Payroll Deductions and Benefits (Quarter 1)

Vocabulary flashcards covering key payroll deductions, benefits, and earning concepts from the lecture notes.

SSS Contribution (employee share)

5% of the monthly salary is deducted from the employee for the Social Security System (the employer also contributes 10%).

SSS Contribution (employer share)

Employer portion of SSS contribution, 10% of the monthly salary.

Social Security System (SSS)

Philippine government program that provides social insurance benefits; funded through employer and employee contributions.

PhilHealth Contribution

5% of the monthly salary allocated to the PhilHealth health insurance program (part of the Universal Health Care Act).

Pag-IBIG Contribution

2% of the monthly salary contributed to the Home Development Mutual Fund (Pag-IBIG) for savings and housing loan benefits.

HDMF (Pag-IBIG Fund)

Home Development Mutual Fund; offers savings programs and housing loans to workers.

Withholding Tax

Tax withheld from compensation; calculated from annual net taxable income using tax brackets and remitted by the employer.

Taxable Income

Income used to determine withholding tax; typically gross income minus allowable deductions.

Net Pay

Take-home pay after all deductions are subtracted from gross pay.

Gross Pay

Total earnings before any payroll deductions.

Vacation Leave

Paid time off; typically 13 days in the first year, increasing by one day yearly starting the 2nd year, max 18 days, and convertible to cash.

Sick Leave

Paid sick leave; 12 days per year in the first two years, increases by one day per year after, max 15 days, unused days convertible to cash at year-end.

Holiday Pay

Pay during holidays; Special Holidays provide at least 30% extra (50% if the holiday falls on a rest day); Regular Holidays provide double pay, plus 100% more if working.

Special Holidays

Holidays with at least 30% additional pay; 50% if the holiday falls on a rest day.

Regular Holidays

Holidays with double pay; paid at least the regular daily wage plus 100% more if the employee works.

Employee Benefits

Remuneration other than basic pay, including leaves, medical benefits, allowances, and incentive pay like commissions or bonuses.

Commission

Income earned as a percentage of sales; total income equals Commission plus Salary.

Piece Rate

Pay based on quantity produced; formula = Quantity × Rate; can be fixed or graduated.

Fixed Piece-Rate Plan

A piece-rate plan where the rate remains constant regardless of quantity.

Differential Piece-Rate Plan

A piece-rate plan where the rate increases as more units are produced.

Total Deductions

Sum of all deductions from gross pay (SSS, PhilHealth, Pag-IBIG, withholding tax, etc.).

RA 11199

Social Security Act of 2018; governs SSS contributions.

RA 11223

Universal Health Care Act; governs PhilHealth contributions.

RA 9679

Home Development Mutual Fund Act (Pag-IBIG); governs Pag-IBIG contributions and loan collections.

Net Pay Formula

Net Pay = Gross Pay – (SSS + PhilHealth + Pag-ibig + Tax).

Withholding Tax Calculation (Tax Computation)

Process of computing the tax based on taxable income using the applicable tax brackets.