Salaries, Wages,
Income, and
Benefits
People in our community have different professions
(e.g. doctors, lawyers, teachers) andjobs (e.g.
carpenters, factory workers, fishermen, drivers). These
people who work expect amonetary return for their
goods or services. It allows them to make a living from
their [Link] are different ways on how a person
gets paid for his/her services through differentmanners
of payment like salary, wages, benefits and other
sources of income
The Top 10 Highest-Paying Jobs in the
PhilippinesWhat is your dream job? Have you
ever wondered about the highest paying jobs in
thePhilippines? The Department of Labor and
Employment (DOLE), in partnership with
theBureau of Local Employment (BLE), revealed
the top 10 highest-paying jobs in their
LaborMarket Trends report released in March
2019
After graduation, do you plan to work? Do you plan to
put up your own business? Doyou want to pursue
college and go after your dream job?
Whatever you plan to do, you will surely use your
talent, creativity, and expertise andget
compensated for what you do. Therefore, you
must be familiarized with the differencesbetween
salary, wages, income and benefits
Salary
is a fixed amount usually associated with
employeecompensation usually received on a
monthly or semi-monthly basis,but it may be
quoted in an annual sumIt is, sometimes,
necessary to convert salaries on an annual basis
into monthly basis,weekly to monthly, monthly
to semi-monthly, etc.
In these cases, we should
alwaysremember that:
1 year = 12 months = 24 semi-monthly1 year
= 52 weeks = 26 bi-weekly1 month = 2 semi-
monthlywhere: “semi-monthly” means
“given twice a month” and“bi-weekly” means
“given every two weeks”
Salary Earners
➢These are the employees who receive the
salaries and usually get paid every 15 days
(semi-monthly).
➢These employees are not paid less if they work
for only a fraction of the required number of
hours of work.
➢They are not paid for working overtime
Example 1
[Link]. Sarmiento, a manager of the
Maharlika Company earns ₱420,000
annually. If he is paid monthly, how
much does he get on his paycheck?
Solution:
Since there are 12 months in a year, then we divide the
annual salary by 12.
That is:
monthly salary =annual salary
12=₱420,000
= ₱35,000
2.A university assistant professor in a state university
gets a monthly salary of ₱50,[Link] much will he
receive if the salary is given semi-monthly?
Solution:
Since semi-monthly salary is given two times a month, then
we divide the monthly salary by 2. That is:
semi − monthly salary =monthly salary2
=₱50,000= ₱25,000
[Link]. Sanchez works as an accountant and gets a
salary of ₱15,000 which is given semi-monthly. How
much will be her annual salary?
Solution:Since semi-monthly salaries are given twice a
month or 24 times in a year, then we multiply the
semi-monthly salary by 24.
That is:
Annual salary = (semi-monthly salary)(24)= (₱15,000)
(24)= ₱360,000
Wage is usually associated with employee
compensationthat is based on the number of
hours/days worked multiplied byan
hourly/daily rate of pay
Wage is usually paid on a weekly basis, but it
may be quoted in an hourly rate or daily rate
of an employee. To solve for the wage,
remember that:wage = (hourly rate)(no. of hours
worked)= (daily rate)(no. of days worked)
Wage Earners
➢These are the employees who receive the wages
and usually get paid either weekly ormonthly
depending on the employer’s convenience.
➢These employees are under the “no work, no
pay” policy where they are only paid forthe actual
number of hours or days that they rendered work
but they are paid forworking overtime
Sources of Income
a..Commission Income – payment for the commission on sales
[Link] Income – payment from rentals of properties and real
estates
[Link]– from investments and [Link] – payments for
authors, products sold or licensee.
[Link] Income – profits from businesses
[Link] – from a variety of loans from individuals or companies
[Link] Gains – from the sales of investmentsh.
[Link] – such as crops, fish and other products
Examples:[Link] Glenne works as a math
tutor and is paid ₱150 per hour. How
much wage does she earn for a 10-hour
per week of work?
Solution:Since the given is the hourly rate, we
simply multiply it by the number of hours
worked. That is:wage = (hourly rate)(no. of hours
worked)= (₱150)(10 hours)= ₱1,500
[Link] Pedro, a minimum wage earner in Metro
Manila is paid ₱450.50 for an 8-hour workday. What
is his hourly wage?
Solution:Since the given is wage and he worked for 8 hours, then we
must divide the wage by 8. That is:hourly rate ==wageno. of hours
worked₱450.50 8=₱56.31
Income is the total amount that people earn in
exchange ofthe goods, employment, businesses,
investments and professionalservices that they have
rendered.
