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Deduction – amount held by any authority as a form of payment for some necessary dues or
mandatory deductions like taxes, GSIS/SSS, Philhealth, Pag-ibig, loans, etc.

Examples:
1. A university professor who receives a basic monthly salary of Php 72,000, and a living allowance
of PHP2,000 per month has an annual gross income of: (72,000 x 12) + (2,000 x 12) = Php
888,000. Suppose this university professor has to pay each year Php 245,880 for income tax, Php
15,676 for Philhealth, Php 17,280 for Pag-ibig and Php 77,760 for GSIS contributions, then his net
annual income is: 888,000 – (245,880 + 15,676 +17,280 + 77,760) = Php 531,404
Content: Fundamental operations of mathematics as applied in salaries and wages
MELC: The learners: 2. Private employee with a monthly compensation of ₱70,000 paid on a semi-monthly basis. The
1. Define salary, wage, income and benefits employee also has a loan of ₱5,500 from HDMF. What are the employees SSS, Philhealth, HDMF
2. Compute gross and net earnings contribution and withholding tax? What is the employees net pay?
3. Define each of the benefits given to wage earners
Solution:
4. Distinguish taxable from non-taxable benefits
5. Enumerate the standard deductions with corresponding computation Salary is ₱70,000 which is in the level ₱19,750 and above so SSS salary contribution is ₱800 for
one month and ₱400 on a semi-monthly basis.
Salary is ₱70,000 which is in the level ₱40,000 and above so Philhealth contribution for Philhealth is
Lesson 1: Definition of salary, wage, income and benefits ₱40,000 x 0.0275 = ₱1,100 / 2 = ₱550 / 2 (semi-monthly) = ₱275
Salary is ₱70,000 which is above ₱5,000 which is the maximum monthly compensation allowed to
Salary compute Pag-ibig so ₱5,000 x 0.02 = ₱100 / 2 (semi-monthly) = ₱50
 is the compensation usually quoted annuallyor monthly for an employee
Exemption l from tax = ₱400 + ₱275 + ₱50 = ₱725
 get paid every 15 days (bimonthly) or once a month (monthly)
₱70,000 / 2 = ₱35,000 - ₱725 = ₱34,275 - ₱33,333 = ₱942 x 0.3 = ₱282.60 + 5,416.67 = ₱5,699.27
 Salary earners are not paid less if they work for only a fraction of the required number of hours
withholding tax
Total deductions = ₱725 + ₱5,699.27 + (₱5,500 / 2) = ₱9,174.27
Wage
 is compensation quoted in an hourly or daily rate for an employee Net pay = ₱35,000 - ₱9,174.27 = ₱25,825.73
 wage earners usually get paid either weekly or sometimes even monthly at their employer's
convenience 3. Government employee with a monthly compensation of ₱20,000 paid on a semi-monthly basis.
 are under the “no work, no pay policy” which means they are only paid the actual number of The employee also has a PERA of ₱2,000. What are the employees GSIS, Philhealth, HDMF
hours or days that they worked contribution and withholding tax? What is the employees net pay?
Solution:
Income - is money that an individual receives in exchange for providing a good/service or through Salary is ₱20,000 which is GSIS ₱20,000 x 0.09 salary contribution is ₱1800 for one month and
investing capital. Like businessmen, farmers… ₱900 on a semi-monthly basis.
Salary is ₱20,000 which is in the level ₱10,001 to ₱39,999.99 so Philhealth contribution for
Benefits - is employee gift/compensation given by an employer on top of the basic salary/wage Philhealth is ₱20,000 x 0.0275 = ₱550 / 2 = ₱275 / 2 (semi-monthly) = ₱137.50
Salary is ₱20,000 which is above ₱5,000 which is the maximum monthly compensation allowed to
Lesson 2: Gross and Net Earnings
compute Pag-ibig so ₱5,000 x 0.02 = ₱100 / 2 (semi-monthly) = ₱50
Total Earnings – also known as gross earnings Withholding tax for ₱20,000 / 2 = ₱10,000. ₱10,000 is below ₱10,417 so withholding tax is ₱0
 Amount earned by any person before subtracting the taxes, benefits, loans, and other possible Total deduction = ₱900 + ₱137.50 + ₱50 = ₱1,087.50
deductions Net Pay = ₱10,000 + ₱1,000 - ₱1,087.50 = ₱9,912.50

