Lesson Objectives
Students shouldbe able to:
• Compute monthly and weekly salary from
annual income
• Calculate wages based on daily/hourly
work
• Solve problems involving overtime,
allowances, commission, and piecework
3.
• Monthly Salary– A fixed
amount of money received
every month regardless of
hours worked.
• Daily/Hourly Wage –
Payment based on the
number of hours or days a
person works.
• Overtime Pay (OT) –
Additional pay given for
working beyond regular
working hours.
Common Types of Earnings
• Allowances – Extra money
provided by employers for
specific needs like food or
transportation.
• Commission – Earnings
based on a percentage of
total sales made by a worker.
• Piecework – Payment based
on the number of items
produced or tasks completed.
4.
ANNUAL SALARY: totalearnings for one year of work
Usually stated as a gross amount
(before taxes and deductions)
Example: 500,000Php per year
Question: Why might someone prefer an annual salary over hourly
pay?
ANNUAL SALARY BASICS
5.
• To findthe monthly salary, divide the total annual
salary by 12 months. This helps workers understand
how much they receive each month for budgeting.
• Example: Ana works in an office in Manila with an
annual salary of ₱300,000. How much is her monthly
salary?
⚬ Solution:
￭ Monthly Salary = 300,000 ÷ 12
￭ Monthly Salary = ₱25,000
⚬ Explanation:
￭ Most salaried employees receive pay monthly.
Annual to Monthly Salary
6.
To find weeklywage: Divide annual salary by 52
(weeks in a year)
Example: 500,000.00Php ÷ 52 = 9615.384Php per week
This assumes you work all 52 weeks
Question: How might your calculation change if you have unpaid
vacation?
FROM ANNUAL TO WEEKLY WAGE
7.
• Example: Ben’sannual salary is
₱260,000. How much does he earn
per week?
⚬ Solution:
￭ Weekly Salary = 260,000 ÷
52
￭ Weekly Salary = ₱5,000
⚬ Explanation:
⚬ Used for comparison or
budgeting weekly expenses.
Annual to Weekly Salary
• Weekly salary is found by
dividing the annual salary
by 52 weeks. This is useful
for tracking weekly
expenses and savings.
• If you save part of your
weekly salary, you can better
manage your money for the
whole year.
8.
HOURLY RATE: amountearned per hour of work
Common for part-time jobs and some full-time positions
Example: 150.00Php per hour
Why it matters: Helps you calculate earnings for variable hours
HOURLY RATE BASICS
9.
• Based onDepartment of
Labor and Employment
guidelines:
• Overtime Pay = 1.25 × hourly
rate
• Overtime pay is higher than
regular pay because it
compensates workers for extra
hours. In the Philippines, it is
commonly computed as 1.25 times
the hourly rate.
Overtime Pay
• Example: A factory worker earns
₱80/hour and works 2 hours
overtime.
⚬ Solution:
￭ OT Rate = 80 × 1.25 = ₱100
￭ OT Pay = 100 × 2 = ₱200
⚬ Explanation:
￭ Overtime is paid higher than
regular hours.
11.
Overtime Pay
Here ishow much you would make for 1 hour of overtime under each
scenario:
1. Regular Workday Overtime
Multiplier: 1.25x (Base hourly rate + 25%)
The Math: ₱80 times 1.25
Your OT Rate: ₱100.00 per hour
2. Scheduled Rest Day Overtime
Multiplier: 1.69x (Rest day hourly rate is 1.30x; OT adds 30% on top of
that: 1.30 times 1.30)
The Math: ₱80 times 1.69
Your OT Rate: ₱135.20 per hour
Let's look at exactly how this math plays out in real life.
To make the calculations easy to follow, let’s assume a daily wage of ₱640.
Since a standard workday is 8 hours, your Regular Hourly Rate is ₱80 (640
divide 8hours).
12.
3. Special Non-WorkingHoliday Overtime
Multiplier: 1.69x (Special holiday hourly rate is 1.30x; OT adds 30% on top of
that: 1.30 times 1.30)
The Math: ₱80 times 1.69
Your OT Rate: ₱135.20 per hour
4. Rest Day Falling on a Special Holiday Overtime
Multiplier: 1.95x (The premium rate for working this day is 1.50x; OT adds 30%
on top: 1.50 times 1.30)
The Math: ₱80 times 1.95
Your OT Rate: ₱156.00 per hour
Let's look at exactly how this math plays out in real life.
To make the calculations easy to follow, let’s assume a daily wage of ₱640.
Since a standard workday is 8 hours, your Regular Hourly Rate is ₱80 (640
divide 8hours).
Overtime Pay
13.
Overtime Pay
5. RegularHoliday Overtime
Multiplier: 2.60x (Regular holiday rate is double pay or 2.00x; OT adds 30% on
top: 2.00 times 1.30)
The Math: ₱80 times 2.60
Your OT Rate: ₱208.00 per hour
6. Rest Day Falling on a Regular Holiday Overtime
Multiplier: 3.38x (The premium rate for this rare alignment is 2.60x; OT adds
30% on top: 2.60 times 1.30)
The Math: ₱80 times 3.38
Your OT Rate: ₱270.40 per hour
Let's look at exactly how this math plays out in real life.
To make the calculations easy to follow, let’s assume a daily wage of ₱640.
Since a standard workday is 8 hours, your Regular Hourly Rate is ₱80 (640
divide 8hours).
14.
Overtime Pay
Bonus Example(Night Shift OT): If you are working overtime on a regular
workday, but that overtime hour happens at 11:00 PM, you add a 10% Night
Differential to your OT rate.
