ASIAN INSTITUTE OF SCIENCE AND TECHNOLOGY

BALIWAG BRANCH
SALARIES AND WAGES JOMAR V. VILLENA, CPA
EMPLOYEE COMPENSATION refers to the remuneration or reward that an employee gets from
his or her employer for the services he or she gives the latter.

WAGES
Basic Pay is an employees compensation package refers to the wages or salaries
they get.
Wages refer to the earnings received by worker on a piece rate, hourly rate, or daily
rate.

PIECE RATE
A worker employed on a piecework basis is paid in proportion to the quantity of work he or
she finishes. The rate used can be fixed irrespective of the quantity produced, in which case
it is called a fixed piece rate plan. On the other hand, it can be graduated, increasing as the
quantity produced increases, in which case it is called differential piece work plan.

Example:
1. Tammy is paid on a per piece basis at the rate of 1.20 per piece. If she finishes 360
pieces a week, how much is her total earnings?
2. Linda is employed to repack and seal pepper. She is paid on the following differential
pay plan schedule?
Quantity Daily Rate per 100 Quantity Daily Rate per 100
packs packs

Less than 100 100.00 150-199 107.50

100-149 105.00 200 or more 110.00

For the week, Linda repacked the following quantities:

Monday 95
Tuesday 102
Wednesday 130
Thursday 152
Friday 201

Compute her total wage for the week?

HOURLY RATE
Many employees are paid on an hourly basis. To compute for the pay, we simply
multiply the number of hours of work by the hourly rate.
For example: If an employee worked 40 hours during the week and his and her rate is
10.00 per hour. Compute the wages?

OVERTIME PAY
Assuming that the minimum daily wage rate is 340.0, how much is the overtime rate
per hour?
1. On Ordinary Day
1st: Compute the hourly rate per hour
2nd: Overtime Rate=Regular Hourly Rate + 25% of the Regular Hourly Rate

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 ASIAN INSTITUTE OF SCIENCE AND TECHNOLOGY
BALIWAG BRANCH
SALARIES AND WAGES JOMAR V. VILLENA, CPA

2. On Rest Day or Special Day

Rest Day Rate and Special Day Rate=130% of Regular Hourly Rate

3. On Rest Day which Falls on a Special Day

Rest Day falls on Special Day rate = 150% of Regular Hourly Rate
Example: Zenaida earns the regular daily rate of 340 giving her an hourly rate
of 42.50. She was requested by her boss to work on her rest day, which falls
on Maundy Thursday.
A. She worked for 8 hours. Compute the total pay for the day.

B. She worked for 10 hours. Compute the total pay for the day.

4. On a Regular Holiday
Regular Holiday Rate= 200% of a regular hourly rate
Example: Esther earns the regular daily rate of 340 giving her an hourly rate of
42.50. She was requested by her boss to work on May 1, Labor Day.

A. She worked for 8 hours. Compute the total pay for the day.

B. She worked for 10 hours. Compute the total pay for the day.

5. On a Rest Day which falls on a Regular Holiday

Hourly Rate=260% of Regular Hourly rate
Example: Teresita earns the regular daily rate of 340 giving her an hourly rate
of 42.50. She was requested by her boss on December 30, Rizal Day, which is
a regular holiday. However, Rizal Day fell on a Monday, which was Teresitas
rest day.
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 ASIAN INSTITUTE OF SCIENCE AND TECHNOLOGY
BALIWAG BRANCH
SALARIES AND WAGES JOMAR V. VILLENA, CPA

A. She worked for 8 hours. Compute the total pay for the day.

B. She worked for 10 hours. Compute the total pay for the day.

ILLUSTRATION:
1. Joselito is paid on an hourly basis. Forty hours a week is considered his regular hours
and anything in excess is considered overtime. His regular rate is 15 per hour and he is
paid 25% premium on overtime. He worked for the following hours for the past weeks:
Monday 8 hours
Tuesday 4 hours
Wednesday 8 hours
Thursday 10 hours
Friday 8 hours
Required: Compute for his gross earnings?

2. Assuming that instead of 8 hours for Wednesday and Friday, Joselito worked 10 hours
for those days.
Compute the following:
A. Gross Earnings
B. Overtime Pay
C. Total Pay

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 ASIAN INSTITUTE OF SCIENCE AND TECHNOLOGY
BALIWAG BRANCH
SALARIES AND WAGES JOMAR V. VILLENA, CPA
PAYROLL DEDUCTIONS

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 ASIAN INSTITUTE OF SCIENCE AND TECHNOLOGY
BALIWAG BRANCH
SALARIES AND WAGES JOMAR V. VILLENA, CPA

ILLUSTRATION:
Below are the employees of the summit Co. Inc. indicating their basic salary per month.
Abegail M. Marinas 50,000
Bernadette M. Lopez 45,000
Catherine L. Macuja 30,000
Efren C. Seguerra 28,000
Dory B. Agapito 22,000

Compute the following:

1. SSS Contribution
2. Phil health Contribution
3. Pag ibig Contribution
4. Net Pay

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