The document explains the differences between monthly-rate and daily-rate salaries, highlighting that daily-rate employees are paid based on actual days worked, while monthly-rate employees receive a fixed amount regardless of absences. Monthly rates, intended for convenience, simplify payroll processing but can lead to confusion due to previous labor regulations. The document notes a void regulation regarding the definition of monthly-paid employees as per the labor code.

2. Monthly Rate vs Daily Rate
When it comes to salary rates, there are 2 types:
 Monthly Rate and
 Daily Rate.
 Some companies do apply the Hourly Rate, but this follows the
same principles applied to the Daily Rate.

3.  In essence, daily-rate and monthly rate employees are the same.
Both types of employees are paid for the amount of time they put in
at work.
 The main difference is that
o daily-rate employees are paid based on the actual # of days
worked, while
o monthly-rate employees are paid a fixed amount per pay period,
assuming that they had no absences.

4.  If an employee’s daily-rate is P500.00 and the employee worked for 10
days, that equates to a pay of P5,000.00. Given this, the salary of a daily-
rate employee may vary each pay period, depending on the actual # of
working days included in that period.
 Monthly-rate employees are paid a fixed amount per pay period, regardless
of the # of actual working days included in the period.
 So if an employee’s monthly rate is P15,000.00, the employee will be paid
the same amount in February as well as in March, even if February is a
much shorter month than March.
 The monthly rate came about mainly for convenience’s sake, since it is
easier to compute for and pay a fixed payroll amount per period.

8. Monthly-rate Example:
•Monthly rate = P15, 000.00
•Semi-monthly rate = P15, 000 / 2 = P7, 500.00 per pay period.
•Hourly rate (based on 365 days per year factor) = P15, 000.00 x 12 / 365 / 8 =
P61.64 per hour.
•# of Absences = 16 hours
•# of Undertime = 2 hours
•# of Lates = 3 hours
•Total deduction = (16hrs + 2hrs + 3hrs) x P61.64 = P1, 294.44
•Payroll = P7, 500.00 – P1, 294.44 = P6, 205.56

12. • However, due to a void regulation by the then Ministry of Labor and
Employment (now DOLE), confusion resulted when a regulation was passed
providing the definition of monthly-paid employees as those that are paid by
the month “irrespective of the number of working days therein”.
• This rule was found in Section 2, Rule IV of Book III of the Omnibus Rules
Implementing the Labor Code, which again has been declared void by the
Supreme Court.