Module Business Mathematics 4th Quarter

St.
Paul University Surigao

ST. PAUL UNIVERSITY SYSTEM
Basic Education Department
Km. 3, Brgy. Luna, Surigao City
SENIOR HIGH SCHOOL
FOURTH QUARTER
MODULE IN
BUSINESS
MATHEMATICS
Life Performance Outcomes:
 Mindful, Self-Directed Learners & Role Models
 Conscientious, Adept Performers & Achievers
Essential Performance Outcomes:

 Explain the factors that generally affect their decisions and actions, and assess the
consequences they produce.
 Continually set and re-set challenging improvement goals for themselves that require
persistence, self-motivation, and self-regulation which others can monitor and validate.
Content Standard:
 Demonstrate an understanding of the fundamental operations of mathematics as applied in
salaries and wages.
Performance Standard:
 apply appropriate mathematical operation in computing salaries and wages
Most Essential Learning Competencies:

 Illustrate the different types of commissions
 Compute commissions on cash basis and solve problems involving commissions.
Read this!
A. Types of Commission
When salespersons close a business deal that involves selling a product or a service-for example,
real estate, appliances, Internet service, and insurance policies - to their customers, the agents are
often paid a certain amount based on a percentage of their sales. Such amount is called a
commission. The amount that they receive is based on the commission rate that their employer sets.
A higher commission rate on the same sales amount would mean a higher commission.
Since a commission is a percentage of the sales, then the commission is equal to the product of the
commission rate and the sales amount.
Formula in Calculating the Commission:

If a commission rate r is applied on a sales amount S, then the commission C is
Commission: C=r ∙ S
There are three commonly known types of commission; namely,

1. Straight commission;
2. Salary-plus-commission; and
3. Graduated commission.
Let us discuss the definition and a corresponding example for each type of commission one by one.
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1. Straight Commission
When employees are paid only on commission -that is, their commission is already their entire pay-
they are said to be working on straight commission. For example, when a real estate owner hires sales
agents to sell a property, there are cases when the agents only get paid based on a percentage of the
property's market value after they close a deal with a client. The amount that they receive is a straight
commission. They will only get paid for every property that they successfully sell. If they are not able to
sell anything, they will not receive any payment for their services. To compensate for such downside,
the straight commission rate is usually higher than the rates for other types of commissions.
To calculate the straight commission, we simply use the previously presented formula in finding the
commission. Study how this is done in the two succeeding commissions.
Example 1: Estes is a real estate sales agent who receives a straight commission of 5% for every
property that she sells. If she successfully sells a house for P5,000,000, how much will she get paid?
Solution: To determine Estes’ commission, use the formula C=r ∙ S ; that is
C=r ∙ S=( 0.05 ) ( 5,000,000 )=250,000
Therefore, Estes will get ₱250,000 as straight commission.
Example 2: If the commission on the sale of ₱16,950 worth of clothes is ₱1,271.25, what is the
commission rate?
Solution:
Given: Commission = ₱1,271.25
Sales amount = ₱16,950
C=r ∙ S
₱ 1,271.25=r ∙ ₱ 16,950
₱ 16,950 ₱ 16,950
0.075∨7.5 %=r
Thus, the commission rate 7.5%
2. Salary-Plus-Commission
Many salespersons do not prefer to work on straight commission because there are times when
closing a deal with their clients does not come easy. To address such concern, many employers offer
their salespersons a fixed monthly salary in addition to their commission. This type of commission is
called salary-plus-commission.
Although salespersons can expect to receive a fixed amount of salary in a salary-plus-commission

arrangement, there are cases when the commission is only given after they reach a certain sales
amount. Moreover, the commission rate in this arrangement is usually lower than that of a straight
commission. The commission is just like a form of an incentive given by an employer to encourage their
personnel to achieve higher sales.
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Formula in Calculating Salary-Plus-Commission:
The salary-plus-commission, which we denote as SC, is the sum of the (monthly) pay P and the
commission C; that is,
S C=P+C or
S C=P+r . S since C=r . S
Example 3: Peter works as a salesperson. His employer pays him a salary of P4,000 per week, plus a
3% commission whenever his sales exceed P3,000. If he sold items worth P5,000 in a certain week,
how much did he receive that week?
Solution:
Given: Commission rate = 3%
Weekly Pay = ₱4,000
S C=P+r . S
S C=4,000+(0.03)(5,000)
S C=4,000+150
S C=4,150
Thus, Peter received a total of ₱4,150 that week.
Example 4: Jayney dela Fuente works on a pay schedule of ₱21,300 per month plus a 3% commission
on all sales. If she sold ₱104,900 last month, what is Jayney’s total gross pay?
Solution:
Given: Commission rate = 3%
Salary = ₱21,300
S C=P+r . S
S C=21,300+(0.03)(104,900)
S C=21,300+3,147
S C=24,447
Thus, the total gross pay is ₱24,447.
3. Graduated Commission
The third type of commission is called graduated commission, which means that the percent of sales
earned (that is, the commission rate) increases incrementally as the sales amount increases. A
company usually implements a graduated commission scale to motivate salespersons to increase their
sales. For instance, salespersons may get n% commission if they achieve a certain sales amount, a
higher m% commission (that is, m% > n%) if they achieve a higher sales amount, and so on. The next
example demonstrates how this commission is computed.
Example 5: Evelyn de Guzman sells OHP projectors for WSS Tech Products. She is on graduated
commission schedule of 2.5% of sales up to P100,000, 3% for the next P150,000 and 4% on the sales
greater than P250,000. What is Evelyn's total gross pay for last month if her sales volume was
P300,000?
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Solution:
Given: Commission rate (Level 1) = 2.5%
Commission rate (Level 2) = 3%
Commission rate (Level 3) = 4%
Using a graduated commission schedule, we determine the pay for each level and then get the sum of
all the levels.
Level pay =sales amount ∙ commission rate

Level 1 pay=100,000 ∙ 0.025=2,500 (for the first ₱100,000)
Level 2 pay=150,000 ∙ 0.03=4,500 (For the first ₱100,000)
Level 3 pay=50,000∙ 0.04=2,000 (For more than ₱250,000)
Thus, her total gross pay is ₱9,000.
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Life Performance Outcomes:
 Mindful, Self-Directed Learners & Role Models
 Courageous, Resourceful Explorers & Problem Solver
 Conscientious, Adept Performers & Achievers

 Explain the factors that generally affect their decisions and actions, and assess the
consequences they produce.
 Consistently seek feedback from informed, credible individuals on the accuracy, clarity,
authenticity, and tone of their communications and practice revising and restating them until
they are well received.
 Continually set and re-set challenging improvement goals for themselves that require
persistence, self-motivation, and self-regulation which others can monitor and validate.
Content Standard:
salaries and wages.

