SALARY and

WAGES (Gross
and Net Income)
BUSINESS MATHEMATICS QUARTER 2 WEEK 4
GROSS INCOME Hi!

The gross income of an

individual refers to the total
amount he/she earned before
deductions are made.
 Examples
A teacher who gets a basic monthly
salary of PhP20,000 and a living
allowance of PhP2,000 per month has an
annual gross income of (20,000 x 12) +
(2,000 x 12)=PhP264,000.
01
A policeman who gets a basic salary
of PhP25,000 per month, a living
allowance of PhP2,500 per month
and a hazard pay of PhP12,000 per
02
year has an annual gross income of
(25,000 x 12) + (2,500 x 12) +
12,000= PhP342,000.
A university professor who has a
basic monthly salary of
PhP80,000, a living allowance of
PHP2,000 per month, who also has
an investment of PhP500,000
03 which earns an interest of 6% per
year has an annual gross income of
(80,000 x 12) + (2,000 x 12) +
(500,000 x 0.06)= PhP1,014,000.
A minimum wage earner in
04 Metro Manila is paid
PhP481 for an 8-hour
workday. If he works for 22
days in one month, then he
will have a monthly gross
income of 481 x 22 =
PhP10,582.
Net Income
The net income of an
individual is the difference
between his/her gross
income and deductions.
 DEDUCTION

Deductions are fixed

amount or a percentage
of the basic salary held
by any authority as a
form of necessary dues.
Some of the deductions may include,
among other, the following:

● SSS Contribution
● GSIS Contribution
● PhilHealth Contribution
● Salary Advances
Using Mr. Ocampo’s pay slip, we can solve for the
missing value on his pay slip’s Total Deductions by
simply adding all his required deductions. That is:
BENEFITS of a WAGE EARNER
MINIMUM WAGE PREMIUM PAY
A A minimum wage rate was set per
region, province and industry sector.
C A premium pay is an additional compensation
if an employee worked within 8 hours during
non-working days such as rest days and
This may vary depending on the number special holidays. If an employee did not
of employees and gross sales of an rendered work or not required to work on this
enterprise and its industry sector. day, then he is not entitled to any
compensation.
OVERTIME PAY HOLIDAY PAY
B An overtime pay is an additional
compensation given to an employee
D Based on the Labor Code, all
employees shall be paid with their daily
who renders service beyond the
maximum number of working hours per
basic wage for regular holidays,
day (8 hours per day). whether they work on that day or not.
BENEFITS of a WAGE EARNER
NIGHT SHIFT
DIFFERENTIAL
E An employee who works between 10:00
PM and 6:00 AM receives an additional
10% premium called night shift
differential (NSD), also known as night
shift pay.
F 13th MONTH PAY
It is a monetary bonus which is
mandated by the law that is given either
in two installments (May and December)
or in full (before December 24).
Generally, 13th month pay is 1/12 of the
employee’s annual income or equivalent
to one-month basic pay.
 I A. MATERNITY LEAVE
According to the Expanded Maternity
PARENTAL LEAVES Leave (EML) Bill, the law grants each
pregnant employee 105 days of
maternity leave credits. It also allows
BENEFITS of a new mothers to extend this leave for
an additional 30 days, but this will be
WAGE EARNER an unpaid leave.
 I B. PATERNITY LEAVE
The R.A No. 8187, or Paternity Leave Act of
PARENTAL LEAVES 1996, grants seven (7) days of fully paid
leave to married fathers that is effective up
BENEFITS of to the first four deliveries of the legitimate
spouse. Under the EML, seven days of a
a WAGE woman’s paid maternity leave credits can
be transferred to fathers, extending the
EARNER allowed seven-day paternity to be extended
to 14 days.
 I
C. SOLO-PARENT LEAVE
PARENTAL LEAVES Seven (7) days leave with pay are given to solo
or single mothers and fathers for every year of
BENEFITS of service, aside from their other leave privileges
(maternity or paternity). Solo mothers can
a WAGE extend their leave for 15 days, and these are
paid leaves.
EARNER
BENEFITS of a WAGE EARNER
SPECIAL LEAVE BENEFITS FOR WOMEN
G MAGNA CARTA FOR WOMEN
An employee who underwent surgery due to gynecological disorders and have
rendered at least six months of service in the company is entitled to two months leave
with full pay, as per R.A 9710 or the Magna Carta for Women.

LEAVE FOR WOMEN AND THEIR CHILDREN WHO ARE

VICTIMS OF VIOLENCE
As per R.A 9262 or the Anti-Violence against Women and their Children Act 0f 2004,
victims of violence against women are entitled to 10 days leave with full pay.
BENEFITS of a WAGE EARNER
SEPARATION PAY
H A regular employee who is validly dismissed or terminated from a company is entitled to a
separation pay, except those who are terminated due to misconduct or crime
involvement.

RETIREMENT PAY
I Upon reaching the retirement age, an employee is entitled to a retirement pay equivalent to at least
half-month salary for every year of service. A fraction of 6 months is considered as one whole year. An
employee may retire upon reaching the age of 60 or more (voluntary retirement age), but not more
than 65 (compulsory retirement age), provided the he served for at least 5 years in the same company.
Employers may give benefits to their employees other than their regular salaries and wages called de
minimis benefits that are relatively small in value and are not taxable.
Below is the updated list of de minimis benefits based on the BIR Revenue Regulations No. 11-2018 (RR
11-2018).