Take Home Pay – net pay / net earnings Lesson 3: Benefits

 Amount earned by any person from the gross earnings less the total deductions
Net Earnings = Gross Earnings - Deductions Benefits of the Wage Earner
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1. Long-term benefits: retirement, death, disability 8. Employees achievement awards, e.g. for length of service or safety achievement, which must be
2. Minimum wage earner tax exemption (RA 9504) in form of tangible personal property other than cash or gift certificate, with an annual monetary
3. Bonuses or allowances (travel, rice, meal, clothing, and laundry) value not exceeding ₱10,000 received by the employee under an established written plan which
4. 13th month pay, holiday pay, special pay, overtime pay, nigh shift differential, and hazard pay does not discriminate in favor of highly paid employees.
5. Leave incentives: sick, maternity (RA 11210), paternity (RA 8187), solo parent (RA 8972), and 9. Gifts made during Christmas and major anniversary celebrations not exceeding ₱5,000 per
others employee per annum.
6. Health-related benefits and insurances 10. Daily meal allowance for overtime work and night/graveyard shift not exceeding 25% of the
Retirement – this benefit is like a saving account basic minimum wage on a per region basis.
HMO – Health Maintenance Organization 11. Benefits received by an employee by virtue of a collective bargaining agreement (CBA) and
Life and Accident Insurance productivity incentive schemes provided that the total monetary value received from both CBA
and productivity incentive schemes combined do not exceed ₱10,000 per employee per taxable
Retirement Benefit / Pay year.
The minimum retirement pay shall be equivalent to one-half (1/2) monthly salary for every year of
service, a fraction of at least six (6) months being considered as one (1) whole year. The following are non-taxable:
PERA of ₱2,000 x 12 = ₱12,000
Computation of Retirement Pay 13th month pay = ₱42,636
For the purpose of computing retirement pay, “one-half month salary” shall include all of the Productivity Enhanced Incentive (PEI) & Signing Bonus = ₱10,000
following: (this is part of Collective Bargaining Agreement CBA)
1. Fifteen (15) days salary based on the latest salary rate; Rice Allowance = ₱7,900
2. Cash equivalent of five (5) days of service incentive leave; (up to a maximum amount of ₱2,000 12 = ₱24,000 per year is non-taxable)
3. One-twelfth (1/12) of the thirteenth-month pay. Clothing Allowance = ₱5,000
Monetized Leave Credits = ₱38,760
1/12 of the thirteenth month pay = (1/12) x (365/12) = 2.5 days Grocery Allowance = ₱5,000
15 days + 5 days + 2.5 = 22.5 days (this amount was given as part of the Christmas gift so this is non-taxable)

R = 22.5 x daily rate x years of service Lesson 5: Standard Deductions

1. Income Tax – this deduction applies only to non-minimum wage earners. The income tax
Lesson 4: Taxable and Non-taxable benefits bracket of an employee is determined by computing his net taxable income.
(Net Taxable Income = Gross Taxable Income – Tax Exemptions)
Nontaxable Benefits 2. GSIS/SSS Contributions – GSIS deductions apply to government employees. 9% of the basic
Tax Exempt De Minimis Benefits under TRAIN RA 10963 Philippines salary of a government employee is the required GSIS premium. SSS contributions on the other
TRAIN – Tax Reform for Acceleration and Inclusion hand are deducted from the salary of non-government employees. The amount of the
1. Monetized unused vacation leave credits of private employees not exceeding 10 days during the contribution is based on a table released by SSS.
year. 3. Pag-ibig Contributions – this is applicable to all employees. The amount is fixed at PHP100 per
2. Monetized value of vacation and sick leave credits paid to government officials and employees. month.
3. Medical cash allowance to dependents of employees, not exceeding ₱1,500 per employee per 4. Philhealth Contributions – this deduction is also applicable to all employees. The amount of the
semester or ₱250 per month. premium is based on salary bracket and is given in a table of premiums released by Philhealth.
4. Rice subsidy of ₱2,000 or one sack of 50 kilogram rice rice per month amounting to not more
than ₱2,000.
5. Uniform and clothing allowance not exceeding ₱6,000 per annum
6. Actual medical assistance, e.g. medical allowance to cover medical and healthcare needs,
annual/executive check-up, maternity assistance, and routine consultations, not exceeding
₱10,000 per annum.
7. Laundry allowance not exceeding ₱300 per month.
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ACTIVITY SHEETS IN BUSINESS MATHEMATICS 2. A university assistant professor is usually given a monthly salary. If his salary is P40,000.00 per
QUARTER 2, WEEK 3 month, how much does he get every two weeks?

