This document defines various benefits that Filipino wage earners are entitled to by law, including minimum wage, overtime pay, premium pay for work on rest days and holidays, night shift differential, 13th month pay, service incentive leave, maternity/paternity leave, retirement pay, and separation pay. It also distinguishes taxable benefits from non-taxable benefits, with non-taxable benefits including certain de minimis amounts for items like 13th month pay, rice subsidies, uniforms, and medical allowances. Any benefit amounts beyond established ceilings are considered taxable.

2. Objectives
0• 1. define wages and benefits,
0• 2. enumerate the benefits of a
wage earner,
0• 3. define each of the benefits
given to a wage earner

3. Activity 1: As a recall on your previous
lesson on salaries and wages, read and
analyze each of the following problems
then solve. Write your final answer on a
separate sheet of paper. Round off your
answer to the nearest centavo. Show
your solutions.

4. Activity 2: Word-Teasers
Guess the mystery words using the
given jumbled letters. Some clues are
already given to you.

6. 0BENEFITS OF A
WAGE EARNER

7. Minimum Wage
0Filipino wage earner should at least
earn the minimum wage in his or her
region.
0Republic Act 6727 or the Wage
Rationalization Act states that the
required province and industry.

9. Overtime pay during regular working days
0Filipino wage earners should be paid an
overtime pay for the extra working hours that
she/ he renders.
0Philippine Labor Code requires the maximum
number of working hours per day should be 8
hours. For every hour excess of 8 hours in a day,
he or she should be entitled to an overtime pay
that is equivalent to at least 125% of his her
hourly wage

10. Example 1: Calculating overtime
pay on regular working day
0During a mall sale , Andoy who is
working as a bagger, rendered 4 hours
more than his required working
hours. If he is paid 50.50 pesos an
hour, how much is his overtime pay?

11. Premium Pay During Rest Day and
Special Holidays
0 Filipino wage earner is entitled to a premium pay for
performing work during non working days such as rest
days and special holidays.
0 Premium pay refers to the additional compensation
required by law for work performed within 8 hours on
non working days and special holidays

13. Premium Pay During Rest Day and
Special Holidays
0Labor codes requires at least one rest day per
week.
0There 3 identified special holidays in the
Philippines- Ninoy Aquino, All Saint’s day and
last day of the year. Wage earners are not
entitled to any compensation if they so no work
on these days.

14. Premium pays based on the following rules:
0 Work on Restday or Special Holiday- the wage earner
is entitled to a premium pay that is equivalent to his/
her daily wage plus at least 30% of his/her daily
wage.
0 Work on Special Holiday that falls on the Rest day-the
wage earner is entitled to a premium pay that is
equivalent to his/ her daily wage plus at least 50% of
his/her daily wage.

15. Example 2: Computing the premium pay on the rest
day or special holiday
0 Andoy works as a manager in a certain company and
earns a daily wage of 875 pesos. On one of his rest
days, the company need his service
a. How much will be his premium pay if he works
during his rest day?
b. Suppose his rest day falls on all All Saint’s Day and
he need to work. How much will be his premium
pay?

16. Premium pay During Regular Holiday
0Filipino wage earners is entitled to
a holiday pay for performing work
on nonworking holidays.
0During regular holiday they receive
their basic salary wage even if they
do not work

17. Premium pay During Regular Holiday
0 Holiday pay rates
a) If a wage earner performs work on regular holiday,
he or she is entitled to a holiday pay that is equivalent
to at least twice his regular wage salary.
b)If wage earner performs work on regular holiday that
falls on his/ her scheduled rest day, he or she is entitled
to a holiday pay rate( twice or 200% of regular daily
wage) plus at least 30% of his/ her pay rate

18. Example: Computing holiday pay
0 Suppose a daily wage of Andy is 620 pesos. Compute
his holiday pay if
1. Did not work on a regular holiday
2. Worked on the holiday
3. Worked on a regular holiday which happens on his
restday

19. Night Shift Deferential
0 Every Filipino wage earner is entitled a night differential
for performing work between 10 pm and 6am
0 A night differential is the additional compensation given to
an employee who works during the above mentioned
condition. For the work performed between the given time,
the employee receives a night differential that is equivalent
to at least 10% of his regular daily wage.

20. Example: Computing the Night Differential
0A call center agent works 8 hours a day
and earns a daily wage of 750 pesos. If he
needs to work on a night shift for 5 days
in a certain month, how much will he
earn for the month? Assume that there
are 22 working days in a month

21. 13th month pays
0 Wage earner is entitled to 13th month pay, provided
that he or she worked for at least one month during
the calendar year.
0 13th month pay is form of monetary benefit equivalent
to monthly basic salary of an employee or at least one
–twelfth of his annual basic salary

22. Service Charge
0 A wage earner in a company that collects services fees
from its clients is entitled to a service charge
0 Service Charge is the amount that hotels, restaurant
and similar establishments receives from their clients
as payment for performing certain services. The labor
code state such service charges shall be distributed at
a rate of 85% for all covered employees and 5% for
the management.