 Define salary, wage, income, benefits
 Compute gross and net earnings
 Define each of the benefits given to wage earners
 Distinguish taxable from nontaxable benefits
Read this!
A. Salary, Wage, Income and Benefits
Employers can pay their employees either in salary or in wages at various time intervals. A salary
is a fixed amount of money that an employee typically receives on a monthly or bimonthly basis, but it
may also be expressed as an annual sum. Employees who receive salaries are called salaried
employees. The succeeding example illustrates how a monthly salary is computed.
Example 1: Amlong works as an employee in a rural bank. If he earns ₱360,000 in a year, how much is
his monthly salary?
Solution: A year has 12 months. So, we divide the given annual salary by 12 to get the monthly salary;
that is,
360,000 ÷ 12=30,000
Thus, Amlong’s monthly salary is ₱30,000.
There are also employees who do not receive a fixed monthly salary; they are paid in wages
instead. A wage is an employee's compensation that is based on an hourly rate of pay and the number
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of hours worked. It is typically paid on a daily or weekly basis, but in certain cases, it may also be paid
on a monthly or bimonthly basis. Employees who receive wages are called wage earners. The
succeeding formula is used to calculate the total wage of an employee.
Formula for Calculating the Total Wage:

The total wage of an employee, denoted by W, is computed by multiplying the total number of
hours (n) an employee renders and his/her hourly rate (R). In symbols,
Wage: W =n ∙ R
Example 2: A manufacturing company pays its workers an hourly wage of ₱75 for a maximum of 40
hours a week. Can a worker receive a total weekly wage of ₱4,000? Explain your answer.
Solution: The hourly wage of a worker is ₱75. If a worker renders 40 hours in a week, his weekly wage
is computed as follows:
W =n ∙ R
W =(75)(40)
W =3,000
Therefore, a worker in that company is receiving less than ₱4,000 every week.
There are people who earn money not only by receiving a salary or wage, but also by getting
professional fees for their rendered services or by gaining profits in their businesses or investments.
Some employees can maintain their day jobs, and then venture in online selling of products and
services, stock trading, or other businesses. The total amount that people earn from their employment,
businesses, investments, and the professional services that they render is called their income. The
next example shows how to compute for the income of an employee who also earns money from other
sources.
Example 3: A teacher receives a monthly salary of ₱8,000. She also works as a tutor for 3 hours every
Saturday. If she is paid P150 an hour for her tutoring services, how much is her total monthly income?
Assume that there are 4 Saturdays in a month.
Solution: As a tutor, she works for 3 hours in each of the 4 Saturdays in a month. So, for her tutoring
services, the total amount that she earns in a month may be computed as follows:
150 ×3 × 4=1,800
To get her total income in a month, simply add P1,800 to her monthly salary of P8,000; that is,
8.000+1.800=9,800
Thus, her total income in a month is ₱9,800.
There are companies that provide non-wage compensation, allowances, or incentives in addition to
their employees' regular wages or salaries. Such additional compensation is collectively called as
employee benefits. The following are some examples of employee benefits; transportation allowance,
housing, group insurance, and rice subsidy, among others.
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Example 4: Suppose company A offers you a monthly salary of P30,000. However, the workplace is far
from where you live; so, you are planning to rent a house near it. The rent for the house that you are
considering costs P5,000 a month. On the other hand, company B offers you a monthly salary of only
P27,000 but provides a free accommodation near your workplace. Based on the given information,
which company is offering a better compensation and benefits package?
Solution: Company A offers a higher monthly salary of P30,000. However, if you consider the cost of
renting a house, which is P5,000, your monthly income will be reduced to:
30,000−5,000=25,000
On the other hand, company B offers a lower monthly salary of P27,000, but it also offers free
accommodation. So, your income of P27,000 will not be affected by any house rent. Thus, based on
the given information, company B is offering a better compensation and benefits package.
B. Gross and Net Earnings
Income may also be derived from commissions, bonuses, royalties, and other types of additional
compensation like the following:
 overtime pay;
 premium pay;
 holiday pay; and
 night shift differential.
The total amount that people earn for performing a specific job during a specific period is also called
their gross earnings. For almost all employees, however, a part of their earnings is usually taken out
before they even receive their take-home pay. Employers withhold or deduct taxes and contributions for
the Social Security System (SSS), PhilHealth, and Pag-IBIG. The resulting amount after the deductions
had been applied on the gross earnings is called the net earnings.
Example 5: Pilong is an area manager in J & S Mart. He receives a monthly salary of ₱25,000. He also
owns a bond that has a face value of ₱200,000 and that earns at an annual simple interest rate of 6%.
How much is his gross earnings in a year?
Solution: It was given that Pilong’s monthly salary is ₱25,000; hence, his yearly salary is:
Yearly Salary=12 ( 25,000 )=300,000
Also, his ₱200,000 investment earns an annual simple interest at a rate of 6%; so, his earnings
from such investment can be computed as follows:
Earnings ¿ Investment =(0.06)(200,000)=12,000.
His gross earnings in a year can be computed by adding his total salary and his earnings from
his investment; that is,
Yearly Gross Earnings=300,000+12,000=312,000.
Therefore, Pilong's gross earnings in a year is ₱312,000.
Example 6: As a sales agent, Amlong earns a basic monthly salary of ₱22,000 plus a 12% commission
on his total monthly sales. His total sales in a particular month were ₱30,000. In the same month,
Amlong worked during 2 holidays. His employer entitles an employee twice the daily rate if the
employee works during a holiday. How much was the total amount of his gross earnings then? Assume
that there are 22 working days that month.
Solution: To determine Amlong's total gross earnings that month, we need to consider three things-his
basic salary, his monthly commission, and his extra pay for working during 2 holidays.
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It was given that his monthly basic salary is ₱22,000. Since there are 22 working days, his daily
rate can be computed as follows:
Daily Rate=22,000 ÷ 22=1,000.
It was also mentioned that he would receive twice his daily rate if he works during a holiday.
This means that he will get an additional pay of ₱1,000 for each holiday; so for the 2 holidays, his pay
can be computed as follows:
Extra Pay for the 2 Holidays=2(1,000)=2,000.
His commission that month is 12% of his total sales of ₱30,000; that is,
Commission=(0.12)(30,000)=3,600.
His total gross earnings can be computed by adding his salary, his extra pay for the 2 holidays,
and his commission; that is,
Gross Earnings=22,000+2,000+3,600=27,600.
Therefore, the amount of his gross earnings that month is ₱27,600.
By law, employers are required to withhold taxes and other legal deductions from their employees'
salaries and to forward these to the concerned government agencies. Earlier we defined net earnings
as the resulting amount after the deductions are applied on the gross earnings. The formula for
computing the net earnings is stated below.
Formula for Calculating Net Earnings:

