- Is the total earnings before any
deductions are made.
- Includes base salary, overtime,
commission, and piecework pay.
GROSS INCOME = Salary + Allowances
- This is the amount left after
deductions are subtracted from
gross pay.
- Also called “take-home pay”
NET PAY = Gross Income – Total Deduction
- Are the amount subtracted from
gross pay by law or agreement.
In the Philippines, common deductions include:
Social Security System (SSS)
Applicable to: private sector employees
Purpose: retirement, disability, maternity, sickness,
and death benefits
Rate: 5% (0.05) based on a schedule tied to the
employees monthly
Government Service Insurance System (GSIS)
Applicable to: government employees only
Purpose: life insurance, retirement, disability and
survivorship benefits.
Rate: 9% (0.09) of monthly salary (employee share)
In the Philippines, common deductions include:
PAG-IBIG Fund (HOME)
Applicable to: all employees
Purpose: housing loans, savings, and calamity
loans
Rate: 2% (0.02) of monthly salary (employee
share)
PhilHealth
Applicable to: all employees
Purpose: healthcare benefits and hospitalization
coverage
Rate: 5% (0.05) of monthly salary, shared
between employee and employer.
In the Philippines, common deductions include:
With holding TAX (BIR)
Applicable to: all employees
Purpose: income tax, collected in advance by
the employer
Rate: based on salary bracket (Train Law)
Other Deduction
- (Optional or Conditional)
- these deductions depend on agreements
between employee and employer.
- loans, cash advance, insurance premiums,
union dues, deductions for absence or tardiness,
Income Tax Tables Under Train Law
Annual Income TAX Rate
P250,000 and below None (0%)
Above P250,000 –
20% of excess over P250,000
P400,000
Above P400,000 –
P30,000 + 25% of excess over P400,000
P800,000
Above P800,000 –
P130,000 + 30% of excess over P800,000
P2,000,000
Above P2,000,000 –
P490,000 + 32% of excess over P2,000,000
P8,000,000
Above P8,000,000 P2,410,000 + 35% of excess over P8M
Examples:
1. Anna is a factory worker at XYZ Factory and earns
P550 per day. She worked 22 days this month. Find
(a) Anna’s monthly gross income, (b) Anna’s
“take-home” pay.
2. Ms. Rivera is a public teacher in the Philippines
with a Salary Grade (SG) 22 Step 1. She receives
her monthly salary of P71,511 and non-taxable
allowance of P2,000 but she also has deductions
including taxes, contributions, and a GSIS loan of
P5,000 per month. Find (a) [Link]’s gross
income, (b) [Link]’s take-home pay.
• Percentage change indicates the extent to
which a quantity has increased or decreased in
relation to its original value
• It is often utilized in finance, sales, budgeting,
and data analysis.
(a) If the result is positive (+), it indicates a
percentage increase.
Example:
15%
(a) If the result is negative (-), it indicates a
percentage decrease
Formula: 𝒄𝒖𝒓𝒓𝒆𝒏𝒕 − 𝒑𝒓𝒆𝒗𝒊𝒐𝒖𝒔
𝒓= 𝒙𝟏𝟎𝟎
𝒑𝒓𝒆𝒗𝒊𝒐𝒖𝒔
Examples:
1. You had P5,000 last year for monthly groceries.
Price have gone up by 10%. How much more
money would you need this year to buy same
items?
2. A shirt originally costs P800, it show on sale with a
25% discounts. How much will the shirt cost after
the discount?
3. An appliance is priced P15,000. Add 12% VAT to
find the final price?
Examples: compute the percentage increase/decrease
1. Salary, old salary P600 and P650
2. Enrollment, last year P500 and present P550
3. Stock Value, previous P120 and current P90
- Is the general increase in prices of goods and
services over time, resulting in decreased
purchasing power.
- When inflation occurs, everyday items become
more expensive, meaning your money buys less.
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑝𝑟𝑖𝑐𝑒 − 𝑝𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑝𝑟𝑖𝑐𝑒
𝐼𝑛𝑓𝑙𝑎𝑡𝑖𝑜𝑛 𝑟𝑎𝑡𝑒 = 𝑥100
𝑝𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑝𝑟𝑖𝑐𝑒
A. COST PRICE (CP):
Original paid paid to acquire of produce a product.
B. SELLING PRICE (SP):
Price at which the product is sold to customers.
• Computing Mark-up Percentage
𝒔𝒆𝒍𝒍𝒊𝒏𝒈 𝒑𝒓𝒊𝒄𝒆 −𝒄𝒐𝒔𝒕 𝒑𝒓𝒊𝒄𝒆
𝑴𝒂𝒓𝒌 − 𝒖𝒑 = 𝒙𝟏𝟎𝟎
𝒄𝒐𝒔𝒕 𝒑𝒓𝒊𝒄𝒆
• Calculating Final Price After Discounts
𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕 𝑷𝒓𝒊𝒄𝒆 = 𝒐𝒓𝒊𝒈𝒊𝒏𝒂𝒍 𝒑𝒓𝒊𝒄𝒆 𝒙 (𝟏 − 𝒅𝒊𝒔𝒄𝒐𝒖𝒏𝒕 𝒓𝒂𝒕𝒆)
Examples, solve the following:
1. CP: P120 ; SP: P150 , solve for mark-up
2. SP: P2,000 ; discounts: 15% and 10%
- VAT is 12% tax added to the price of goods and
services in the Philippines.
- Business collect VAT from customers and remit it to the
government.
- Calculating VAT
𝑽𝑨𝑻 − 𝒊𝒏𝒄𝒍𝒖𝒔𝒊𝒗𝒆 𝑽𝑨𝑻
𝑷𝒓𝒊𝒄𝒆 𝒘𝒊𝒕𝒉𝒐𝒖𝒕 𝑽𝑨𝑻 =
𝟏. . 𝟏𝟐
- To find the VAT amount:
𝑽𝑨𝑻 = 𝑽𝑨𝑻 𝑰𝒏𝒄𝒍𝒖𝒔𝒊𝒗𝒆 𝑷𝒓𝒊𝒄𝒆 − 𝑽𝑨𝑻 𝑬𝒙𝒄𝒍𝒖𝒔𝒊𝒗𝒆 𝑷𝒓𝒊𝒄𝒆
1. VAT Inclusive: P560
VAT Exclusive: P500
Solve for VAT?
2. VAT Exclusive: P1,200
VAT: P144
Solve for VAT Inclusive?
3. VAT: P300
Inclusive VAT: 30
Solve for w/out VAT?