Computing Salary, Wage, and Commission

Wage

• Definition: Remuneration or earnings expressed in terms of money.

• Based on time, task, piece, or commission.

• Payable by employer to employee under contract.

• For work done or services rendered.

• Hourly Wage: Amount earned per hour worked.

• Daily Wage: Amount earned per day of actual work.

  • Excludes payment for days not worked (rest days, holidays, leaves), unless required by law or employer policy.

  Example:

• Perry is paid ₱475.00 a day as an internet café assistant. Thus, the amount of ₱475.00 is an example of a wage.

Salary

• Fixed regular wage, typically paid monthly, semi-monthly, or weekly.

• Especially for professional, managerial, or administrative positions.

• Annual Salary: Total amount earned in one year from a fixed monthly salary.

  • Formula: $Annual\ Salary = Monthly\ Salary \times 12\ months$

• Monthly Salary: Fixed amount earned every month.

  • Formula: $Monthly\ Salary = \frac{Annual\ Salary}{12\ months}$
  • Formula: $Monthly\ Salary = Daily\ Wage \times 24\ days$

  Example:

• Ms. Shanna C. Dela Cruz receives a monthly payment of ₱19,500.00 as inventory officer. Hence, the amount of ₱19,500.00 is an example of a salary.

• Semi-monthly Salary: Amount earned twice a month at intervals not exceeding sixteen (16) days.

  • Can be computed by dividing monthly salary by 2
  • Formula: $Monthly\ Salary = \frac{Annual\ Salary}{12\ months} \div 2$

• Weekly Salary: Income received in a week.

  • Formula: $Weekly\ Salary = \frac{Annual\ Salary}{52\ weeks}$
  • Formula: $Weekly\ Salary = Daily\ Wage \times 6\ days$

Overtime Pay

• Extra pay for working beyond 8 hours.
• Rate: Additional 25% of regular wage.
• Work on a Rest Day or Special Holiday: Multiply the daily rate by 1.30
• Work on a Regular Holiday: Multiply the daily rate by 2.00
• Work on a Regular Holiday that falls on a Rest Day: Multiply the daily rate by 2.60
• Night Shift Differential: Multiply the applicable rate by 1.10 (for work between 10:00 PM and 6:00AM)

Commission Income

• Earned as a percentage of sales made.
• Can be pure commission or base salary plus commission.

Piecework Earning

• Based on the number of items or products completed.

Computing Weekly Salary to Daily Wage

Problem 1: Maria works as a barista, earning ₱60 per hour, working 8 hours a day, 5 days a week. How much does she earn in a week?

Solution:

• Hours per day = 8
• Days per week = 5
• Total hours per week = $8 \times 5 = 40$ hours
• Hourly rate = ₱60
• Weekly wage = $40 \times 60 = ₱2,400$
• Answer: ₱2,400

Problem 2: James is a warehouse helper in Manila and is paid ₱70 per hour for regular hours. He worked 45 hours this week. Overtime (beyond 40 hours) is paid at 1.5 times the regular rate. What is his total weekly wage?

Solution:

• Regular hours = 40
• Overtime hours = $45 – 40 = 5$
• Regular pay = $40 \times ₱70 = ₱2,800$
• Overtime rate = $₱70 \times 1.5 = ₱105$
• Overtime pay = $5 \times ₱105 = ₱525$
• Total wage = $₱2,800 + ₱525 = ₱3,325$
• Answer: ₱3,325

Computing Weekly Salary from Annual Salary

Problem 1: Paolo is a public-school teacher in Quezon City. His annual salary is ₱324,000. He is paid weekly. How much does Paolo earn per week, based on his annual salary?

Solution:

• Annual salary = ₱324,000
• Weeks in a year = 52
• Weekly wage = $₱324,000 \div 52 = ₱6,230.77$
• Answer: ₱6,230.77 per week

Problem 2: Lani is a nurse in a private hospital in Cebu City with an annual salary of ₱420,000. She works 40 hours per week, but this week, she worked 5 extra hours. Overtime is paid at 1.25 times her regular hourly rate. What is Lani’s total weekly pay this week, including overtime?