The net earnings (N) can be determined by subtracting the total legal deductions (d)
from the gross earnings (G). In symbols,
N=G−d
Example 7: Employee has a monthly salary of ₱10,000. His legal deductions are the following: ₱363
for the SSS premium, ₱125 for PhilHealth, ₱200 for Pag-IBIG fund, and ₱500 for the income tax. How
much is his net earnings in a month?
Solution: The total deductions (d) can be computed by adding the following amounts: ₱363 for SSS,
₱125 for PhilHealth, ₱200 for Pag-IBIG, and ₱500 for the income tax. So, we have:
d=363+125+200+500=1,188.
The amount of his gross earnings (G) is given as ₱10,000. So, the net earnings can be
computed as follows:
N=G−d=10,000 – 1,188=8,812.
Therefore, the employee's net earnings is ₱8,812.
Example 8: Pilong works as a call center agent. After his employer deducted ₱726 for his SSS
premium, ₱250 for PhilHealth, ₱400 for Pag-IBIG, and ₱1,000 for his income tax, he received an
amount of ₱17,624 as net earnings. How much is his monthly gross earnings?
Solution: We are asked to determine the monthly gross earnings of Pilong. The amounts of his
deductions were given in the problem: ₱726 for SSS, ₱250 for PhilHealth, ₱400 for Pag-IBIG, and
₱1,000 for his income tax. So, the total deductions (d) can be computed as follows:
d=726+250+ 400+1,000=2,376.
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It was also given that the amount of his net earnings (V) was ₱17,624. So, from the formula for
net earnings (N = G - d), we can derive the following formula for G, and then substitute the known
values of N and d; that is,
G=N + d=17,624+ 2,376=20,000.
Therefore, Pilong's monthly gross earnings is ₱20,000.
C. Taxable and Nontaxable Compensation and Benefits
When wage earners are paid on an hourly basis and when they work for different numbers of hours
every day, they also receive different daily wages. A disadvantage in this kind of working arrangement
is that there may be cases when wage earners would not have a stable income. To protect the welfare
of wage earners, the government, particularly the Department of Labor and Employment (DOLE),
ensures that appropriate labor and employment laws and policies are formulated and consistently
implemented.
Below are the basic Philippine labor laws and regulations, specifically those that are related to the
compensation and benefits of wage earners.
C.1. Minimum Wage

 Every Filipino wage earner should at least earn the minimum wage in his or her region.
 Republic Act 6727 or the Wage Rationalization Act states the required minimum wage per
region, province, and industry. The following table presents the daily minimum wage rates (in
Philippine pesos) in the different regions, as of March 2022:
REGION Minimum Wage Rate (PHP)

NCR 500.00 - 537.00
CAR 340.00 - 350.00
REGION I 282.00 - 340.00
REGION II 345.00 - 370.00
REGION III 304.00 - 420.00
REGION IV-A 303.00 - 400.00
REGION IV-B 294.00 - 320.00
REGION V 310.00
REGION VI 310.00 - 395.00
REGION VII 351.00 - 404.00
REGION VIII 295.00 - 325.00
REGION IX 303.00 - 316.00
REGION X 331.00 - 365.00
REGION XI 381.00 - 396.00
REGION XII 315.00 - 336.00
REGION XIII 320.00
BARMM 290.00 - 325.00
Source: National Wages and Productivity Commission
C.2. Overtime Pay During Regular Working Days

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 Every Filipino wage earner should be paid an overtime pay for the extra working hours that he
or she renders.
 The Philippine Labor Code requires that the maximum number of working hours per day should
be 8 hours. If a wage earner performs work beyond 8 hours, he or she is already working
overtime. For every hour in 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 or her hourly wage.
Example 9: During a mall sale, Among, who is working as a bagger, rendered 4 hours more than his
required working hours. If he is paid P50.50 an hour, how much is his overtime pay?
Solution: The overtime pay per hour should be equal to 125% of an employee’s hourly wage. Thus,
Amlong, overtime pay per hour is
( 1.25 ) ( 50.50 )=63.125
Since Amlong rendered 4 extra hours, his total overtime pay is
( 4 ) ( 63.125 )=252.50
C.3. Premium Pay During Rest Days and Special Holidays

 Every Filipino wage earner is entitled to a premium pay for performing work during nonworking
days such as rest days and special holidays.
 A premium pay refers to the additional compensation required by law for work performed within
8 hours on nonworking days such as scheduled rest days and special holidays.
 The Labor Code requires at least one (1) rest day per week for all wage earners. Hence, every
week, the maximum number of working days should be 6 days. There are also three (3)
identified special holidays in the Philippines-Ninoy Aquino Day, All Saints Day, and the last day
of the year. Wage earners are not entitled to any compensation if they do not work on these
days. But if they work during such days, they are entitled to a premium pay based on the
following rates:
1. If a wage earner performs work on his or her scheduled rest day (for example, Sunday) or
on a special holiday, he or she is entitled to a premium pay that is equivalent to his or her
regular daily wage plus at least 30% of his or her daily wage.
2. If a wage earner performs work on a special holiday that falls on his or her scheduled rest
day, he or she is entitled to a premium pay that is equivalent to his or her regular daily wage
plus at least 50% of his or her daily wage.
Example 10: Amlong works as a manager in a certain company and earns a daily wage of ₱875. On
one of his rest days, the company needs his service.
1. How much will be his premium pay if he works during his rest day?
2. Suppose his rest day falls on All Saints Day and he needs to work. How much will be his premium
pay?
Solution:
1. If Amlong works on his rest day, he is entitled to an additional compensation of 30% of his daily
wage. It was given that his daily wage is ₱875. Hence, his additional compensation is
30 % of 875=0.3 (875)=262.50 .
Therefore, his premium pay on his rest day is

875+262.50=1,137.50 .
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2. If his rest day falls on All Saints Day, which is a special holiday, and he needs to work on that day,
then his premium pay is 50% higher that his basic daily wage. So, we get first the 50% of his daily rate;
that is,
50 % of 875=0.5 (875)=437.50
To get the premium pay, we get the total amount of his additional pay and his daily wage; that
is,
437.50 +875=1.312 .50 .
Therefore, his premium pay on that day is ₱1,312.50.
C.4. Premium Pay During Regular Holidays

 Every Filipino wage earner is entitled to a holiday pay for performing work on nonworking
regular holidays.
 Unlike in the case of special holidays for which wage earners are not compensated if they do
not work, during regular holidays they receive their basic wage even if they do not work. In the
Philippines, there are 12 regular holidays, as stated in the Republic Act 9849. These are the
following:
 New Year's Day  National Heroes' Day

 Mandy Thursday  Eid ul Fitr
 Good Friday  Eid ul Adha
 Araw ng Kagitingan  Bonifacio Day
 Labor Day  Christmas Day
 Independence Day  Rizal Day
A holiday pay refers to the additional compensation required by law for work performed within 8
hours on nonworking regular holidays. The following are the holiday pay rates:
 If a wage earner performs work on a regular holiday, he or she is entitled to a holiday pay that is
equivalent to at least twice his regular daily wage.
 If a wage earner performs work on a regular holiday that falls on his or her scheduled rest day,
he or she is entitled to the holiday pay rate (which is twice or 200% of his regular daily wage)
plus at least 30% of his or her holiday pay rate.
Example 11: Suppose the daily wage of Amlong is P620. Compute his holiday pay if he:
1. did not work on a regular holiday;
2. worked on a regular holiday; and
3. worked on a regular holiday which happens to be his rest day.
Solution:
1. Since it is a regular holiday, Amlong will still receive his daily wage of ₱620 even if he did not
work on that day.
2. If Amlong worked on a regular holiday, then his holiday pay should be at least twice of his
basic wage; that is,
2(620)=1,240.
3. If Amlong worked on a regular holiday which happens to be his rest day, then he will receive
an amount that is 30% higher than his regular holiday pay rate. His additional compensation is
computed as follows:
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30 % of 1,240=(0.3)1,240 ¿=372.
Hence, his total pay is:
1,240+372=1,612.
C.5. Night Shift Differential

