Subject: Business Mathematics 2.

13th month pay

Topic: Wages and Salaries 3. Sick leave
4. Vacation Leave
I. Ways of service payments 5. Maternity Leave
A. Salary and Wage 6. De Minimis Benefits
1. Salary is the compensation usually 7. Fringe Benefits
quoted annually or monthly for an In the Philippines we have the following
employees. It is a fixed amount paid 8. Paternity Leave
to an employee. 9. Service Incentive Leave
 Salary earners usually get paid 10. Solo Parent’s Leave
every 15th and 30th of the month. 11. VAWC Leaves
2. Wage is compensation quoted in an 12. Leaves under RA 9710(Women who
hourly or daily rate of an employee undergo surgery)
 Wage earners usually get paid 13. Tax Exemptions( For minimum wage
either weekly or sometimes earner)
even monthly depending, at 14. Tax Exemptions (For non minimum wage
their employer’s convenience earners)
 EXAMPLES III Finding the monthly gross earnings of a wage earner.
 Salary 1. Use the regional Minimum wage rate table to
 A UNIVERSITY ASSISTANT PROFESSOR is usually estimate the monthly gross earnings of a wage
given a monthly salary . If his salary is earner for each. Assume An average wage earner
PhP20, 000 /month. How much does he get works 26 working days a month. Use the middle
every two weeks. value of the minimum wage rate
Solution: If he gets PhP40, 000 per month then a. A factory worker in Laguna processing zone
he is paid PhP20,000 every two weeks Region Non agricultural
Wages IV A 262 – 362
 A tutor who is paid PhP200 per hour is Solution Y = r x 26
earning a wage. How much does he earn for
a 10-hr week work?
Solution: PhP200 x 10hrs = Php2,000 on that b. An agricultural worker who works in a
week. plantation in Davao
MINIMUM WAGE Region Agricultural(PhP)
Lowest fixed wage rate mandated by law that an IV A 307
employers must pay their workers
COST OF LIVING ALLOWANCE (COLA)
an amount of money that an employee gets 1 Finding the monthly gross earnings of a wage earner
in addition to his or her normal pay, because (wage rate and COLA)
the cost of living in a particular area is high: .
II. INCOME AND BENEFITS 1. A paralegal assistant of a law firm earns a daily
INCOME is the amount of money a business wage rate of PhP 600 and receives a COLA of
or person receives in exchange for services or PHp50 a day. Find the gross monthly earnings
goods rendered. of the paralegal assistant?
GROSS EARNINGS refers to revenues from the Solution : Y = (r + COLA) x 26days
sales of goods and services minus cost
>These services can be any of the following:
1. payment for services rendered such as Hourly daily wage rate the daily wage rate per hour r h is
salaries, wages , commissions and similar the payment a wage earner receives to each hour of
items work .rh = r/8
2. Income from exercise of trade or profession Hourly daily salary rate the daily rate per hour an
3.Gains made from dealings of property employees receives in one hour of work. rh = r/8
4. Interest, Rent, Royalties , Dividends
5. Annuities, Prices and winnings, Pensions
BENEFITS is employee compensation given by
an employer on top of the basic salary/wage.
This can be in the form of cash or in kind.
The following are examples of benefits and
salaries of a salary/wage earner
1. Social Insurance
 OVERTIME PAY additional compensation given to an
employee
To compute for overtime pay we need the following:
1. Hourly rate of the wage of the employee
2. Type of workday: ordinary day, special holiday,
regular holiday, rest day
3. Number of hours of overtime
OVERTIME RATES
1. 125% of the hourly rate in excess of 8 hrs in an
ordinary day
2. 130% of the hourly rate in excess of 8 hrs in an
special holiday, rest day, regular holiday
3. Note: work on a special holiday , a rest day or
regular holiday is paid at a different rate from an
ordinary day work
a. A special holiday : 130% basic daily wage
b. A special holiday which is also a scheduled
rest day” 150% of a basic daily wage
c. A regular holiday: 200% basic daily wage
d. A regular holiday which is also a rest day
260% basic daily wage
EXAMPLE:
1.Suppose an employee is paid PhP70 per hour in an
ordinary day. The following are the overtime pay that
he will get for working overtime.
a. Ordinary day
PhP70 x 1.25 = 87.50/hr
b. Special Holiday
PhP70 x 1.30 = 87.50/hr

2 Overtime rate per hour on ordinary days

ro = overtime rate per hour
ro = rh x 125%
Overtime pay o = ro X N

O = OVERTIME PAY
ro = overtime rate per hour
N = NUMBER OF HOURS WORK
V, Finding the overtime pay of a wage earner.
A paralegal assistant of a law firm earns a daily wage rate
of PhP 600. His supervisor requested him to work
overtime. He worked for 2 hours, Assume that it was an
ordinary day.
1. Find the overtime rate?
2. Find the overtime pay
Solution: Get first the hourly rate
1. rh = r/8 rate = PhP 600
rh = 600/8 = 75PhP
ro = rh x 125% = 75 x 1.25 = 93.76PhP
2 hour overtime
3. r
O = o X N 93.76PhP x 2 = 187.50PhP