Senior High School

Specialized

Republic of the Philippines

Department of Education
Region I
SCHOOLS DIVISION OF ILOCOS NORTE

Business
Mathematics
Quarter 2 – Module 10:
Gross and Net Earnings

SDOIN_ Specialized_ABM_Q2_BusMath12_Module10
Business Mathematics
Crafting-Resources-for-Accessible-and-Flexible-Teaching (CRAFT)
Quarter 2 – Module 10: Gross and Net Earnings

First Edition, 2023

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Published by the Department of Education

Secretary: Sara Z. Duterte
Undersecretary: Gina O. Gonong

Development Team of the Module

Writers: Maryrose T. Vasquez

Editor: Glenn l. Garcia
Reviewers: Name
Illustrators: Name
Layout Artist: Name
Management Team: Donato D. Balderas
Joye D. Madalipay
Ursino C. Pascua
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Printed in the Philippines by ______________________________

Schools Division of Ilocos Norte
Office Address: Brgy. 7B, Giron Street, Laoag City, Ilocos Norte
Telefax: (077) 771-0960
Telephone No.: (077) 770-5963, (077) 600-2605
E-mail Address: [email protected]
 Business
Mathematics
Quarter 2 – Module 3:
Gross and Net Earnings

MELC:

 Define salary, wage, income, benefits.

(ABM_BMIISW-IIc-1)
 Compute gross and net earnings.
(ABM_BMIISW-IId-2)

Prepared by:

GLENN L. GARCIA MARYROSE T. VASQUEZ

SHS Teacher II SHS Teacher II
Marcos National High School Dingras National High School
Introductory Message
This Contextualized Learning Module (CLM) is prepared so that you, our
dear learners, can continue your studies and learn while at home. Activities,
questions, directions, exercises, and discussions are carefully stated for you to
understand each lesson with ease.
This CLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
Pre-test is provided to measure your prior knowledge on the lesson. This will
show you if you need to proceed in completing this module or if you need to ask
your facilitator or your teacher’s assistance for better understanding of the lesson.
At the end of this module, you need to answer the post-test to self-check your
learning. Answer keys are provided for all activities and tests. We trust that you
will be honest in using them.
In addition to the material in the main text, Notes to the Teacher is also
provided to our facilitators and parents for strategies and reminders on how they
can best help you in your home-based learning.
Please use this module with care. Do not put unnecessary marks on any
part of this CLM. Use a separate sheet of paper in answering the exercises and
tests. Likewise, read the instructions carefully before performing each task.
If you have any -question in using this CLM or any difficulty in answering
the tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.

1 SDOIN_ Specialized_ABM_Q2_BusMath12_Module10
 What I Need to Know

This module was designed and written with you in mind. It is here to help
you master the nature of Business Mathematics. The scope of this module permits
it to be used in many different learning situations. The language used recognizes
the diverse vocabulary level of students. The lessons are arranged to follow the
standard sequence of the course. But the order in which you read them can be
changed to correspond with the textbook you are now using.

The module is consist of one lesson only:

 Gross and net earnings

After going through this module, you are expected to:

 Define salary, wage, income, benefits. (ABM_BMIISW-IIc-1)
 Compute gross and net earnings. (ABM_BMIISW-IId-2)

What I Know

DIRECTIONS: On a separate sheet of paper, write the letter that corresponds to

your answer to the following questions.
1. How much is the bi-weekly salary of an employee earning a salary of
Php16,544.86 monthly? A. Php4,136.22 B. Php5,514.95 C.
Php8,272.43 D. Php11,029.9
2. An employee earns Php78,942.75 semi-annual salary. How much is
his weekly salary? A. Php1,644.64 B. Php3,289.28 C. Php6,678.56 D.
Php13,157.13
3. The pay plan of a piece of candy is Php1.05. Anna produced 550
pieces of candy. How much is her total earnings? A. Php225.00 B.
Php550.00 C. Php577.50 D. Php825.00
4. Grace has a total production of 239 pieces. What is her gross earning
if the piecerate plan is Php1 for less than 200 pieces and Php1.15 for
more than 200 pieces? A. Php200.00 B. Php239.00 C. Php250.95 D.
Php274.85
5. Which of the following is considered as employee benefit? A. Sick
Leave B. Holiday Pay C. 13th month pay D. All of the above 6

2 SDOIN_ Specialized_ABM_Q2_BusMath12_Module10
Lesson Gross and Net
1 Earnings
Have you ever overheard your parents discussing their earnings and wages?
Well, it's likely that the majority of them are constantly calculating how much
money was deducted from their salaries.