 Every Filipino wage earner is entitled a night shift differential for performing work between 10
PM to 6 AM.
 A night shift differential is the additional compensation given to an employee who works
during the abovementioned condition. For work performed between the given times, the
employee receives a night shift differential that is equivalent to at least 10% of his regular daily
wage. The night shift differential is given in order to encourage employees to work during this
less preferred work shift.
Example 12: A call center agent works 8 hours a day and earns a daily wage of ₱750. If he needs to
work on a night shift (that is, 10 PM to 6 AM) for 5 days in a certain month, how much will he earn for
that month? Assume that there are 22 working days in a month.
Solution: His monthly basic salary is computed as follows:
22(750)=16,500.
If he works on a night shift for 5 days, then he is entitled to an additional payment of 10% of his
daily wage for 5 days; that is,
5(0.10)(750)=375
Thus, he receives a night shift differential of P375.
To find his gross earnings in a month, we add his basic monthly salary and the night shift
differential; that is,
16.500+375=16,875
Therefore, his gross earnings for that month is ₱16,875.
C.6. Service Charge

 A wage earner in a company that collects service fees from its clients is entitled to a service
charge.
 A service charge is the amount that hotels, restaurants, and similar establishments receive
from their clients as payment for performing certain services. The Labor Code states that such
service charges shall be distributed at a rate of 85% for all covered employees and 5% for the
management. The share of the employees shall be equally distributed among them. Also, in
cases when the service charge is abolished for any reason, the share of the covered employees
should be integrated in their wages.
Example 13: An auto mechanic was asked to change the oil and tune up Mr. Brent Gustafson's truck.
After finishing the work, Mr. Gustafson paid ₱800 for the service charge. If the shop has 16 employees,
how much of the service charge will the mechanic receive?
Solution: It was given that the service charge is ₱800. To get the employees' total share, we need to
compute for 85% of the service charge; that is,
85 % of 800=(0.85)(800)=680.
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Since the result is the total share of the employees, we need to divide it by the number of
employees (which is 16) to get each employee's share; that is,
680 ÷ 16=42.50 .
Therefore, the mechanic will receive ₱42.50 from the total service charge.
C.7. Service Incentive Leave

 Every Filipino wage earner who has rendered at least one year of service is entitled to a service
incentive leave of 5 days with pay.
 A service incentive leave may be either a sick leave or a vacation leave. If the service
incentive leave is not used at the end of the year, it can be converted into cash by applying the
daily wage rate of the employee. One year of service means a service within 12 months,
whether continuous or broken, reckoned from the date the employee started working.
C.8. Maternity, Paternity, and Parental Leaves

 Eligible wage earners can avail of maternity, paternity, and parental leaves with pay.
 A female wage earner is entitled to a maternity leave benefit equivalent to 100% of her current
wage for 60 days in case of normal delivery, or for 78 days in case of caesarean delivery, for up
to four pregnancies. The full payment shall be advanced by the employer within 30 days from
the filing of the maternity leave application and the amount will be reimbursed by SSS to the
employer upon completion of all required documents. The maternity leave benefit is explained in
detail in the Labor Code of the Philippines.
 A male wage earner is entitled to a paternity leave benefit of 7 days for each of the first four
deliveries of his legitimate spouse. Unlike a maternity leave, a paternity leave is paid by the
employer and is not reimbursed by the SSS. The paternity leave benefit is one of the provisions
in the Paternity Leave Act.
 A parental leave benefit of 7 days is also granted to solo-parent wage earners to enable them to
perform parental 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, whether continuous or broken, for the same employer. This benefit is explained more
thoroughly in the Solo Parent's Welfare Act.
C.9. 13th Month Pay

 Every Filipino wage earner is entitled to a 13th month pay, provided that he or she worked for at
least one month during a calendar year.
 The 13th month pay is a form of monetary benefit equivalent to the monthly basic salary of an
employee or at least one-twelfth of his annual basic salary. It is computed on a prorated basis
according to the number of months within a year that the employee has rendered service for the
employer. It is usually given by employers before December 24 of every year.
Example 14: Amlong is a cashier in a department store. Below is a summary of his basic salary each
month in one year
Month Basic Salary
January ₱9,000
February ₱9,200
March ₱8,800
April ₱9,300
May ₱9,000
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June ₱9,100
July ₱9,000
August ₱8,800
September ₱9,300
October ₱9,200
November ₱9,000
December ₱9,000
Total ₱108,700
How much is Amlong’s 13th month pay?
Solution: It was given that Amlong's annual basic salary is ₱108,700. This amount can also be
obtained by adding all of his basic monthly salaries in one year.
Recall that the 13th month pay must be at least one-twelfth of an employee's annual basic
1
salary: Thus, we compute of ₱108,700; that is,
12
1
(108,700)≈ 9,058 , 33
12
Hence, Amlong will receive a 13th month pay of at least ₱9,058.33.
C.10. Separation Pay

 Filipino wage earners who are validly dismissed from a company for causes other than serious
misconduct are entitled to a separation pay.
 The Labor Code has enumerated the following instances during which a separation pay must be
paid to a dismissed employee, including the corresponding separation pay rate:
Cause of Dismissal Separation Pay Rate
1.Automation or installation of labor-saving At least one-month pay, or at least one-month
devices pay for every year of service, whichever is
2.Redundancy higher
3.Retrenchment
One-month pay or at least half-month pay for
4.Closure or cessation of operation of the
every year of service, whichever is higher
establishment
Other specific provisions and requirements regarding the dismissal of employees and the
granting of separation pay are stated in the Labor Code.
C.11. Retirement Pay

