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Learning Objectives:
• Calculate gross pay based on hourly rate and hours worked;
• Compare gross pay based on hourly rate and hours worked and fixed salary;
Gross Pay
- the total amount of money – before any deductions – that
an employer will pay
- employee
- employer
- minimum wage
- 8 hour work requirement
- Classification of employees:
- regular (fixed rate (monthly basis)
- non-regular
* project (monthly basis)
* contract (monthly basis)
* wage-earners (hourly basis)
* piece-rate (# of units produced)
Gross pay for wage earners is generally computed by using an
individual time card.
Time Card
Name: _____________________ Pay Rate/Hour: P100.00
Week Ended: ________________
AM PM # of Hrs.
Time In Time Out Time In Time Out
Monday 8:15 12:00 12:30 6:00 3.75+5.5=9.25
Tuesday
Wednesday
Thursday
Friday
Saturday
Total # Of Hours
Total Regular Hours: 8 hrs Total Pay: P800
Total Overtime Hours: 1.25 hrs Total Pay: 1.25 x P100 x 1.25 = 156.25
Total Gross Pay: P956.25
Prepared by: ____________________________
Approved by: ___________________________
Formula:
Wage Earners:
Hourly rate = Gross Pay
hours worked
Rate
Mon. Tues. Wed. Thurs. Fri. Ttl Hrs.
/Hr.
9 7 8 1/2 9 3/4 10 P40
Bonus Plans
c. Override Plan
d. Variable Commission
a. Straight Commission Plan
Formula:
• A. Commission
• B. Total earnings
Additional Exercises:
Solve for the following using the salary plus the
commission plan:
Supervisor
Determine:
a) Personal Commission
b) Override
c) Total Commission
Exercise:
Mr. Martinez is the supervisor of two sales representatives, Mr. Lu and
Mr. Lim. Mr. Martinez is receiving 7% personal commission and an
override of 10%, on top of his P30,000 fixed monthly salary. The
supervisor’s sales for the month of July is P300,000.
Mr. Lu and Mr. Lim receive 20% commission each. Their sales were
P240,000 and 350,000 respectively. Mr. Lu also receivesP15,000
monthly salary.
a) Mr. Martinez
b) Mr. Lu
c) Mr. Lim
d. Variable Commission
Total Sales
- Quota
Excess Sales
Exercises:
1. Solve for a) bonus and b) total earnings based on the following
information:
Sales in May P50,000
Quota P30,000
Salary per Month P15,000
Bonus Rate 10%
Straight Plan
Gross Pay = Rate/Unit x No. of units Completed
Differential Plan
Gross Pay = No. of Units Produced x Variable
Rate per Unit
Exercises:
1. Cindy produced 225 handy craft item. She is paid P60 per
item. Calculate her gross pay.
2.
No. of Units Rate / unit
1 -10 5
11- 20 10
21 -30 15
31 -40 20
• Types of Deductions:
▫ Mandatory/required – SSS, Philhealth, withholding taxes
▫ Non-mandatory – other deductions such as union dues,
insurances, cash advances, etc.
Net Pay – the amount of money that an employee takes home and
is equal to gross pay less any deductions
Exercise:
• If Rey’s gross pay is PhP30,000 per month and his employer
deducts the following from the total gross pay:
Employee Share: SSS Contributions – PhP370.00
Philhealth Contributions – PhP225.00
Employer Share: SSS Contribution – PhP740.00
Philhealth Contribution – PhP450.00
Withholding Taxes – 15% of the gross pay
Union dues – PhP100.00
Cash advance – PhP2,000