Salaries and Wages

Salary is the compensation

usually quoted annually or
monthly for an employee.
Wage, on the other hand, is
compensation quoted in an
hourly or daily rate for an
employee.
Salary earners usually get
paid every 15 days (bi-
monthly) while wage earners
usually get paid either weekly
or sometimes even monthly, at
their employer's convenience.
Salary earners 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 while wage
earners are under the “no work, no pay
policy” which means they are only paid
the actual number of hours or days that
they worked.
a. A tutor who is paid PhP200
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
PhP40,000 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 PhP77.43
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 PhP481
for an 8-hour workday.
What is his hourly wage?
Income and Benefits
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 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, or transportation allowance.
2. Non-cash benefits: SSS/GSIS, Pag-ibig,
PhilHealth.
Gross and Net Income
The gross income of an
individual refers to the total
amount he/she earned before
deductions are made.
net income of an individual is the difference between his/her gross
income and deductions.

Examples:
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.
Examples:
A minimum wage earner in 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(22) = PhP10,582.

A minimum wage earner is exempted from paying income

tax. Suppose his deductions per month are PhP100 for
Pag-ibig, PhP200 for PhilHealth and PhP363.30 for SSS
then his net monthly income is 10,582 – (100 + 200 +
363.30)=PhP9,918.70.