BUSINESS MATHEMATICS

STUDY GUIDE, DEFINITIONS, & NOTES

SALARY, WAGE, INCOME

Wage earner - an employee who is paid by the hour

Salary & wages - vary depending on the nature of work, location of work, and time

NP = GP - TD

Total Earnings / Gross Earnings - amount gained by the worker w/o any deductions,
such as taxes, benefits, loans, and other possible deductions
Net - payment received fewer deductions of any employee

Let
E = total earnings
D = total deductions
N = monthly net

Formulas:
E=D+N
N=E-D
D=E-N

WAGE & COMPENSATION BENEFITS

Premium Pay - overtime pay for the rest days & official holidays

1. Regular Holidays - fixated dates like Christmas, independence, new year’s day,
and national heroes day despite changing dates
2. Special Holidays - aka special non-working holidays. fall on flexible dates,
depending on the circumstance. Ex: ASEAN summit / regional events: festivals &
class suspension. Proclaimed by the president or LGUs in specific regions
3. Double Holidays - rare occurrence wherein RH & SH fall on the same day

All employees are eligible for premium pay, but normally, the slots for working on
holidays / rest days are scheduled in advance & approved by authorized personnel.
Night Shift Differential - aka nightshift pay. This applies to employees who work
between 10:00 pm & 6:00 am. An additional 10% premium is applied for every hour at
work
13th Month Pay - often mistaken as a Christmas bonus but is a monetary bonus
mandated by law. Given either in 2 installments (May & December) or in or before
Dec 24
Separation Pay - also part of the Labor Code and is given to employees terminated
from the company, exception: crime involvement & misconduct

1. 1/2 Month Pay per Year of Service - Value of 1/2 month pay for every year of
service if the separation from the service is because of retrenchment to save the
company from pitfalls & grave illness incurable within 6 months or harmful for
workers
2. One-month Pay per Year of Service - worth one month per year of service if the
termination of the contract is because of redundancy or when there is
excessive manpower
3. Retirement Day - upon the age of 60 years +, an employee who has served at
the establishment for at least 5 years may be granted a retirement pay
equivalent to at least 1/2 month of salary

LEAVE BENEFITS

Service Incentive Leave - an article of the Labor Code says that an employee who
has worked for a year is entitled to 5 SILs w/ full pay
Parental Leaves

● Maternal
● Paternal
● Solo Parent

Special Leave Benefits for Women

● Vacation / Sick Leave

● Magna Carta for Women
● Victims of Violence

Bereavement Leave - leave take

De Minimis Leave - relatively small monetary value / sick leave
COMPUTATIONS FOR OVERTIME PAY

Article 83 of the Labor Code enunciates that the normal hours of work of any
employee shall not exceed 8 hrs / day. This is exclusive of the 1 hr lunch break
Article 85 provides that subject to such regulations as the secretary of labor may
prescribe, it shall be the duty of every employer to give his/her employees not less
than 10 mins time off for their regular rate

Overtime Pay - employees who work more than the required number of hours are
entitled to overtime pay. Overtime Premium refers to the excess payment over the
regular rate

Overtime Premium on an Ordinary Day

Article 87 provides that work maybe performed beyond 8 hrs / day provided
that the employee is paid for the overtime work an additional compensation equivalent
to his regular wage plus at least 25% thereof

Overtime Premium on Rest Day or Special Holiday

Article 93 provides that when an employee is permitted to work on his/her
scheduled rest day he/she shall be paid an additional compensation of at least 30%
of his/her regular wage. For the week performed on Sunday only and on a special day
like Maundy Thursday or Goof Friday.
Article 87, 30%

Overtime Premium on Rest Day which falls on a Special Holiday

Article 94 provides that work on a rest day which falls on a Special Day shall be
paid 150% of the regular hourly rate

Overtime Premium on a Regular Holiday

Article 94, 200%

Overtime Premium on Rest Day which falls on a Regular Holiday

Article 94, 260%