The money left over from your parents' pay is what they use to budget your
household expenses for bills and meals. As a result, it is vital to understand how
we compute this, identify the deductions made to them, and the significance of why
they must make those deductions.

What’s In

DIRECTIONS: Take your time reading the problem. Make a separate sheet of paper
for your responses to the questions below. Please do not make any notes on the
module.
Ms. Sarah chose to work for the Rainbow Company, where she will be paid
P4, 000 per week. Her employer told her that if she can sell LCD TVs worth more
than P6, 000, she will receive an additional 9% commission.
1. What kind of commission is shown in the problem?
2. If she was able to sell a TV worth P9, 500, how much is her
commission pay?
3. How much is her gross pay for that week?

What is New

DIRECTIONS: The letters below are jumbled. Identify and list the hidden
words on a different page of paper.
1. G E A W
2. A R Y L A S
3. M E C O I N
4. S T I F E N B E
5. E A R I N G S N

3 SDOIN_ Specialized_ABM_Q2_BusMath12_Module10
 What is It

In this lesson, we will apply the fundamental operations of mathematics to salaries

and wages. We will also learn to distinguish between salary, wage, income, and
benefits, as well as calculating gross and net earnings.

SALARY, WAGE, INCOME, AND BENEFIT

I. SALARY - A fixed regular payment, usually made monthly or
annually. Salary on an annual basis is sometimes translated to a
monthly basis, weekly to monthly, monthly to semi-monthly, and so
on. Thus, we must always remember the following:

1 year = 12 months = 24 semi-monthly = 6 bi-monthly

1 year = 52 weeks = 26 bi-weekly
1 month = 2 semi-monthly
2
Semi-monthly = every month
5
Bi-monthly = every two months
Bi-weekly = every two weeks
Let us study the following conversions, supposedly the annual salary is P154,500.
Annual Salary P 154,500
1. Monthly salary = = = P12,875
12 12

Annual Salary P 154,500

2. Semi-monthly salary = = = P6,437.50
24 24
or
Monthly Salar y P 12,875
2
= 2
= P6,437.50

Annual Salary P 154,500

3. Weekly salary = 52
= 52
= P2,971.15

4 SDOIN_ Specialized_ABM_Q2_BusMath12_Module10
 Annual Salary P 154,500
4. Bi-weekly salary = = = P5,942.31
26 26

Or = Weekly salary x 2 = P2,971.15 x 2 = P5,942.3

II. WAGE – is a fixed regular payment received by a worker for labor or

services according to a contract that is usually on a piecework, hourly
or daily basis.

A. Piece Rate
A worker employed on a piecework basis is paid in proportion to the quantity
of work he or she finishes.
1. Fixed piece-rate plan- the rate is fixed irrespective of the quantity
produced.
Example: Kim is working in an accessory shop. She is paid on a per-piece
basis at the rate of P15 per piece. If she finishes 140
accessories in a week, how much is her total earnings?
Given: Rate = P15 per piece
Quantity Produced = 140 pieces (base)
Find: Total Earnings
Solution: Total Earnings = Quantity x Rate
= 140 x P15
= Php2,100
2. Differential piece-work plan- the rate gradually increases as the quantity
produced also increases.
Example: Grace works in her friend’s business wherein she was tasked to
repack and seal gummy bears. She is paid on the following
differential pay plan schedule:

Daily Rate per 100

Quantity
Packs
Less than 100 P100.00
100-149 P105.00
150-199 P110.00
150-199 P115.00

5 SDOIN_ Specialized_ABM_Q2_BusMath12_Module10
 Compute for Grace’s total wage for the week if she repacked the
following quantities:

MONDAY 92
TUESDAY 105
WEDNESDAY 143
THURSDAY 176
FRIDAY 201

Solution:
Quantity x Rate = Amount
Monday 92 x P100/100 = 92 x 1 = P92.00
Tuesday 105 x P105/100 = 11,025/100 = P110.25
Wednesday 143 x P105/100 = 15,015/100 = P150.15
Thursday 176 x P110/100 = 19,360/100 = P193.60
Friday 201 x P115/100 = 23,115/100 = P231.15

B. Hourly or Daily Basis

Many of the employees are usually paid on an hourly basis. In computing for
the daily pay, we simply multiply the number of hours of work by the hourly rate.
According to the Article 83 of the Labor Code, the normal hours of work of
any employee shall not exceed eight (8) hours a day.
Example: Simon works in a factory that pays him an hourly rate of
P45.50. How much is his daily wage if he works for 8 hours a
day?
Solution: Daily wage = number of working hours x hourly rate
= 8 x P45.50
= P364