 Upon reaching the retirement age, every eligible Filipino wage earner is entitled to a retirement
pay.
 Under the Labor Code, the retirement pay is equivalent to at least half-month salary for every
year of service. A fraction of at least 6 months is considered as one whole year.
 The retirement age is established in employment contracts or in any agreement between
employees and their employer. in the 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. An age of 60 or more, but below 65, is considered as the
voluntary retirement age. An age of 65 is considered as the compulsory retirement age. Other
10
specific provisions regarding retirement and the granting of retirement pay are explained in the
Labor Code.
Certain benefits of employees are relatively small in value and are not taxable. In this part of the
lesson, we will distinguish between nontaxable and taxable benefits.
Based on the tax code, the following benefits are excluded from the computation of gross income,
provided that the amount remains below P 82,000:
 13th month pay;
 Christmas bonuses;
 productivity and incentive bonuses; and
 other benefits of the same nature in cash or in kind.
All of the abovementioned benefits are nontaxable benefits. In addition to these benefits,
compensations of small value, which are called de minimis benefits, are also excluded from the
computation of gross income. The following are some examples of de minimis benefits, all of which are
nontaxable, as identified by the Bureau of Internal Revenue (BIR):
1. monetized unused vacation leave credits of employees not exceeding 10 days during the year;
2. monetized value of vacation and sick leave credits paid to government officials and employees;
3. medical cash allowance to dependents of employees, not exceeding ₱750 per employee per
semester or ₱125 per month;
4. rice subsidy of ₱1,500 or one sack of 50 kg of rice per month amounting to not more than
₱1,500;
5. uniform and clothing allowance not exceeding ₱5,000 per annum;
6. actual medical assistance, e.g., medical allowance to cover medical and healthcare needs,
annual medical/executive checkup, maternity assistance, and routine consultations, not exceeding
₱10,000 per annum;
7. laundry allowance not exceeding ₱300 per month;
8. employees' achievement awards, which must be in the form of a tangible personal property other
than cash or gift certificate, with an annual monetary value not exceeding ₱10,000;
9. gifts given during Christmas and major anniversary celebrations not exceeding ₱5,000 per
employee per annum; and
10. daily meal allowance for overtime work and night or graveyard shift not exceeding 25% of the
basic minimum wage on a per-region basis.
For tax computation purposes, all other benefits that are not included in the given list are subject to
applicable taxes; hence, they are taxable benefits. A common example of a taxable benefit is the
housing or car benefits that are given to eligible employees of a company. In general, all benefits and
allowances that are above the stated ceiling amount are taxable and any excess on the stated
maximum amounts for de minimis benefits will also be subjected to applicable taxes.
10
.Life Performance Outcomes:
 Courageous, Resourceful Explorers & Problem Solver
 Credible, Responsive Communicators & Team Players

 Search voluntarily beyond readily available sources of information, resources, and standard
techniques to generate new understandings towards workable solutions to existing problems.
 Consistently seek feedback from informed, credible individuals on the accuracy, clarity,
authenticity, and tone of their communications and practice revising and restating them until
they are well received.
Content Standard:
salaries and wages.

 Enumerate the standard deductions with the corresponding computation
 Identify the variables needed in the computation of the overtime
 Compute overtime pay
Read this!
A. Standard Deductions
Standard deductions are mandatorily applied on the gross earnings of an employee. The standard
deductions include the following:
 Social Security System contribution for employees in the private sector;
 Government Service Insurance System contribution for employees in the public sector;
 PhilHealth contribution for all employees;
 Home Development Mutual Fund or Pag-IBIG contribution for all employees; and
 withholding tax for all employees.
We limit our discussion on the computations of standard deductions from the gross earnings of
employees working in private sectors.
A.1. Social Security System (SSS) Contribution

 By law, private sector employees must be covered under the SSS. Based on each employee's
gross monthly pay, both the employer and employee remit monthly contributions to the SSS. In
10
turn, the employer receives the following benefits from the SSS: maternity, retirement, sickness,
disability, death, and pension benefits. In principle, the contributions that an employee remits
are his or her savings, which will serve as basis for the granting of the mentioned social security
benefits in times of contingencies.
SSS CONTRIBUTION SCHEDULE FOR REGULAR EMPLOYERS AND EMPLOYEES
Source: www.sss.gov.ph/Contribution-Schedule
Take note of the following meanings of the codes used in the table:
EE: employee's share; ER: employer's share;
10
To determine the monthly SSS contribution of an employee, we simply look for the range where his
or her basic salary falls. Then find the corresponding value under the TOTAL (EE) column. For
instance, an employee with a basic monthly salary of ₱12,000 belongs in the range 11,750-12,249.99.
Therefore, his or her corresponding monthly SSS contribution is ₱540.00.
Example 1: Amlong earns a monthly basic salary of ₱12,500. How much is his SSS contribution in a
month?
Solution: From the table, Amlong's basic salary falls within the range 12,250-12,749.99; thus, his
monthly SSS contribution is ₱562.50.
A.2. Philippine Health Insurance Corporation (PhilHealth) Contribution

 For all employees covered by the SSS, a medical benefit is also mandatorily given. This is
where the employees' PhilHealth contributions are used. The government mandates that both
the employer and the employee should contribute equal monthly premiums to PhilHealth. The
PhilHealth's program, which is also affiliated with the Department of Health, aims to provide
healthcare and hospitalization benefits to employees.
The next table shows the different ranges of compensation of employees with the corresponding
monthly PhilHealth contributions.
PhilHealth Premium Contribution Table 2023
Salary Bracket Monthly Basic Salary Premium Rate Monthly Premium
1 ₱10,000.00 450
2 ₱10,000.01 to ₱79,999.99 4.5% 450 to 4,050
3 ₱80,000.00 4,050
Note: Monthly premium contribution payments of employees with formal employment are equally
shared by the employee and employer.
To determine an employee's monthly PhilHealth contribution, we need to find the salary bracket or
range in which his or her monthly salary falls. For example, suppose an employee is earning P10,000
monthly. If we look at the table above, his monthly salary falls within the range of 10,000, which is
salary bracket 1. For this salary bracket, the corresponding value under the "Monthly Premium" column
is 400. Since monthly premium contribution payment are equally shared by the employee and
employer, this means that an amount of ₱200 will be his or her monthly PhilHealth contribution.
Example 2: If Amlong is earning ₱12,000 monthly, how much is his monthly PhilHealth contribution?
Solution: From the table, Amlong's basic salary falls within the range 10,000.01 to 79,999.99; in order
for us to determine the monthly premium rate we need to multiply it to 4%,
( 12,000 ) ( 0.04 )=480
The corresponding monthly premium for his salary bracket is ₱480.00. Since monthly premium
contribution payment are equally shared by the employee and employer, this means that an amount of
₱240 will be his or her monthly PhilHealth contribution.
A.3. Home Development Mutual Fund (HDMF) or Pagtutulungan sa Kinabukasan: Ikaw, Bangko,
Industriya at Gobyerno (Pag-IBIG) Contribution
10
 The HDMF, which is also known as the Pag-IBIG Fund, is mandatory to all employees who are
covered by the Government Service Insurance System or GSIS (for government employees) or
by the SSS (for employees in the private sector). The HDMF establishes a national savings
program and an affordable house financing system for Filipino employees. The following are the
benefits that the HDMF members are entitled to: (1) savings; (2) short- term loans; and (3)
access to low-cost housing programs. Both the employees and the employers contribute
monthly premiums to the fund. We use the following formula to determine the monthly Pag-IBIG
contribution of an employee:
Formula for Calculating the Monthly Pag-IBIG Contribution:

