Gross And Net Earnings PDF

GROSS AND MODULE 3 NET EARNINGS PRESENTED BY GROUP 3 AT THE END OF THIS MODULE, YOU ARE EXPECTED TO: 1. DEFINE SALARY, WAGE, INCOME, BENEFITS.(ABM_BMIISW-IIc-1) 2. COMPUTE GROSS AND NET EARNINGS. (ABM_BMIISW-IId-2)...

GROSS AND MODULE 3 NET EARNINGS PRESENTED BY GROUP 3 AT THE END OF THIS MODULE, YOU ARE EXPECTED TO: 1. DEFINE SALARY, WAGE, INCOME, BENEFITS.(ABM_BMIISW-IIc-1) 2. COMPUTE GROSS AND NET EARNINGS. (ABM_BMIISW-IId-2) SALARY, WAGE, INCOME, AND BENEFIT 01 SALARY  SALARY IT IS A FIXED REGULAR PAYMENT TYPICALLY PAID ON A MONTHLY OR ANNUALLY BASIS SOMETIMES SALARIES ON AN ANNUAL BASIS IS CONVERTED INTO MONTHLY BASIS, WEEKLY TO MONTHLY, MONTHLY TO SEMI-MONTHLY.  SALARY WE MUST ALWAYS REMEMBER THE FOLLOWING: 1 YEAR = 12 MONTHS = 24 SEMI-MONTHLY = 6 BI-MONTHLY 1 YEAR = 52 WEEKS = 26 BI-WEEKLY 1 MONTH = 2 SEMI-MONTHLY SEMI-MONTHLY = ⅖ EVERY MONTH BI-MONTHLY = EVERY TWO MONTHS BI-WEEKLY = EVERY TWO WEEKS  LET US STUDY THE FOLLOWING CONVERSIONS, SUPPOSEDLY THE ANNUAL SALARY IS PHP 154,500.00 1. MONTHLY SALARY = ANNUAL SALARY/12 = 154,500/12 = PHP 12,875.00 2. SEMI-MONTHLY SALARY = ANNUAL SALARY/24 = 154,500/24 = PHP 6,437.50 3. WEEKLY SALARY = ANNUAL SALARY/52 = 154,500/52 = PHP 2,971.15 4. BI-WEEKLY SALARY = ANNUAL SALARY/26 = 154,500/26 = PHP 5,942.31 02 WAGE  WAGE A FIXED REGULAR PAYMENT RECEIVED BY A WORKER FOR LABOR OR SERVICES ACCORDING TO A CONTRACT THAT IS USUALLY ON A PIECEWORK, HOURLY OR DAILY BASIS.  PIECE RATE A WORKER EMPLOYED ON A PIECEWORK BASIS IS PAID IN PROPORTION TO THE QUANTITY OF WORK HE OR SHE FINISHES. 2 PLANS UNDER PIECE RATE: FIXED DIFFERENTIAL 01 PIECE-RATE 02 PIECE-WORK PLAN PLAN  FIXED PIECE-RATE PLAN THE RATE IS FIXED IRRESPECTIVE OF THE QUANTITY PRODUCED IN THIS PLAN, THE PAYMENT PER UNIT REMAINS THE SAME, PROVIDING A STRAIGHTFORWARD INCENTIVE FOR WORKERS TO INCREASE THEIR OUTPUT, BUT WITHOUT VARYING RATES BASED ON PERFORMANCE LEVELS. THIS STRUCTURE IS SIMPLE AND EASY TO UNDERSTAND FOR BOTH WORKERS AND MANAGEMENT.  EXAMPLE KIM IS WORKING IN AN ACCESSORY SHOP. SHE IS PAID ON A PER-PIECE BASIS AT THE RATE OF PHP 15.00 PER PIECE. IF SHE FINISHES 140 ACCESSORIES IN A WEEK, HOW MUCH IS HER TOTAL EARNINGS? TO SOLVE, LET’S FIND: 1. GIVEN 2. UNKNOWN 3. FORMULA 4. SOLUTION 5. FINAL ANSWER 6. CONCLUSION  GIVEN: RATE = PHP 15 PER PIECE QUANTITY PRODUCED = 140 PIECES (BASE) UNKNOWN: TOTAL EARNINGS = ?  