Types of [Link] IncomeActive income is when you do the
work and are paid for that work. If you donothing, you will no longer be
[Link] IncomePassive income is when the payment is not
directly tied to active work. It isusually front-loaded with active work
and gets paid with small amount, while the bulkof income comes later.
Benefits are employee compensation given by an
employerother than the basic salary/wage. It may
come in the form of cashor in kind.
Activity 1.1 Salary Earner versus Wage Earner: Directions: Classify
each of the following profession/job as to salary as to salary earner or
wage earner. Write SE if the given is a salary earner and WE if it is a
wage earner
1. engineer
2. manager
3. carpenter
4. service crew
5. factory worker
6. cashier
7. public school teacher
8. construction worker
9. private tutor1
10. accountant
Activity 1.2 Work! Work! Work!. Directions: Read and
analyze each word problem and then solve each.
Write your final answer on a separate sheet of paper
or notebook. Don’t forget to show your solutions
11. Dianne works as a secretary and earns ₱180,000 annually. If she is paid semi-
monthly, how much does she get every pay day?
12. Mang Celing, an auto mechanic, is paid ₱80 per hour of work. How much will
he earn in 4 weeks if he rendered 30 hours of work each week?
13. If a security guard in a five-star hotel is being offered a salary of ₱12,000
every two weeks. How much will be his annual salary?
14. A promodiser selling appliances in a department store receives his pay check
bi-weekly. If the daily rate is ₱600 and works 6 days a week, how much will he
receive every pay day?
15. Felix works as a call center agent. His daily rate is ₱765. If he works 6 days a
week, how much will he earn after a probation period of 12 weeks?
Assessment
Direction: Choose the letter of the correct answer. Write the letter that
corresponds to your answer on aseparate sheet of paper. Show your solution. If
some items are new to you, choose the best answer basedon your perception.
1. It is a fixed amount usually associated with employee compensation usually
received on a monthlyor semi-monthly basis, but it may be quoted in an annual
sum.A. salary B. wageC. income D. benefit
2. It is usually associated with employee compensation that is based on the
number of hours workedmultiplied by an hourly rate of pay.A. salary B. wageC.
income D. benefit
3. It is the total amount that people earn in exchange of the goods,
employment, businesses,investments and professional services that they have
rendered.A. salary B. wageC. income D. benefit
4. It is an employee compensation given by an employer
other than the basic salary/wage. It maycome in the form of
cash or in kind.A. salary B. wageC. income D. benefit
5. These are employees who are not paid less if they work for
only a fraction of the required numberof hours of work.A.
salary earner C. income earnerB. wage earner D. benefit
earner
6. These are employees who are under the “no work, no pay”
policy.A. salary earner C. income earnerB. wage earner D.
benefit earner
7. It is a type of income where you do the work and you are
paid for that work.A. active B. passive C. captive D. abusive
8. It is a type of income where the payment is not
directly tied to active work but usually front-
loadedwith active work and gets paid with small
amount, while the bulk of income comes later.A. active
B. passive C. captive D. abusive
9. Which of the following is NOT a salary earner?A.
teacher B. engineer C. manager D. mechanic
10. Which of the following is NOT a wage earner?A.
service crew B. carpenter C. lawyer D. private tutor
11. Julie earns ₱8,500 a week. How much will she receive each pay day if she is being paid
bi-weekly?A. ₱8,500 B. ₱17,000 C. ₱34,000 D. ₱38,000
12. Freya works as a seller in a boutique. She earned ₱18,000 for working 20 days in a
month. Howmuch is her daily rate?A. ₱200 B. ₱800 C. ₱900 D. ₱1,800
13. Mrs. Carreon who works as a teacher in a private school is being paid ₱9,000 every two
weeks. Howmuch will be her annual salary?
A. ₱18,000 B. ₱36,000 C. ₱216,000 D. ₱234,000
14. Maurice applies for a secretarial position in the MY Company. They offer an
annual salary of₱288,000 which will be given bi-weekly. How much will she receive every
pay day if she will accept theoffer?A. ₱5,538 B. ₱11,077 C. ₱12,000 D. ₱24,000
15. Carl Michael is a call center agent and got an offer from two big companies. Company
ABC offers amonthly salary of ₱35,000. However, the workplace is far from where he lives
where renting a house costs₱7,000 a month. On the other hand, Company XYZ
offers a monthly salary of ₱30,000 and a freeaccommodation near the workplace.
Based on the given information, which company is offering a bettercompensation and
benefit package?A. Company ABC C. both companiesB. Company XYZ D. neither of the two
companies