If S is the sum of an employee’s monthly basic salary, and r is the Pag-IBIG contribution rate,
then the amount of his or her contribution C is
C=r ∙ S
To determine the employee’s contribution rate r, we use the following table as reference:
Pag-IBIG Contribution Table for 2023
MONTHLY COMPENSATION CONTRIBUTION RATE
Basic Salary Employer Employee Total
₱1,499 and below 1% 2% 3%
₱1,500.00 to ₱4,999.00 2% 2% 4%
Over ₱5,000.00 3% 3% 6%
Example 3: If Amlong earns ₱12,000 monthly, how much is his monthly Pag-IBIG contribution?
Solution: It was given that Amlong earns ₱12,000 monthly, which is over ₱5,000. Based on the Pag-
IBIG Contribution Table, his contribution rate (r) is 3% (we can see this under the "Employee" column).
Thus, his monthly Pag-IBIG contribution (C) is obtained by taking 3% of his monthly basic salary (S);
that is,
C=rS=(0.03)(12,000)=360.
Therefore, his monthly Pag-IBIG contribution is ₱360.
A.4. Withholding Tax

 Withholding tax is the money an employer deducts from an employee's gross wages and pays
directly to the government. The amount withheld is a credit against the income taxes the
employee must pay during the year.
REVISED WITHHOLDING TAX TABLE
Effective January 1, 2018 to December 31, 2022
DAILY 1 2 3 4 5 6
Compensation P685 and P685 - P1,096 - P2,192 - P5,479 - P21,918 and
Range below P1,095 P2,191 P5,478 P21,917 above
P82.19 P356.16 P1,342.47
Prescribed 0.00 +20% P6,602.74 +35%
0.00 +25% over +30% over +32% over
Withholding Tax over P685 over P21,918
P1,096 P2,192 P5,479
WEEKLY 1 2 3 4 5 6
Compensation P4,808 and P4,808 - P7,692 - P15,385 - P38,462 - P153,846 and
Range below P7,691 P15,384 P38,461 P153,845 above
10
P576.92 P2,500.00 P9,423.08 P46,346.15
Prescribed 0.00 +20%
0.00 +25% over +30% over +32% over +35% over
Withholding Tax over P4,808
p7,692 p15,385 P38,462 P153,846
SEMI-MONTHLY 1 2 3 4 5 6
Compensation P10,417 P10,417 - P16,667 - P33,333 - P83,333 - P333,333 and
Range and below P16,666 P33,332 P83,332 P333,332 above
P1,250.00 P5,416.67 P20,416.67 P100,416.67
P16,667 P33,333 P83,333 P333,333
MONTHLY 1 2 3 4 5 6
Compensation P20,833 P20,833 - P33,333 - P66,667 - P166,667 - P666,667 and
Range and below P33,332 P66,666 P166,666 P666,666 above
P2,500.00 P10,833.33 P40,833.33 P200,833.33
33,333 P66,667 P166,667 P666,667
B. Overtime Pay
B.1. Overtime Pay on a Regular Working Day

 For every hour in excess of 8 hours in a day, the hourly overtime rate is equivalent to at least
125% of the regular hourly rate, as shown in the following formula:
Formula for Calculating the Overtime Pay on a Regular Working Day:

If H, is the regular hourly rate, then the hourly overtime rate (O) is
O=H .+(0.25)(H .)=1.25 H
Example 4: Along rendered 4 hours more than his required working hours during a mall sale. If he is
paid ₱320 per day, how much are his overtime pay and total earnings that day? Assume that Amlong is
required to work 8 hours a day.
Solution: Amlong earns ₱320 per day; so, his regular hourly rate is:
320
Hr= =40
8
His hourly overtime rate is computed as follows:
O=1.25 H ,=1.25 (40)=50
So, his overtime pay for 4 hours is:
4 (50)=200.
It follows that his total earnings for that day is:
320+200=520.
The answer is ₱520.
B.2. Overtime Pay on a Rest Day or Special Holiday

 we called the additional compensation on a rest day or special holiday as a premium pay;
hence, essentially a premium pay is also an overtime pay. If an employee performs work on his
or her scheduled rest day or on a special holiday, he or she is entitled to an hourly overtime rate
10
that is equivalent to his or her regular hourly rate plus at least 30% of his or her regular hourly
rate. Moreover, the Labor Code states that when an employee performs work beyond 8 hours
on a rest day or a special holiday, he or she shall be paid an additional compensation equivalent
to the rate of the first 8 hours on a special holiday or rest day plus at least 30% thereof. The
following formula is used to calculate the overtime pay in this particular case:
Formula for Calculating the Overtime Pay on a Rest Day or Special Holiday:
If Hr is the regular hourly rate, then the hourly overtime rate (O) is
O=H r +30 %( H r )=1.3 H r
Note that the overtime rate for every hour in excess of 8 hours (which we denote as O') on a
rest day or special holiday can be computed using the hourly overtime rate in the formula above (1.3H r)
as the base hourly rate; that is,
O '=1.3 H r + 30 %(H r)=1.69 H r
Example 5: If Amlong’s hourly rate is ₱40 and he worked for a total of 10 hours on his rest day, how
much is his overtime pay?
Solution: It was given that Amlong's regular hourly rate (H r) is ₱40 and that he worked on his rest day
for 10 hours (which is more than 8 hours). So, for the first 8 hours, his hourly overtime rate is computed
as follows:
O=1.3 H r =1.3 ( 40 )=52
Using this hourly overtime rate, his overtime pay for the first 8 hours is:
8(52)=416
The number of hours in excess of the regular working hours is 2 hours (that is, 10 - 8 = 2). His
hourly overtime rate for the excess hours is:
O '=1.69 H r =1.69(40)=67.60 .
Using this hourly overtime rate, his overtime pay for the additional 2 hours is:
2(67.60)=135.20 .
His total overtime pay for 10 hours is computed as follows:
416 +135.20=551.20 .
Therefore, his total overtime pay is ₱551.20.
B.3. Overtime Pay on a Special Holiday That Falls on a Rest Day

 If an employee performs work on a special holiday that falls on his or her rest day, he or she is
entitled to an hourly overtime rate that is equivalent to his or her regular hourly rate plus at least
50% of his or her regular hourly rate. Moreover, when an employee performs work beyond 8
hours, he or she shall be paid an additional compensation equivalent to the rate of the first 8
hours on a special holiday that falls on a rest day plus at least 30% thereof. These computations
are summarized in the following formulas:
Formula for Calculating the Overtime Pay on a Special Holiday That Falls on a Rest Day:
O=H r +50 %( H r )=1.5 H r
10
Note that the overtime rate for every hour in excess of 8 hours (which we denote as O') in this
particular case can be computed using the hourly overtime rate in the formula above (1.5H r) as the
base hourly rate; that is,
O '=1.5 H r + 30 %(1.5 H r )=1.95 H r
Example 6: Amlong's regular hourly rate is ₱40. Suppose he needed to work on his rest day, which
also happened to be Chinese New Year. On that day, he worked for 6 hours more than the regular
working hours. How much is his overtime pay?
Solution: It was given that Amlong's regular hourly rate (Hr) is ₱40 and that he worked on his rest day,
which was also a special holiday. So, for the first 8 hours, his hourly overtime rate is computed as
follows:
O=1.5 H r =1.5(40)=60.
8(60)=480.
It was also mentioned that he worked for 6 hours more than the regular working hours. His
hourly overtime rate for the additional hours is:
O '=1.95 H r =1.95(40)=78.
6 (78)=468.
His total overtime pay is computed as follows:
480 +468=948.
Therefore, his total overtime pay is ₱948.
B.4. Overtime Pay on a Regular Holiday