FORMULA: TOTAL EARNINGS = QUANTITY PRODUCED × RATE SOLUTION: TOTAL EARNINGS = 140 × PHP 15 = PHP 2,100  FINAL ANSWER: TOTAL EARNINGS = PHP 2,100.00 CONCLUSION: THEREFORE, KIM’S TOTAL EARNINGS IF SHE FINISHES 140 ACCESSORIES IN A WEEK IS PHP 2,100.00  DIFFERENTIAL PIECE-RATE PLAN THE RATE GRADUALLY INCREASES AS THE QUANTITY PRODUCED ALSO INCREASES THIS PLAN INCENTIVIZES WORKERS TO INCREASE THEIR OUTPUT, AS THEY EARN MORE PER UNIT AFTER REACHING A CERTAIN THRESHOLD  EXAMPLE GRACE WORKS IN HER FRIEND’S BUSINESS WHEREIN SHE WAS TASKED TO REPACK AND SEAL GUMMY BEARS. SHE IS PAID ON THE FOLLOWING DIFFERENTIAL PAY PLAN SCHEDULE: EXAMPLE  EXAMPLE COMPUTE FOR GRACE’S TOTAL WAGE FOR THE WEEK IF SHE REPACKED THE FOLLOWING QUANTITIES:  FORMULA: TOTAL EARNINGS = QUANTITY PRODUCED × RATE UNKNOWN: GRACE’S TOTAL WAGE SOLUTION  SOLUTION TOTAL WAGE = 92+110.25+150.15 +193.60+231.15 TOTAL WAGE = PHP 777.15 CONCLUSION: THEREFORE, GRACE’S TOTAL WAGE FOR THE WEEK IS PHP 777.15  HOURLY OR DAILY BASIS IN THIS HOURLY WAGE PLAN, WORKERS ARE GUARANTEED A SPECIFIC WAGE FOR EACH HOUR WORKED, WITH ADDITIONAL COMPENSATION FOR OVERTIME. THIS STRUCTURE PROVIDES STABILITY AND PREDICTABILITY IN EARNINGS WHILE INCENTIVIZING LONGER HOURS WHEN NEEDED.  HOURLY OR DAILY BASIS ACCORDING TO THE ARTICLE 83 OF THE LABOR CODE, THE NORMAL HOURS OF WORK OF ANY EMPLOYEE SHALL NOT EXCEED 8 HOURS A DAY. FORMULA: DAILY PAY = NUMBER OF HOURS OF WORK ×HOURLY RATE  EXAMPLE SIMON WORKS IN A FACTORY THAT FACE HIM AN HOURLY RATE OF PHP 45.50. HOW MUCH IS HIS DAILY WAGE IF HE WORKS FOR 8 HOURS A DAY? TO SOLVE, LET’S FIND: 1. GIVEN 2. UNKNOWN 3. FORMULA 4. SOLUTION 5. FINAL ANSWER 6. CONCLUSION  GIVEN: HOURLY RATE = PHP 45.50 HOURS = 8 UNKNOWN: SIMON’S DAILY WAGE = ?  FORMULA: DAILY PAY = NUMBER OF HOURS OF WORK ×HOURLY RATE SOLUTION: DAILY PAY = 8 × PHP 45.50 = PHP 364.00  FINAL ANSWER: DAILY PAY = PHP 364.00 CONCLUSION: THEREFORE, SIMON’S DAILY PAY IS PHP 364.00 INCOME 03  INCOME THE MONEY EARNED BY WORKING OR THROUGH INVESTMENT.  