III. INCOME - It is the money earned by working or through investment. Here

are some examples of income:
• Salary and wages
• Commissions
• Income for properties if it is rented out

6 SDOIN_ Specialized_ABM_Q2_BusMath12_Module10
 • Dividend income for stockholders
• Profit of the business owned
• Royalties if they are authors

IV. EMPLOYEE BENEFITS - a payment of gift made by an employer, the

state, or an insurance company. The following are some of the benefits in the
Philippines given to the employees:
• Vacation Pay and Sick Leaves
• Medical and Hospitalization Benefits
• Meal Allowance
• Transportation Allowance
• Clothing Allowance
• Incentive Pay for Productivity

GROSS AND NET EARNINGS

Mr. Garcia Salary

Philhealth Pag-Ibig
4% 2%

Others SSS
3% 7%

Tax Withheld
9%

Net Pay
75%

Net Pay Tax Withheld Others SSS Philhealth Pag-Ibig

For the month of September 2020

Name: Zac Garcia Basic Salary: 25,232.00

7 SDOIN_ Specialized_ABM_Q2_BusMath12_Module10
Position: Administrative Assistant II Allowances: 2,000.00
Gross Earnings: 27,232.00

DEDUCTIONS

Description Amount of Deduction

SOCIAL SECURITY SYSTEM 1,766.24
MEDICARE (PHILHEALTH) 1,009.28
PAGIBIG (FUND) 504.64
BIR (WITHHOLDING TAX) 2,270.88
CURRENT ABSENCES 756.96

Total Deductions: 6,308.00

NETPAY: 18,924.0

From the figure above, it can be seen that in Mr. Zac’s payslip, there are
three parts namely the Gross Earnings, Total Deductions, and Net Pay. Let us
summarize the computed values.

GROSS EARNINGS P27,232.00

TOTAL
P6,308.00
DEDUCTIONS

MONTHLY NET PAY P6,308.00

By looking closer into the figures, we can see that,

P27, 232.00 - P6, 308.00 = P18, 924.00

Through this, we can say that,

Gross Earnings – Total Deductions = Net Pay

E–D=N

The words "gross earnings," "deductions," and "net" can be found on Mr.
Garcia's payslip. The term "gross earnings" refers to the amount earned by the
worker before any deductions. However, the term "net pay" or "net earning" refers

8 SDOIN_ Specialized_ABM_Q2_BusMath12_Module10
to the amount received less any employee's deductions. "Deductions" are amounts
retained by any authority as a form of payment for necessary dues such as taxes,
loans, health insurance, absenteeism, and so on.

Problem 1: Marissa has a monthly total earning amounting to P20, 532.16. If she
received a total deduction of P3, 210.00. How much is her net earnings?

Solution: Net Earnings = Gross Earning – Deductions

N=E–D

N = P20, 532.16 - P3, 210.00

N = P17, 322.16

Problem 2: John’s net pay is P14, 975.68. If his total deduction is P1, 962.05, how
much is his gross earnings?

Solution: E=N+D

E = P14, 975.68 + P1, 962.05

E = P16, 937.73

What’s More

A. DIRECTIONS: Complete the following table on a separate sheet of paper. Round

off your answer to the nearest centavo. Show your solution below the table.

Monthly Salary Semi-monthly Salary Weekly Salary

Php14,975.91 (1) (2)
(3) P9,243.50 (4)
(5) (6) P2,063.78
(7) P4,875.12 (8)
P26,862.00 (9) (10)

B. DIRECTIONS: Compute the gross earnings of the following piece-work

employees. Quantity Produced Pay Plan Total Earnings

9 SDOIN_ Specialized_ABM_Q2_BusMath12_Module10
 Quantity
Pay Plan Total Earnings
Produced
a 3,000 P0.25 per piece
b 1,104 P1.15 per piece
c 125 P1.05 for first 100
P1.15 for all others

C.DIRECTIONS: Read and analyze each word problem and then solve each.
1. Mildred has a monthly net amounting to Php25,634.71. If her total deduction is
Php2,100.00, how much is her total earnings?
2. Sarah receives a monthly net amounting to Php18,205.00. Her gross earning is
Php20,447.00. How much deduction does she have?

