG lets you have the following benefits: housing loan, multi-purpose
loan, calamity loan, secured savings.

For Kasambahay (Househelpers) Wage Orders:

*Househelpers are not included in the above list as a more specific law is in
place under the Republic Act (R.A.) No. 10361, or Domestic Workers Act. A
minimum monthly salary of P2,500 applies to house helpers in NCR, P2,000 in
chartered cities and first-class municipalities, and P1,500 in other municipalities.

Kasambahays are also entitled to other leave benefits such as 13 month pay, 5
annual SIL, and rest days. However, government-mandated insurance programs
like SSS, PhilHealth, and Pag IBIG have specific computations of contributions
provided by the law.

Region Minimum Wage Rate

NCR NCR P3,500
CAR P3000 for chartered cities and municipalities; and

P2500 for other municipalities

Region I P3500 for chartered cities and municipalities; and

P2500 for EGA, RBA, and other municipalities

Region II P2500
Region III P4000 for cities and first class municipalities

P3000 for other municipalities

Region IV-A P2500 for GCA (chartered cities and municipalities)

P1800 for EGA and RBA (other municipalities)

Region IV-B P2500 for cities and first class municipalities

P2500 for other municipalities

Region V P3000 for cities and first class municipalities

P2500 for other municipalities

Region VI P4000
Region VII P3000 for cities and first class municipalities

P2500 for other municipalities

Region VIII P2500 for chartered cities and municipalities

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Region Minimum Wage Rate

P2000 for other municipalities

Region IX P2500 for chartered cities and municipalities

P2000 for other municipalities

Region X P3000 for cities and first class municipalities
Region XI P3000 for cities and first class municipalities

P2000 for other municipalities

Region XII P2500 for chartered cities and municipalities

P2000 for other municipalities

Region XIII P3000 for cities and first class municipalities

P2500 for other municipalities

Do you have complaints about not receiving the pay you are supposed to
receive? Contact Department of Labor and Employment for proper
proceedings. This government office has launched a 24/7 customer service
line for inquiries and assistance.

o DOLE Hotline: 1349

o You can also directly submit a message to their website through this
link.

Whether you are looking for a job or already employed, you must be aware of
your rights from the company aside from the responsibilities you signed for.
After all, a person works to get an income and these employee benefits.

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