Solution:

• Weekly base pay = $₱420,000 \div 52 = ₱8,076.92$
• Regular weekly hours = 40
• Hourly rate = $₱8,076.92 \div 40 = ₱201.92$
• Overtime rate =$₱201.92 \times 1.25 = ₱252.40$
• Overtime pay = $5 \times ₱252.40 = ₱1,262.00$
• Total weekly wage = $₱8,076.92 + ₱1,262.00 = ₱9,338.92$
• Answer: ₱9,338.92

Problem 3: Arnel is a car sales agent in Davao. He earns a base salary of ₱240,000 per year and gets a 2% commission on sales. This week, he sold cars worth ₱600,000. What is Arnel’s total weekly income this week?

Solution:

• Weekly base salary =$₱240,000 \div 52 = ₱4,615.38$
• Commission = 2% of ₱600,000 = $0.02 \times ₱600,000 = ₱12,000$
• Total income =$₱4,615.38 + ₱12,000 = ₱16,615.38$
• Answer: ₱16,615.38

Computing Monthly Salary from Daily Wage

Problem 1: Liza works as a cashier in a sari-sari store in Iloilo and earns ₱500 per day. She works 6 days a week, and in one month, she worked 24 days. How much is Liza’s monthly wage?

Solution:

• Daily wage = ₱500
• Days worked = 24
• Monthly wage = $500 \times 24 = ₱12,000$
• Answer: Liza’s monthly wage is ₱12,000.

Problem 2: Ramon is a utility worker in a public school in Cavite and is paid ₱570 per day. One month, he worked 22 regular days and had 5 hours of overtime. His regular work hours are 8 hours per day, and overtime is paid at 125% of the hourly rate. What is Ramon’s total wage for the month?

Solution:

• Step 1: Regular monthly wage =$₱570 \times 22 = ₱12,540$
• Step 2: Regular hourly rate =$₱570 \div 8 = ₱71.25$
• Step 3: Overtime rate = 125% of ₱71.25 = ₱89.06
• Step 4: Overtime pay =$₱89.06 \times 5 = ₱445.31$
• Step 5: Total monthly wage =$₱12,540 + ₱445.31 = ₱12,985.31$
• Answer: Ramon’s total wage for the month is ₱12,985.31.

Computing Monthly Salary from Annual Salary

Problem 1: Carla is a public high school teacher in Nueva Ecija. She earns an annual salary of ₱384,000. She budgets carefully each month and allocates 30% of her salary to savings. How much is Carla's monthly salary, and how much does she save each month?

Solution:

• Annual salary = ₱384,000
• Monthly salary =$₱384,000 \div 12 = ₱32,000$
• Monthly savings = 30% of ₱32,000 =$0.30 \times ₱32,000 = ₱9,600$
• Answer: Carla earns ₱32,000 per month and saves ₱9,600 monthly.

Problem 2: Marco works as a technician in a manufacturing plant in Laguna. He has a monthly base salary of ₱20,000. He often works overtime. For one month, he worked 12 hours of overtime. Overtime is paid 125% of the regular hourly rate. His regular work hours are 8 hours/day for 22 working days. What is Marco’s total pay for the month including his overtime?

Solution:

• Step 1: Calculate regular hourly rate
  • Monthly salary = ₱20,000
  • Monthly hours = $8 \frac{hours}{day} \times 22 days = 176 hours$
  • Hourly rate =$₱20,000 \div 176 = ₱113.64$
• Step 2: Overtime pay per hour
  • 125% of ₱113.64 =$₱113.64 \times 1.25 = ₱142.05$
• Step 3: Total overtime pay =$12 hours \times ₱142.05 = ₱1,704.60$
• Step 4: Total pay = Base salary + Overtime =$₱20,000 + ₱1,704.60 = ₱21,704.60$
• Answer: Marco’s total pay for the month is ₱21,704.60.

Problem 3: Rodel is a home-based steamer in Baguio City. He is paid ₱35 per face mask sewn. On average, he completes 80 masks per day. He works 25 days a month. He plans to save 40% of his income for buying a new sewing machine.

Questions:

• A) What is Rodel’s monthly income?
• B) How much does he save in a month?

Solution:

• Daily income =$80 masks \times ₱35 = ₱2,800$
• Monthly income =$₱2,800 \times 25 = ₱70,000$
• Savings = 40% of ₱70,000 =$₱70,000 \times 0.40 = ₱28,000$
• Answer:
  • A) Rodel’s monthly income is ₱70,000
  • B) He saves ₱28,000 monthly