Salary Computations: Gross/Net Pay, Deductions, and Statutory Obligations (Video Notes)

Vocabulary flashcards covering key terms related to gross/net pay, earnings and deductions, and the major statutory payroll obligations discussed in the lecture notes.

Gross Pay (Gross Income)

The total earnings of an individual before any taxes or deductions are taken out.

Net Pay (Net Income)

The amount of money an employee receives after all deductions (taxes, insurance, etc.) are subtracted from gross pay.

Deductions

Amounts subtracted from gross pay before calculating net pay, including taxes and contributions.

Earnings

All components that make up gross pay, such as salaries and allowances.

Basic Salary

The core fixed portion of earnings before any allowances or additions.

House Rent Allowances (HRA)

A component of earnings intended to cover housing costs.

Conveyance Allowances

A component of earnings to cover transportation or commuting costs.

Medical Allowances

A component of earnings allocated for medical-related expenses.

Special Allowances

Additional earnings that do not fall into other specified categories.

Gross Salary

The sum of all earnings before any deductions.

EPF (Employee Provident Fund)

A withholding for retirement savings, deducted from the employee’s pay.

TDS (Tax Deducted at Source)

Tax withheld from an employee’s income at the point of payment.

Professional Tax

A payroll tax imposed by certain jurisdictions on income.

Taxable Income

The portion of income that is subject to tax after applying deductions and exemptions.

Standard Deduction

A deduction that reduces taxable income by a fixed amount or percentage, used to lower the tax bill.

Four Statutory Obligations

The four mandated payroll contributions in the Philippines: SSS, Pag-IBIG (HDMF), PhilHealth, and Personal Income Tax.

SSS (Social Security System)

A private social insurance program that provides benefits for disability, sickness, maternity, old age, death, and other contingencies.

GSIS (Government Service Insurance System)

Social insurance for government employees; provides benefits funded by employee and employer contributions.

PAG-IBIG (HDMF)

Home Development Mutual Fund; a savings/ housing fund with employee and employer contributions.

PhilHealth

The National Health Insurance Program that provides health coverage and access to healthcare services.

Personal Income Tax

An individual income tax levied on wages, salaries, investments, and other forms of income.

New Income Tax Table 2025

The updated tax brackets and rates for 2025 used to compute income tax.

Taxable Benefits

Benefits that are subject to tax.

Non-Taxable Benefits

Benefits that are exempt from tax or only partially taxed (e.g., certain life insurance proceeds, gifts, etc.).

Proceeds of Life Insurance Policies

Payments received from life insurance policies that are generally non-taxable.

Prizes and Awards

Gifts or winnings that are typically taxable unless specifically exempted by law.

13th Month Pay and Other Benefits (exemption limit)

Additional annual compensation; exempt up to PHP 90,000 in some cases, with excess potentially taxable.

Overtime Pay

Additional wages paid for work performed beyond the regular working hours.

Amount in Words

A numeric amount written out in words on a payslip for clarity and verification.