2. 1. MINIMUM WAGE
A minimum wage rate was set per region, province
and industry sector. This may vary depending on
the number of employees and gross sales of an
enterprise and its industry sector.
Note: Minimum wage earners are exempted from
tax.
3. 2. OVERTIME PAY
An overtime pay is an additional compensation
given to an employee who renders service beyond
the maximum number of working hours per day (8
hours per day). The additional compensation is
equivalent to at least 125% of the employee’s
hourly rate.
4. 3. PREMIUM PAY
A premium pay is an additional compensation if an
employee worked within 8 hours during non-
working days such as rest days and special
holidays. If an employee did not rendered work or
not required to work on this day, then he is not
entitled to any compensation.
5. 4. HOLIDAY PAY
Based on the Labor Code, all employees shall be
paid with their daily basic wage for regular
holidays, whether they work on that day or not.
6. 5. NIGHT SHIFT DIFFERENTIAL
An employee who work between 10:00 PM and
6:00 AM receives an additional 10% premium
called night shift differential (NSD), also known as
night shift pay.
7. 6. 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.
8. 7. SERVICE CHARGES
Service charges are the amount collected by some
restaurants, hotels, night clubs, and the like. For
the employees of employers collecting service
charges are entitled to an equal share in the 85%
of the total charges, while the remaining15% of the
charges may be retained to the management.
9. 8. SERVICE INCENTIVE LEAVES
An employee who has rendered at least one (1)
year of service is entitled to Service Incentive Leave
(SIL) of five days with pay which can be used for
sick and vacation leave purposes. At the end of the
year, unused SIL can be converted into cash based
on the salary rate.
10. 9. PARENTAL LEAVES
A. MATERNITY LEAVE
According to the Expanded Maternity Leave (EML) Bill, the law grants each
pregnant employee 105 days of maternity leave credits. It also allows new
mothers to extend this leave for an additional 30 days, but this will be an
unpaid leave.
B. PATERNITY LEAVE
The R.A No. 8187, or Paternity Leave Act of 1996, grants seven (7) days of
fully paid leave to married fathers that is effective up to the first four
deliveries of the legitimate spouse. Under the EML, seven days of a
woman’s paid maternity leave credits can be transferred to fathers,
extending the allowed seven-day paternity to be extended to 14 days.
11. C. SOLO-PARENT LEAVE
Seven (7) days leave with pay are given to solo or
single mothers and fathers for every year of service,
aside from their other leave privileges (maternity or
paternity). Solo mothers can extend their leave for
15 days, and these are paid leaves.
12. 10. SPECIAL LEAVE BENEFITS FOR WOMEN
A. 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.
13. 10. SPECIAL LEAVE BENEFITS FOR WOMEN
B. 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.
14. 11. SEPARATION PAY
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.
15. 11. RETIREMENT PAY
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.
16. 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.
17. DE MINIMIS BENEFITS
• monetized unused vacation leave credits of private
employees not exceeding ten (10) days during the year;
• monetized value of vacation and sick leave credits of
government officials and employees;
• medical cash allowance to dependents of employees,
not exceeding ₱1,500 per employee per semester or
₱250 per month;
18. DE MINIMIS BENEFITS
• rice subsidy of ₱2,000 or one (1) sack of 50kg rice per
month amounting to not more than ₱2,000;
• uniform and clothing allowance not exceeding ₱6,000
per annum;
• actual medical assistance, e.g. medical allowance to
cover medical and healthcare needs, annual
medical/executive check-up, maternity, assistance and
routine consultations, not exceeding ₱10,000 per
annum;
19. DE MINIMIS BENEFITS
• laundry allowance not exceeding ₱300 per month;
• employee achievement awards, e.g. for length of
service or safety achievement, which must be in the form
form of tangible personal property other than cash or
gift certificate, with an annual monetary value not
exceeding ₱10,000 received by the employee under an
established written plan which does not discriminate in
favor of highly paid employees
20. DE MINIMIS BENEFITS
• gifts given during Christmas and major anniversary
celebrations not exceeding ₱5,000 per annum;
• daily meal allowance for overtime work and graveyard
shift not exceeding twenty-five percent (25%) of the
basic minimum wage on a per region basis; and
21. If the employer granted more than this account, the
excess might be included as a taxable compensation
income. If the excess benefits, bonuses, and the 13th
month pay exceeds ₱90,000 limit, that’s the time it is
taxable.