23. Example: Computing the share of a wage
earner from a service charge
0An auto mechanic was asked to change the oil
and tune up, Mr. Bret’s truck . After finishing
the work Mr. Bret paid 800 pesos for the
service charge. If the shop has 16 employees,
how much of the service charge will the
mechanic receive?

24. Service Incentive Leave
0Wage earner who rendered at least one year
of service is entitled to a service incentive
leave of 5 days with pay.
0Service incentive leave may be either sick
leave or vacation leave. If the service incentive
leave is not used at the end of the year, it can
be converted into cash by applying daily wage
rate or the employee.

25. Maternity, Paternity and Paternal Leave
0 A female wage earner is entitled to a maternity leave
benefit equivalent to 100% of the current wage for 105
days.
0 Male wage earner is entitled to paternity leave benefit of
7 days for ech of the first four deliveries of his legitimate
spouse. Unlike a maternity leave, paternity leave is paid
by the employer and not reimbursed by SSS.

26. Maternity, Paternity and Paternal Leave
0Parental Leave benefit of 7 days is also
granted to solo parent wage earner to
enable them to perform duties and
responsibilities where physical presence
is required. In order to be entitled to this
benefit, a solo parent employee should
have rendered at least one year of service

27. Separation Pays
0 Wage earners who are validly dismissed from a
company for causes other than serious misconduct
are entitled for separation pay
Cause of dismissal Separtion pay rate
1. Automation or installation of labor
saving devices
At least one month pay, or at least one
month pay for every year of service
whichever is higher
2. Redundancy
3. Retrenchment One month pay or at least half month
pay for every year of service
whichever is higher
4. Closure or cessation of operation of
the establishment

28. Retirement pay
0 Retirement pay is equivalent to at least half month for every year of
service. A fraction of at least 6 months is considered as one whole year.
0 Retirement age is established in employment contracts or any
agreement between employees and their employer. In absence of such
agreement, employees may retire upon reaching the age of 60 or more,
but not more than 65 provided that they have served for at least 5 years
in the same company.
0 An age 60 or more but below 65 is considered as the voluntary
retirement age. An age of 65 is considered as compulsory retirement

31. Taxable and Nontaxable Benefits Bureau of Internal
Revenue Regulations No.11-2018 dated January 31, 2018
define the term fringe benefit as to any good, service or
other benefit furnished or granted in cash or in kind by an
employer to an individual employee. The benefits are
subject to tax for the amount beyond its limit or ceiling.
Section 2.78.1 of Revenue Regulation No. 11-2018,
provided in detail, the benefits called “de minimis”
benefits and other benefits that are taxable and
nontaxable. For the purpose of our discussion we will use
a table to distinguish taxable to nontaxable benefits.

32. 0 Based on the tax code the following benefits are
excluded from the computation of gross income,
provided that the amount remains below 82,000
pesos,
0 13th moth pay
0 Christmas Bonus
0 Productivity and incentive bonuses
0 Other benefits of the same nature in cash or kind
- Nontaxable benefits

33. De minimis Benefits
0 The following are some example of de minimis benefits, all
of which are nontaxable, as identified by Bureau of Internal
Revenue(BIR)
0 Monetized unused vacation leaves credits of employees
not exceeding 10 days during the year
0 Monetized value of vacation and sick leave credits paid to
government officials and employees
0 Medical cash allowance to dependents of employees, not
exceeding 750pesos per employee per semester of 125
pesos per month

34. De minimis Benefits
0 Rice subsidy of 1,500 pesos or one sack of 50kg of rice
per month, amounting not more that 1,500
0 Uniform and clothing allowances not exceeding 5,000
per annum
0 Actual medical assistance e.g. medical allowance to
cover medical and health need, annual medical,
maternity assistance not exceeding 10,000 per annum
0 Laundry allowances not exceeding 300 pesos per
month

35. De minimis Benefits
0 Employee’s achievement award not exceeding 10,000
pesos
0 Gifts given during Christmas or anniversary not
exceeding 5,000pesos per annum
0 Daily meal allowances for overtime work and night or
graveyard shift not exceeding 25% of the minimum
wage on per region basis

36. 0For tax computation purposes, all other
benefits that are not included in the given list
are subject to applicable taxes, hence they are
taxable benefits. Common example are
housing or car benefits that are given to
eligible employees. In, general all benefits and
allowances that are above the stated ceiling
amount are taxable and any excess on the
stated amount on minimis benefits will also be
subjected to applicable tax

37. Taxable Benefits
0Amount exceeded the limit or ceiling as
prescribed in Revenue Regulation
No.11-2018.
0 Amount exceeded the ninety thousand
pesos ͥ₱90,000 limit as prescribed in
Revenue Regulation No.11-2018