 We referred to the additional compensation on a regular holiday as a holiday pay; thus,
essentially a holiday pay is also an overtime pay. If an employee performs work on a regular
holiday, he or she is entitled to an hourly overtime rate that is equivalent to at least twice (or
200%) of his regular hourly rate. In addition, when an employee performs work beyond 8 hours
on a regular holiday, he or she shall be paid an additional compensation equivalent to the rate
of the first 8 hours on a regular holiday plus at least 30% thereof. The following formula is used
to calculate the overtime pay in this particular case:
Formula for Calculating the Overtime Pay on a Regular Holiday:

O=200 %(H r )=2 H r
Note that the overtime rate for every hour in excess of 8 hours (which we denote as O') on a
regular holiday will be computed using the hourly overtime rate in the formula above (2H r) as the base
hourly rate; that is,
O '=2 H r +30 %(2 H r )=2.6 H r
Example 7: Amlong needed to work for a total of 12 hours on Bonifacio Day. How much was his total
earnings that day if his regular hourly rate is ₱40?
Solution: It was given that Amlong's regular hourly rate (Hr) is ₱40 and that he worked on a regular
holiday. For the first 8 hours, his hourly overtime rate is computed as follows:
O=2 H=2(40)=80.
10
8(80)=640.
hourly overtime rate for the additional hours is;
O '=2.6 H r=2.6 (40)=104.
Using this hourly overtime rate, his overtime pay for the additional 4 hours is;
4 (104)=416.
His total overtime pay for 12 hours is computed as follows:
640+ 416=1.056 .
Therefore, his total overtime pay is ₱1,056.
B.5. Overtime Pay on a Regular Holiday That Falls on a Rest Day

 If an employee performs work on a regular holiday that falls on his or her rest day, he or she is
entitled to an hourly overtime rate that is equivalent to his or her holiday pay rate which is 200%
of his regular hourly rate) plus at least 30% of his or her holiday pay rate. Moreover, when an
employee performs work beyond 8 hours, he or she shall be paid an additional compensation
equivalent to the rate of the first 8 hours on a regular holiday that falls on a rest day plus at least
30% thereof. These are summarized in the following formula:
Formula for Calculating the Overtime Pay on a Regular Holiday That Falls on a Rest Day:
O=2 H r +30 % ( 2 H r )=2.6 H r
Note that the overtime rate for every hour in excess of 8 hours (which we denote as O') in this
particular case will be computed using the hourly overtime rate in the formula above (2.6H r) as the base
hourly rate; that is,
O '=2 .6 H r +30 %(2.6 H r )=3.38 H r
Example 8: Amlong's rest day falls on Independence Day. He needed to work for 10 hours on that
particular day. How much was his overtime pay if his regular hourly rate is ₱40?
Solution: Amlong's regular hourly rate (Hr) is ₱40. It was also given that he worked on his rest day,
which was also a regular holiday. So, for the first 8 hours, his hourly overtime rate is computed as
follows:
O=2.6 H =2.6(40)=104.
8(104)=832.
hourly overtime rate for the additional hours is:
O '=3.38 H r =3.38(40)=135.20 .
2 ( 135.20 )=270.40
His total overtime pay is computed as follows:
832+270.40=1,102.40
Therefore, his total overtime pay is ₱1,102.40.
10
References:
APA Format
Mariano, M. (2016). Business Mathematics. Rex Book Store, Inc.
Bacani, J., et. al. (2017). Business Mathematics for Senior High School. Curriculum Compliant.
Garces, I., et. al. (2016). Business Math. Vibal Group Inc.
Answer this!
Name: ______________________________ Grade and Section: ____________________
Activity Worksheet 1
Most Essential Learning Competencies 1: Illustrate the different types of commissions.

Instruction: Multiple Choice. Read and understand carefully the test items. Encircle only the letter of
the correct answer.
Understanding. Tell whether the given problem involves straight commission, salary plus commission,
or graduated commission.
1. A real estate agent has a commission rate of 4%. If a piece of property sells for ₱740,000, what is his
commission?
A. Straight Commission B. Salary Plus Commission C. Graduated Commission
2. Gabriel works on commission basis and receives 3.8% on his monthly sales for St. Peter Life Plan
without a base salary. What is his commission and total pay during a month when he sells 15 units of
Life Plan worth ₱200,000 per unit, if within the same month two (2) customers with each unit cancelled
the deal?
3. Evelyn de Guzman sells OHP projectors for WSS Tech Products. She is on incremental commission
schedule of 2.5% of sales up to ₱100,000, 3% for the next P150,000 and 4% on the sales greater than
₱250,000. What is Evelyn's total gross pay for last month if her sales volume was ₱300,000?
4. Emmanuel is paid a base salary of ₱18,000 per month and a commission of 6% on sales over
₱1,700,000 each month. This month his sales totaled ₱1,546,000. What were his earnings?
5. During a month's time, an appliance salesman receives 3% commission on the first ₱80,000, 4%
commission on the next ₱80,000 in sales, and 5% commission on anything over ₱160,000. What is his
commission on ₱250,000 in sales?
6. Jayney dela Fuente works on a pay schedule of ₱21,300 per month plus a 3% commission on all
sales. If she sold ₱104,900 last month, what is Jayney’s total gross pay?
10
Most Essential Learning Competencies 1: Compute commissions on cash basis and solve problems
involving commissions.
Instruction: Multiple Choice. Read and understand carefully the test items. Encircle the letter of the
correct answer. Be sure to SOLVE the items from 7-15 and SHOW your SOLUTION.
7-9. Gabriel works on commission basis and receives 3.8% on his monthly sales for St. Peter Life Plan
without a base salary. What is his commission and total pay during a month when he sells 15 units of
Life Plan worth ₱200,000 per unit, if within the same month two (2) customers with each unit cancelled
the deal?
A. 98,800 B. 98,900 C. 99,800 D. 99,900
B.
SOLUTION:
C.
D.
E.
F.
G.
H.
I.
10-12. Jayney dela Fuente works on a pay schedule of ₱21,300 per month plus a 3% commission on
all sales. If she sold ₱104,900 last month, what is Jayney’s total gross pay?
A. 24,447 B. 16,400 C. 10,100 D. 21,300
B.
SOLUTION:
C.
D.
E.
F.
G.
H.
I.
13-15. Evelyn de Guzman sells OHP projectors for WSS Tech Products. She is on incremental
commission schedule of 2.5% of sales up to ₱100,000, 3% for the next P150,000 and 4% on the sales
greater than ₱250,000. What is Evelyn's total gross pay for last month if her sales volume was
₱300,000?
A. 6,000 B. 7,000 C. 8,000 D. 9,000
B.
SOLUTION:
C.
D.
E.
F.
G.
10
H.
I.
Answer this!
Most Essential Learning Competencies 1: Define salary, wage, income, benefits.

the correct answer.
1. It is a fixed regular amount, typically paid on a monthly or biweekly basis but often expressed as
annual sum, made by an employer to an employee.
A. Benefits B. Income C. Salary D. Wage
2. It is typically paid on a daily or weekly basis, made by an employer to an employee, especially to a
manual or unskilled worker.
3. it is a payment or gift made by an employer, the state, or an insurance company.
4. A bank teller has a monthly salary of P12,000. Her employer deducts P1,200 from her salary for her
contributions, how much is her net pay in a month?
A. 10,800 B. 12,000 C. 13,200 D. 1,200
Most Essential Learning Competencies 2: Compute gross and net earnings.