EXAMPLES OF INCOME: 1. SALARY AND WAGES 2. COMMISSIONS 3. INCOME FOR PROPERTIES IF IT IS RENTED OUT 4. DIVIDEND INCOME FOR STOCKHOLDERS 5. PROFIT OF THE BUSINESS OWNED 6. ROYALTIES IF THEY ARE AUTHORS 7. INVESTMENT INCOME 8. RENTAL INCOME  BENEFITS IN THE PHILIPPINES GIVEN TO THE EMPLOYEES: 9. FREELANCE INCOME 10. GOVERNMENT BENEFITS 11. PENSION OR RETIREMENT INCOME  04 EMPLOYEE BENEFITS  EMPLOYEE BENEFITS A PAYMENT OF GIFT MADE BY AN EMPLOYER, THE STATE, OR AN INSURANCE COMPANY.  BENEFITS IN THE PHILIPPINES GIVEN TO THE EMPLOYEES: 1. VACATION PAY AND SICK LEAVES 2. MEDICAL AND HOSPITALIZATION BENEFITS 3. MEAL ALLOWANCE 4. TRANSPORTATION ALLOWANCE 5. CLOTHING ALLOWANCE 6. INCENTIVES PAY FOR PRODUCTIVITY 7. 13TH MONTH PAY  BENEFITS IN THE PHILIPPINES GIVEN TO THE EMPLOYEES: 8. MATERNITY LEAVE 9. PATERNITY LEAVE 10. SSS 11. PHILHEALTH 12. PAG-IBIG FUND GROSS AND NET EARNINGS EXAMPLE EXAMPLE  LET’S SUMMARIZE GROSS EARNINGS - TOTAL DEDUCTION = NET PAY E-D=N  GROSS EARNINGS THE TOTAL INCOME EARNED BEFORE ANY DEDUCTIONS, SUCH AS TAXES OR EXPENSES. FOR BUSINESSES, IT'S THE TOTAL REVENUE FROM SALES, AND FOR INDIVIDUALS, IT'S THE FULL AMOUNT OF COMPENSATION BEFORE TAXES OR OTHER WITHHOLDINGS. AMOUNT GAINED BY THE WORKER WITHOUT ANY DEDUCTION  NET EARNINGS THE INCOME REMAINING AFTER ALL DEDUCTIONS, SUCH AS TAXES AND EXPENSES, HAVE BEEN SUBTRACTED FROM GROSS EARNINGS. IT REPRESENTS THE ACTUAL PROFIT OR TAKE-HOME PAY. THE AMOUNT RECEIVED LESS DEDUCTIONS OF ANY EMPLOYEE  DEDUCTIONS THE AMOUNT HELD BY ANY AUTHORITY AS A FORM OF PAYMENT FOR SOME NECESSARY DUES LIKE TAXES, LOANS, HEALTH INSURANCES, ABSENCES, ETC.  EXAMPLE 1 WHO EARNS THE MOST? EMPLOYEE A, WHO EARNS P30,500 A MONTH EMPLOYEE B, WHO WORKS 40 HOURS A WEEK AT P176/HR EMPLOYEE C, WHO EARNS P350,000 ANNUALLY.  EXAMPLE 1 AN INSTRUCTOR GETS A BASE MONTHLY SALARY OF P35,000 AND A LIVING ALLOWANCE OF P2,000 PER MONTH. HOWEVER, THIS INSTRUCTOR HAS TO PAY P8,000 MONTHLY FOR HER LOAN AND P4,000 FOR ALL MANDATORY DEDUCTIONS. ON THE OTHER HAND, A PRIVATE TUTOR EARNS P330 PER HOUR FOR TUTORING A STUDENT. SHE WORKS 80 HOURS A MONTH AND A DEDUCTION OF P91,000 MONTHLY DUES IS BEING SUBTRACTED FROM HER PAY. WHO BETWEEN THE TWO HAS A HIGHER TAKE-HOME PAY? ANY QUESTIONS? THANK YOU!