What I have Learned

Excellent! It appears that the discussion above improved your grasp of the
week's lesson.
Now, let me see if you remember the discussion on gross and net earnings.
DIRECTIONS: On a separate sheet of paper, answer the following questions.
1. In your own words, define the following terms:
(a) Salary
(b) Wage
(c) Income
(d) Benefit
2. How do we compute gross earning?
3. What is the formula in computing the net pay?

10 SDOIN_ Specialized_ABM_Q2_BusMath12_Module10
 What I Can Do
For the month of September 2020
Name: Mary Cruz Basic Salary: 20,256.00
Position: Clerk Allowances: 1,000.00
Gross Earnings: _________

DEDUCTIONS

Description Amount of Deduction

SOCIAL SECURITY SYSTEM 1,504.75
MEDICARE (PHILHEALTH) 900.00
PAGIBIG (FUND) 200.00
BIR (WITHHOLDING TAX) 1,723.64
CURRENT ABSENCES 534.96
PRIVATE LOANS 3,466.00

Total Deductions: ___________

NETPAY: ___________

Questions:
1. How much is Ms. Cruz’s gross earnings?
2. How much is her total deductions?
3. After subtracting the deductions to the gross earnings, how much is her
net earnings?

Assessment

A. TRUE or FALSE: Read and analyze the following statements. Write T if the
statement is true and F if not.
1. Salary is the earnings of employees paid on monthly or annual basis.

11 SDOIN_ Specialized_ABM_Q2_BusMath12_Module10
2. A business’ profit is also considered as income.
3. Wages are the amount received by the worker on a piece-rate, hourly rate or
daily rate.
4. A male employee may avail a maternity leave.
5. If the total deduction is 0, then gross earnings is equal to net earnings.
6. Net earnings can be greater than gross earnings.
7. The total deduction is always equal to the net earnings.
8. Taxes are added in the deductions.
9. Other benefits and payments of loans are deducted from the net earnings.
10. The sum of the deductions and the net pay is equal to the total earnings.
B. Analyze each problem and answer the following questions. Write only the letter
of the correct answer.
11. Kristian works fifteen hours a week and earns P50.50 per hour. How much
does he earn a week?
A. P353.50 B. P505.00 C. P750.50 D. P757.50
12. Miya is paid a bi-weekly salary of P3, 500. How much is Miya’s annual salary?
A. P14,000.00 B. P42,000.00 C. P91,000.00 D. P182,000.00
13. The pay plan for Bruno as a factory worker is P10.50 for every pack of
chocolate produced. How much is Bruno’s gross earnings if he produced 250 packs
of chocolates?
A. P2,625.00 B. P2,750.00 C. P2,800.00 D. P3,500.00
14. Eve has a monthly net amounting to P29,653.08. If her total deduction is
Php2,643.30, how much is her total earnings?
A. P27,009.78 B. P32,296.38 C. P35,684.35 D. P40,378.48
15. Russell receives a monthly net amounting to P27,842.29. His gross earning is
P31,854.68. How much deduction does he have?
A. P4,012.39 B. P5,088.71 C. P6,237.00 D. P7,745.3

Additional Activities
A. DIRECTIONS: The table below shows the salary of 5 employees. Complete the
table by computing the amount of the missing salary.

Employee Annual Salary Semi-monthly Weekly Salary Monthly

12 SDOIN_ Specialized_ABM_Q2_BusMath12_Module10
 Salary Salary
Anna P339,172.20 (1) (2) (3)
Bea (4) P128,380.50 (5) (6)
Clara (7) (8) P58,094.52 (9)
Donna (10) (11) (12) P26,579.31
Elyssa P230,863.00 (13) (14) (15)

B. DIRECTIONS: The table below shows the deductions, gross and net earnings of
5 employees. Complete the table by identifying the missing value.

Gross
Employee Deductions Net Earnings
Earnings
Francis (1) Php29,193.16 Php33,942.84
Gerald Php1,745.00 (2) Php18,002.95
Harold Php7,109.27 Php51,286.32 (3)
Isaac Php3,457.98 (4) Php28,051.15
Justin (5) Php28,654.92 Php28,654.92

References
Lopez, B., Martin-Lundag, L. and Dagal, K., 2016. Business Math (Teacher's
Manual). Quezon City: Vibal Group, Inc.
Lopez, B., Martin-Lundag, L. and Dagal, K., 2016. Business Math (Textbook).
Quezon City: Vibal Group, Inc.
Mariano, Norma D., 2016. Business Mathematics (Textbook). Sampaloc Manila :
Rex Book Store, Inc.

13 SDOIN_ Specialized_ABM_Q2_BusMath12_Module10
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