Activity 1: Title of the Activity: Unang sweldo!

I. In the space provided, write TRUE if the statement is correct and FALSE if otherwise. 3. A fast food service crew is paid per hour. If he is paid an average wage of P77.43 per hour, how
____________1. Gross earnings is sometimes greater than net income. much will he get if he works for 6 hours and 6 days for 4 weeks?
____________2. Net earnings can be greater than gross earnings.
____________3. The total deduction is always equal to the net earnings. 4. A minimum wage earner in Metro Manila is paid P481.00 for an 8-hour workday. What is his
____________4. Gross + net earnings is equal to deduction plus twice the net hourly rate?
earnings.
____________5. If the total deduction is 0, then gross earnings is non-taxable.
5. A teacher who gets a basic monthly salary of P20,000.00 and a living allowance of P2,000.00 per
____________6. Overtime pay is part of the deduction. month. Suppose this teacher has to pay every year P22,500.00 for income tax, P4,500.00 for
____________7. Taxes are added in the deduction. Philhealth, P1,200.00 for PagIbig and P6,975.00 for SSS contributions. Compute for the annual
____________8. Other benefits and payment of loans are deducted from the gross net income.
earnings.
Activity 3: Title of the Activity: Kita, gastos at neto!
____________9. If the total deduction is 0, then it follows that gross earning is non-
Read and solve the problems carefully.
taxable.
____________10. If the total deduction is more than the net earnings, then the net 1. Lucy works fifteen hours a week and earns P52.50 per hour. How much does she earn in a
earnings is more than half of the gross earnings. week?

II. Here, D represents the total deduction, N the monthly net, and E the total earnings.
2. Sarah receives a net earnings amounting to P17, 827.43. If she has a total earnings of P21,
Solve the following problems.
924.13, how much is her total deduction?
1. If D = P2,122.00 and N = P17, 517.29, what is the value of E?

3. Tom has a monthly net amounting to P12, 614.62. If he has a total deduction of P5, 438.15,
2. If E = P72, 130.22 and D = P28, 875.21, what is the value of N?
how much is his total earnings?

3. If E = P28, 091.16 and N= P11, 213.00, what is the value of D?

4. Ken works as a shopping mall security guard and is paid P50.00 per hour. Find his gross pay
4. If D = P17, 122.05 and N = P21, 318.29, what is the value of E? when he works 53 hours a week.

5. If D = P1, 423.16 and N = P18, 211.12, what is the value of E? 5. Tina is paid a weekly salary of P7,000.00. How much would Tina earn in a 5 weeks of work?

Activity 2: Title of the Activity: Magkano ang sahod mo? Quarter 2, Week 3 – Key Answer
Read and solve the problems carefully.
1. A tutor who is paid P200.00 per hour is earning a wage. How much does he earn for a 10-hour I II Challenging
work? 1. FALSE 1. P19,639.29 1. P787.50
2. FALSE 2. P43,255.01 2. P4,096.70
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3. FALSE 3. P 16, 878.16 3. P18,052.77

4. TRUE 4. P 38, 440.34 4. P2,650.00 3. Abby receives a monthly salary of P13,500.00. At the end of the year, how much would be her
5. FALSE 5. P 19, 634.28 5. P35,000.00 13 month pay?
th

6. FALSE Moderate
7. TRUE 1. P2,000.00 4. Ms. Santos is a government employee and has ten (10) days sick leave credits and seven (7)
8. TRUE 2. P20,000.00 days’ vacation leave credits. Her daily rate is P525.00 and did not avail the sick and vacation
9. FALSE 3. P11,149.92 leave credits, so the agency monetized it. How much will be his additional earning and how
10. FALSE 4. P60.12 much will it be taxed?
5. P233,325.00

ACTIVITY SHEETS IN BUSINESS MATHEMATICS

Activity 2: Me tama ka!
QUARTER 2, WEEK 4
Identify if the statement is True or False. Write T if the statement is true and F is false.
Activity 1: Libre to para sa empleyado! ___________1. All allowances are nontaxable.
Read and solve the problems carefully. ___________2. Taxes are added in the deduction.
___________3. Allowances are considered part of earnings.
I. True or False. In the space provided, write  if the statement is true and  if false.
___________4. Some bonuses or allowances are nontaxable.
____________1. All wage earners can avail all benefits of any wage earner.
___________5. Thirteenth month pay may or may not be taxed.
____________2. Thirteenth month pay is equivalent to 1/13 of the annual salary of any employee.
___________6. Nontaxable benefits include all monetized leave credits.
____________3. The total earnings of any employee is not always equal to the basic pay.
___________7. All benefits of government officials and employees are nontaxable.
____________4. An employer can give 14th month pay to all his employees that is equivalent to 13th
___________8. If the total deduction is 0, then it follows that gross earnings is nontaxable.
month.
___________9. If the monthly clothing allowance is P400.00, then the taxable amount for clothing
____________5. Living allowance is a must benefit given to all employees.
allowance is P1,200.00.
____________6. A pregnant employee may not be qualified for a maternity leave benefit.
___________10. There is a possibility that a certain employee will be exempted from tax even if
____________7. Holiday and special pays are synonymous.
he/she receives some benefits.
____________8. Retirement benefit can only be availed if the age of an employee is more than or
equal to 60 years old.
Quarter 2, Week 4 – Key Answer
____________9. Tax exemption benefit to minimum wage earners are only limited to the basic
salary, excluding allowances. Simple
II. Solve the following problems. I II
1. Mr. Abalos receives an annual salary of P240,000.00. At the end of the year, what would be his 1.  1. P20,000.00

13th month pay? 2.  2. P1, 601.83

3.  3. P13,500.00

2. The total allowances the company X give to their employees is exactly 15% of their salary. Mr. 4.  4. P8, 925.00 non taxable

Aquino’s salary this month is P27, 345.56, where his allowances are meal and clothing. If his 5. 

clothing allowance is fixed at P2,500.00, then what is his meal allowance for the month? 6. 
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7.  3. Robert worked in the following schedule for one week: Monday, 7 hours; Tuesday, 5 hours;
8.  Wednesday, 8 hours; Thursday, 9 hours; Friday, 4 hours. He was paid P52.25 an hour. How
9.  many hours did Robert work that week, and what was his gross pay?
Challenging
I Try this No. 3: In the space provided, state whether the following is a benefit of a wage earner or
1. T 6. F not. Write Y for yes and N if not.
2. T 7. F _________1. Special day pay __________8. SSS premium pay
3. T 8. F _________2. Travel allowance __________9. Holiday pay
4. T 9. F _________3. Tax __________10.13th month pay
5. T 10. T _________4. Paternity leave __________11. Rice incentive
_________5. Health insurance __________12. 5-year service pay
_________6. Motor car insurance __________13. Living allowance
ACTIVITY SHEETS IN BUSINESS MATHEMATICS _________7. Leave without pay __________14. Maternity benefit
QUARTER 2, WEEK 3-4

Try this No. 4: Read the following scenario and answer what is being asked.
Try this No.1: In the space provided, write TRUE if the statement is correct and FALSE if otherwise.
Ms. Justine is an employee of a commercial bank with several branches around the Philippines and
____________1. If the total deduction is 0, then it follows that gross earning is non-taxable.
is earning a minimum wage of P426.00 a day (the minimum daily wage in the area). Her manager
____________2. If the total deduction is more than the net earnings, then the net earnings is more
transferred her in another branch outside the area where the minimum wage for that province is
than half of the gross earnings.
P326.0 per day. Will she be exempted from paying tax since she received the same daily rate?
____________3. If the total earnings is thrice that of the deductions, then the net pay is twice that of
the deductions.
____________4. The sum of the deductions and the net pay sometimes equals the total earnings.
____________5. If the total earnings is equal to that of the deductions, then the net pay is twice as
much as the deductions.

Try this No. 2: Solve the following problems

1. Ron earned P6,500.00 last week at his regular job. Last week he also worked 15 hours at his
part-time job that pays him P45.00 per hour. How much is his total earnings last week?

2. Albert earns P7,500.00 a week. Albert is paid every two weeks. What gross pay does he
receive each payday?