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Salaries and Wages: Salary Is The Compensation Usually

This document discusses salaries, wages, incomes, benefits, and commissions. It defines salary as compensation quoted annually or monthly that is paid regularly even if hours worked vary, while wage is compensation quoted hourly or daily that varies with hours worked. Gross income refers to total earnings before deductions, while net income is what remains after deductions like taxes. Benefits provide additional compensation beyond basic salary. Commission pays salespeople a percentage of revenue generated from their sales.

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Julius Lita
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965 views7 pages

Salaries and Wages: Salary Is The Compensation Usually

This document discusses salaries, wages, incomes, benefits, and commissions. It defines salary as compensation quoted annually or monthly that is paid regularly even if hours worked vary, while wage is compensation quoted hourly or daily that varies with hours worked. Gross income refers to total earnings before deductions, while net income is what remains after deductions like taxes. Benefits provide additional compensation beyond basic salary. Commission pays salespeople a percentage of revenue generated from their sales.

Uploaded by

Julius Lita
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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SALARIES AND WAGES

Salary is the compensation usually


quoted annually or monthly for an
employee. Salary earners usually get
paid every 15 days (bi-monthly).
Salary earners are not paid less if
they work for only a fraction of the
required number of hours and they
are also not paid for working
overtime.

Wage, on the other hand, is


compensation quoted in an hourly or
daily rate for an employee. Wage
earners usually get paid either weekly
or sometimes even monthly, at their
employer's convenience. wage
earners are under the “no work, no
pay policy” which means they are
only paid the actual number of hours
or days that they worked.
SAMPLE PROBLEMS
1. A tutor who is paid PhP200 per
hour is earning a wage. How
much does he earn for a 10-hour
week work?
2. A university assistant professor is
usually given a monthly salary. If
his salary is PhP40,000 per
month, how much does he get
every two weeks?
3. A fast food service crew is paid
per hour. If he is paid an average
wage of PhP77.43 per hour, how
much will he get if he works for 6
hours and 6 days a week for 4
weeks?
4. A minimum wage earner in Metro
Manila is paid PhP481 for an 8-
hour workday. What is his hourly
wage?

LET’S TEST OUR MIND!


Read, analyze and solve the following
problem. Show your complete
solution.

1. A clerk earns a salary of


PhP20,000 per month. Assuming
that he works 8 hours a day for a
20-day work month, how much
does he get per day? per hour?

2. An employee is paid a monthly


salary of PhP16,000 for working
20 days in a month. A taxi driver
earns PhP750 per day. Assuming
both work 8 hours a day, who has
a higher hourly wage?
INCOMES AND BENEFITS

Income is money that an individual


receives in exchange for providing a
good/service or through investing
capital.
Benefit is employee compensation
given by an employer on top of the basic
salary/wage. Note that benefits may
come in the form of cash or in kind.
GROSS INCOME
The gross income of an individual
refers to the total amount he/she earned
before deductions are made. Other
adjustments may be payment for loans,
etc.
EXAMPLE:
A teacher who gets a basic monthly
salary of PhP20,000 and a living
allowance of PhP2,000 per month has an
annual gross income of (20,000 x 12) +
(2,000 x 12)=PhP264,000.

NET INCOME
The net income of an individual is the
difference between his/her gross income
and deductions. Example of deductions
applicable are income tax, SSS or GSIS
contributions, PhilHealth and Pag-ibig
contributions. The deductions can be a
fixed amount or a percentage of the
basic salary.
EXAMPLE:
A teacher who gets a basic monthly
salary of PhP20,000 and a living
allowance of PhP2,000 per month has an
annual gross income of
(20,000x12)+(2,000X12)=PhP264,000.
Suppose this teacher has to pay every
year PhP22,500 for income tax,
PhP4,500 for PhilHealth, PhP1,200 for
Pag-ibig and PhP6,975.60 for SSS
contributions, then his annual net
income is 264,000 –
(22,500+4,500+1,200+6,975.60)=
PhP228,824.40.
COMMISSION
A commission is a fee that a business
pays to a salesperson (agent) in exchange
for his services in either facilitating,
supervising, or completing a sale. The
commission may be based on a flat
arrangement or as a percentage of the
revenue generated by a salesperson. In
other words, commission (remuneration) is
a form of payment to an agent for services
rendered.

Three different types of commission:


1.Straight Commission, also called
(revenue commission) – a commission
based on a percentage of sales only. (This
is very profitable if you are selling high-
ticket items.)
2.Salary plus Commission – a
commission in which a salesperson gets his
basic salary and a percentage of whatever
sales he makes.
3.Graduated Commission – a
commission, which varies according to how
much sales, is made.

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