₱100.00 (Regular OT Rate) times 0.10 = ₱110.00 for that hour.
Let's look at exactly how this math plays out in real life.
To make the calculations easy to follow, let’s assume a daily wage of ₱640.
Since a standard workday is 8 hours, your Regular Hourly Rate is ₱80 (640
divide 8hours).
15.
• Based onDepartment of
Labor and Employment
guidelines:
• Overtime Pay = 1.25 × hourly
rate
• Overtime pay is higher than
regular pay because it
compensates workers for extra
hours. In the Philippines, it is
commonly computed as 1.25 times
the hourly rate.
Overtime Pay
• Example: A factory worker earns
₱80/hour and works 2 hours
overtime.
⚬ Solution:
￭ OT Rate = 80 × 1.25 = ₱100
￭ OT Pay = 100 × 2 = ₱200
⚬ Explanation:
￭ Overtime is paid higher than
regular hours.
16.
Total Daily Wagewith
Overtime
Example: A fast-
food crew member
earns ₱70/hour. He
works 8 regular
hours + 2 OT hours.
Solution:
Regular Pay = 70
× 8 = ₱560
OT Rate = 70 × 1.25
= ₱87.50
OT Pay = 87.50 × 2
= ₱175
Total Wage = 560 +
175 = ₱735
Total wage is the sum of regular
pay and overtime pay. Always
compute them separately before
adding.
17.
• Allowances areadded to the basic salary to cover extra
expenses like food or transportation. These increase the
total earnings of a worker.
• Example: A call center agent earns a monthly salary of
₱20,000 and receives: ₱2,000 transportation allowance
and ₱1,500 meal allowance. Find the total monthly
earnings.
⚬ Solution:
￭ Total = 20,000 + 2,000 + 1,500
￭ Total = ₱23,500
⚬ Explanation:
￭ Allowances are common benefits in PH jobs.
Allowances
18.
Commission and
Piecework
• CommissionExample: A sales agent in a
gadget store earns 5% commission. He sold
₱40,000 worth of items.
⚬ Solution:
￭ Commission = 0.05 × 40,000
￭ Commission = ₱2,000
• Piecework Example: A worker in a garment
factory earns ₱12 per shirt sewn. She made
50 shirts in one day.
⚬ Solution:
￭ Earnings = 12 × 50
￭ Earnings = ₱600
Commission income
depends on how
much a worker sells.
Piecework income
depends on how
many items are
produced.
The higher the
sales/items
produced, the higher
the earnings.
19.
GUIDED PRACTICE
Solve forthe following:
1.A teacher earns ₱360,000 annually.
Find monthly salary.
2.A delivery rider earns ₱500 per day for
6 days. Find weekly earnings.
3.A saleslady earns 10% commission on
₱15,000 sales.
20.
Juan Dela Cruzis a regular, rank-and-file production supervisor at Bagong Bukas
Manufacturing Corp. in Metro Manila. The company utilizes a 5-day workweek schedule
(Monday to Friday) and uses the standard DOLE-recognized 261-day annual divisor for
payroll computations.
Aside from his structural supervisory duties, Juan also helps on the floor under a mixed-
earning policy. For the payroll period of June 2026, his earnings profile and timecard show
the following parameters:
Employee Data & Benefits
•Monthly Basic Salary: ₱26,100.00
•Allowances: A fixed monthly De Minimis allowance of ₱2,000.00, plus a monthly taxable
living allowance of ₱1,500.00.
•Commission: Juan earns a 3.5% commission on any factory-direct bulk sales he secures.
This month, he closed a client order worth ₱120,000.00.
•Piecework Incentives: The company pays a quota bonus of ₱12.50 per excess unit
produced over the team's standard target. Juan personally processed 240 excess units
during his shifts.
E X A M P L E
21.
1. Basic Pay& Daily/Hourly Rates
To handle any future daily or hourly deductions or additions, we first establish
Juan's daily and hourly rates using the company's 261-day annual divisor
(standard for a 5-day workweek).
Annual Basic Salary: 26,100.00 times 12 months = 313,200.00
₱ ₱
Daily Rate: 313,200.00 / 261days = 1,200.00 per day
₱ ₱
Hourly Rate: 1,200.00 / 8 hours = 150.00 per hour
₱ ₱
2. Allowances
Juan receives two types of allowances, which are treated differently for tax
purposes under Philippine law:
De Minimis Allowance (Non-taxable): 2,000.00
₱
(Benefits of relatively small value exempt from income tax/withholding).
Cost of Living Allowance (Taxable): 1,500.00
₱
22.
3. Mixed-Earning Incentives
Becauseof the company's mixed-earning policy, Juan capitalized on both factory sales and extra floor
production this month.
Bulk Sales Commission: 3.5% of ₱120,000.00
₱120,000.00 times 0.035 = ₱4,200.00
Piecework / Quota Bonus: 240 excess units at ₱12.50 per unit
240 times ₱12.50 = ₱3,000.00
Earnings Component Amount Tax Status
Monthly Basic Salary ₱26,100.00 Taxable
Taxable Living Allowance ₱1,500.00 Taxable
Bulk Sales Commission ₱4,200.00 Taxable
Piecework Incentives ₱3,000.00 Taxable
De Minimis Allowance ₱2,000.00 Non-Taxable
TOTAL GROSS EARNINGS ₱36,800.00
Summary of Total Gross Earnings
Putting it all together, here is Juan's total earnings profile for the month:
