General Mathematics: Payroll Computation Guide

These vocabulary flashcards cover the fundamental concepts of payroll computation including basic pay types, premium rates for holidays and overtime, and mandatory Philippine government deductions for 2025–2026.

Wages

Compensation paid to an employee based on the actual time worked, usually calculated on an hourly or daily basis, common for daily-paid or hourly-paid workers.

Salary

A fixed amount of compensation paid to an employee for a specific period (weekly, semi-monthly, or monthly), regardless of the exact number of hours worked.

Daily Rate (from Monthly Salary)

$\text{Daily Rate} = \text{Monthly Salary} \times \frac{1}{26}$ which is common for a 6-day workweek in the Philippines.

Hourly Rate

$\text{Hourly Rate} = \text{Daily Rate} \times \frac{1}{8}$ based on a standard 8-hour workday.

Overtime Rate (Regular Day)

The rate paid for working beyond 8 hours a day, calculated as $1.25 \times \text{Regular Hourly Rate}$.

Rest Day or Special Holiday Premium Pay

The amount earned for working on a scheduled rest day or special non-working holiday, calculated as $\text{Daily Rate} \times 1.30$.

Regular Holiday Premium

Double pay earned for working on regular holidays (e.g., Independence Day), calculated as $\text{Daily Rate} \times 2.00$.

Regular Holiday on Rest Day Premium

The premium pay for working when a regular holiday falls on an employee's rest day, calculated as $\text{Daily Rate} \times 2.60$.

Night Shift Differential

Additional payment for employees working between 10:00 PM and 6:00 AM, calculated as $\text{Applicable Rate} \times 1.10$.

Commission Income

Earnings based on the value of sales made, calculated as $\text{Total Sales Made} \times \text{Commission Rate (\%)}$.

Piecework Earnings

A form of pay where workers are paid per unit produced, calculated as $\text{Number of Pieces Completed} \times \text{Piece Rate per Unit}$.

Gross Income

The total earnings of an employee before any deductions, consisting of basic pay plus all allowances, premiums, commissions, and other taxable benefits.

SSS (Social Security System) Employee Rate

$5\%$ of Monthly Salary Credit (MSC), with a minimum MSC of $5,000$ and a maximum MSC of $35,000$ for 2025–2026.

PhilHealth Employee Rate

$2.5\%$ of Monthly Basic Salary, with a floor of $10,000$ and a ceiling of $100,000$ for 2025–2026.

Pag-IBIG Employee Rate

$2\%$ of monthly salary, capped at a maximum deduction of $200$ for salaries greater than or equal to $10,000$.

Withholding Tax (BIR)

A progressive income tax withheld from an employee's pay by the employer based on projected annual income and official BIR withholding tables.

Net Pay

Also known as Take-Home Pay, this is the amount calculated as $\text{Gross Income} - \text{Total Deductions}$.