Instruction: Multiple Choice. Read and understand carefully the test items. Encircle the letter of the
correct answer. Be sure to SOLVE the items from 5-8 and SHOW your SOLUTION.
5-6. Maren was paid ₱76.30 per hour. Find her gross earnings for the week during which she worked
44 hours?
A. 9,500.50 B. 850.50 C. 10,351.10 D. 3,357.20
A.
SOLUTION:
B.
C.
D.
E.
F.
10
G.
H.
7-8. In RC Merchandise, all employees are deducted of SSS and Philhealth contributions. Romeo who
works as salesclerk earns P8,000 a month. If his SSS and PhilHealth contributions are P290.4 and
P100, respectively, how much is Romeo’s take home pay?
A. 7,609.60 B. 390.40 C. 8,390.40 D. 8,650.00
A.
SOLUTION:
B.
C.
D.
E.
F.
G.
H.
Most Essential Learning Competencies 3: Define each of the benefits given to wage earners.
Instruction: In your understanding, define each of the benefits given to wage earners for at least 2-3
words.
9-10. Minimum Wage
11-12. Holiday Pay
13-14. Overtime
15-16. Premium Pay
17-18. Night Shift Differential
19-20. Service Charge
21-22. Service Incentive Leave
23-24. Parental Leave
25-26. 13th Month Pay
27-28. Separation Pay
10
Most Essential Learning Competencies 4: Distinguish taxable from nontaxable benefits.
Instruction: Complete the table by comparing and contrasting taxable from nontaxable benefits.
Taxable Benefits Nontaxable Benefits
Answer this!
Most Essential Learning Competencies 1: Enumerate the standard deductions with the
corresponding computation.
the correct answer.
1. This is an insurance program for nongovernment employees that provide health and retirement
benefits to all wage earners in the Philippines.
A. SSS contributions B. PhilHealth contributions
C. GSIS contributions D. Pag-IBIG contributions
2. This is a government mandated program which is tax-exempt and is affiliated to the Department of
Health.
3. This contribution aims to provide national savings program and affordable housing finances for
Filipino workers.
Instruction: Compute the monthly SSS, Pag-IBIG, and PhilHealth contributions for each given monthly
salary:
Employee Monthly Contribution Payment
Basic Monthly Salary
SSS Pag-IBIG PhilHealth
₱15,000 4. 5. 6.
₱36,000 7. 8. 9.
Most Essential Learning Competencies 2: Identify the variables needed in the computation of the
overtime and compute overtime pay.
Instruction: Identify the variables needed in the computation of the overtime and compute for its
corresponding overtime pay.
10-15. Layla rendered 6 hours of work as an overtime. If she is paid 540 a day how much is her
overtime pay if she is required to work 8 hours a day?
10
A.
SOLUTION:
B.
C.
D.
E.
F.
G.
H.
Prepared by:
MR. RODERICK SAYOD

Subject Teacher
Checked by:
MR. REUBENJOY P. BUDEJAS

Subject Team Leader
Reviewed by:
MRS. MARY LOUIE E. GALAURA

High School Assistant Principal
Validated by:
MR. RICKY BOY E. LIMLINGAN

Basic Education Academic Services Supervisor
Approved by:
SR. EMELITA S. ALVAREZ, SPC

Principal
10

Module Business Mathematics 4th Quarter

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St.

Paul University Surigao

SENIOR HIGH SCHOOL

Essential Performance Outcomes:

Most Essential Learning Competencies:

Formula in Calculating the Commission:

There are three commonly known types of commission; namely,

Thus, the commission rate 7.5%

Although salespersons can expect to receive a fixed amount of salary in a salary-plus-commission

Thus, Peter received a total of ₱4,150 that week.

Thus, the total gross pay is ₱24,447.

Level pay =sales amount ∙ commission rate

Thus, her total gross pay is ₱9,000.

Essential Performance Outcomes:

Most Essential Learning Competencies:

Thus, Amlong’s monthly salary is ₱30,000.

Formula for Calculating the Total Wage:

Thus, her total income in a month is ₱9,800.

B. Gross and Net Earnings

Therefore, Pilong's gross earnings in a year is ₱312,000.

Therefore, the amount of his gross earnings that month is ₱27,600.

Formula for Calculating Net Earnings:

Therefore, the employee's net earnings is ₱8,812.

Therefore, Pilong's monthly gross earnings is ₱20,000.

C. Taxable and Nontaxable Compensation and Benefits

C.1. Minimum Wage

REGION Minimum Wage Rate (PHP)

C.2. Overtime Pay During Regular Working Days

C.3. Premium Pay During Rest Days and Special Holidays

Therefore, his premium pay on his rest day is

Therefore, his premium pay on that day is ₱1,312.50.

C.4. Premium Pay During Regular Holidays

 New Year's Day  National Heroes' Day

C.5. Night Shift Differential

Therefore, his gross earnings for that month is ₱16,875.

C.6. Service Charge

C.7. Service Incentive Leave

C.8. Maternity, Paternity, and Parental Leaves

C.9. 13th Month Pay

Hence, Amlong will receive a 13th month pay of at least ₱9,058.33.

C.10. Separation Pay

C.11. Retirement Pay

Essential Performance Outcomes:

Most Essential Learning Competencies:

A.1. Social Security System (SSS) Contribution

SSS CONTRIBUTION SCHEDULE FOR REGULAR EMPLOYERS AND EMPLOYEES

A.2. Philippine Health Insurance Corporation (PhilHealth) Contribution

Formula for Calculating the Monthly Pag-IBIG Contribution:

Therefore, his monthly Pag-IBIG contribution is ₱360.

A.4. Withholding Tax

B.1. Overtime Pay on a Regular Working Day

Formula for Calculating the Overtime Pay on a Regular Working Day:

O=H .+(0.25)(H .)=1.25 H

The answer is ₱520.

B.2. Overtime Pay on a Rest Day or Special Holiday

Therefore, his total overtime pay is ₱551.20.

B.3. Overtime Pay on a Special Holiday That Falls on a Rest Day

Therefore, his total overtime pay is ₱948.

B.4. Overtime Pay on a Regular Holiday

Formula for Calculating the Overtime Pay on a Regular Holiday: