Business math
1st Quarter: 2nd Semester 1% on first Php20,000
Commission 2% on next Php20,000
- is a type of remuneration that is primarily used 3% on sales above quota exceeding the
to compensate employees who sell business foregoing Php40,000
commodities or services. Compute her gross earning if she sells a total of
Php75,360 for the past month.
Commission = Commission Rate x Amount of Sales GIVEN: Monthly Salary = Php9,400
𝒄𝒐𝒎𝒎𝒊𝒔𝒔𝒊𝒐𝒏 Sales Quota = Php30,000
Amount of sales =
𝒄𝒐𝒎𝒎𝒊𝒔𝒔𝒊𝒐𝒏 𝒓𝒂𝒕𝒆 Sales = Php75,360
Commission = see schedule
𝒄𝒐𝒎𝒎𝒊𝒔𝒔𝒊𝒐𝒏
Commission Rate = SOLUTION:
𝒂𝒎𝒐𝒖𝒏𝒕 𝒐𝒇 𝒔𝒂𝒍𝒆𝒔
Sales on Commission = Sales – Quota
Types of Commission SC = Php75,360 - Php30,000
▪ Straight Commission SC = Php45,360
- aka Plain Commission.
- It is a type of commission wherein the First = (Php20,000x1%) = Php200
salesperson’s earning or wage is based Next = (Php20,000x2%) = Php400
on his/her commission alone. Balance = (Php45,360 – Php40,000 = 5,360)
Balance = Php5,360 x 3% = Php160.80
EXAMPLE: Carmen Yambao works as a sales
representative for Ace Realty. She is paid solely Total Commission = (200+400+160.80)
on commission. She receives a 2% commission Total Commission = Php760.80
on her sales. Her sales for the current month Add Basic Salary = Php9,400
were Php1,035,000.00. Her commission would Gross Earnings = Php10,160.80
be as follows: ▪ Salary Plus Commission
Commission = Commission Rate x Amount of Sales - It is when an employee is given a fixed
Commission = Php1,035,000 x 2% wage plus a percentage of overall sales
produced by the employee.
Commission = Php20,700
Gross Earnings = Basic Salary + Commission
▪ Incremental Commission (Graduated)
- a commission paid to salespeople who EXAMPLE: Carmen Yambao’s Gross earnings
do not get a regular wage, and the assuming a basic salary of Php10,000 per
commission rate rises as sales volume month: (EXAMPLE #1)
rises. Gross Earnings = Basic Salary + Commission
Gross Earni= Php10,000 + Php1,035,000 x 2%
EXAMPLE: Gabriella is paid a base income of
Gross Earni= Php10,000 + Php20,907
Php 9,400 per month plus a commission on all
Gross Earni= Php30,907
sales beyond her quota of Php30,000 per
month, according to the schedule below:
▪ Commission and Bonus
- It is when a salesperson is given a
bonus if he/she exceeds his/her sale Override = Php7,7741.315
quota. 𝑎𝑛𝑛𝑢𝑎𝑙 𝑠𝑎𝑙𝑎𝑟𝑦
Basic Salary =
12
EXAMPLE: Eugene is a sales representative who 𝑃ℎ𝑝126,000
Basic Salary =
earns a base salary of Php18,000 per month 12
plus a 3% commission on sales that surpass his Basic Salary = Php10,500
quota of Php15,000. Assume he sold 36,000 Gross Earnings =
units in the current month. Determine his total Php10,500 + Php18,275 + Php7,7741.315
profits. Gross Earnings = Php36,516.32
GIVEN: Php18,000 basic salary per month
GIVEN: 3% commission on sales above Salary and Wage
GIVEN: Php15,000 - Employee compensation is the remuneration
GIVEN: Php36,000 = total sales paid in exchange for his or her services.
SOLUTION: Wages
Gross Earnings = Basic Salary + Commission - are the earnings that a worker receives on a
Gross Earning= Php18,000 + 3% (sales - quota) piece rate, hourly rate, or daily rate.
Gross Earning= Php18,000 + 3% (Php21,000) Basic Pay
Gross Earning= Php18,000 + Php630 - earnings or salaries received by an employee
Gross Earning= Php18,630 in their compensation package.
Piece Rate
▪ Commission with Override - A worker hired on a "piecework" basis gets
- It occurs when a salesman receives paid in proportion to the amount of work
commission on both his or her own completed.
sakes and the sales of his or her reps. - fixed piece-rate plan is fixed regardless of the
quantity produced.
EXAMPLE: Joan is a product manager who
Hourly Rate
oversees five sales reps. The firm pays him a
- many employees are paid by the hour.
yearly salary of Php126,000, a 5% commission
Articles of the Labor Law
on his own sales, and a 12% override on his
Article 83
men’s sales. Find his monthly gross earnings if
- average working hours of any employee
his total is Php365,500 and his guys can sell a
should not exceed eight hours a day.
total of Php1,548,263 for the month.
Section 85
GIVEN: Annual Salary =Php126,000
- the duty of all employers to provide their
His Sales =Php365,500
employees with less than 60 minutes their
Men’s Sales =Php1,548,263
normal meals.
Commission =5% of his sales
Section 87
Override =1/2% on men’s sales
- work may be performed for more than eight
SOLUTION:
hours a day provided that the employee is
Commission = Php365,500 x 5%
paid overtime work with additional
Commission = Php18,275
compensation equal to his or her normal
Override = Php1,548,263 x 1/2%
salary and a rent of twenty-five per cent of it.
Override = Php1,548,263 x .005
Section 93
- allowed to work on his or her day off, he or maximum amount of vacation time
she will be paid additional compensation of at available is 18 days.
least 30% of his or her normal salary. Sick leave – twelve days per year for the first
- does not have normal working days and no two years of service. With additional one
ordinary days off can be arranged, he or she sick leave every year starting on second
will be paid additional compensation of at year of service. Maximum total sick leave is
least 30% of normal working hours on 15 days. All unused leave days are
Sundays and holidays. convertible to cash in December of each
- special holiday shall be paid an additional year.
compensation of at least 30% Holiday Pay – Philippine Holidays
- rest day & on a planned day off, at least Payroll Deduction
50% of his or her normal salary. - an employee's take-home pay is his or her
Section 94 gross wages less certain payroll deductions.
- An employer may require an employee to
work on any holiday, but the employee will be Net Pay = Gross Earnings – total deduction
paid compensation equal to his or her double
EXAMPLE: Joy is paid a base salary of ₱8,500
allowance.
per month plus a 1% commission on sales. She
- special day off will be paid 150% of the
made ₱65,000.00 in sales during the month.
normal hourly rate.
Her deductions are as follows: 4% for SSS based
- regular holiday will be paid 200% of the
on her basic monthly pay; ₱100.00 for
normal hourly rate.
PhilHealth; 2% for Pag-Ibig; and 10%
- day off that falls into a normal holiday will
withholding tax based on gross earnings.
be paid 260% of the normal hourly rate.
Calculate her take-home income
Salary
- Employee earnings received on a monthly or Basic Salary = Php8,500
annual basis. Commission on Sales = 1%
Income Sales = Php65,000
- Wages and salaries are considered income Commission = 65,000x1%
by those who receive them. = Php650
Overtime Compensation Gross Earnings = 8,500 + 650
- is available to employees who work more = Php9,150
than the statutory number of hours.
Deductions:
Employee Benefits
(base on basic salary:)
- Employee perks include compensation other
SSS = 4% x 8,500 = Php340
than basic salary.
PhilHealth = Php100
- Employees in the Philippines receive the
Pag-ibig = 2% x 8,500 = Php170
following benefits:
(base on Gross earnings)
Vacation Pay - thirteen vacation days, plus
Tax = 10% x 9,150 = Php915
one extra vacation day every year beginning
TOTAL DEDUCTIONS:
in the second year of service and converted
340+100+170+915=Php1,525
to cash at the conclusion of each year. The
Net Pay = 9,150- 1,525 = Php7,625