Group 5
Business mathematics
1. Salary, Wage, Income, And benefits
2. Gross Income, And Net Income
Learning Objectives
At the end of the lesson, you should be able to:
1. Define, salary, wage, income and benefits
2. Solve problems related to salary and wage
Ways Of Service Payment
Salary
The Compensation is a fixed amount of money for each time
period worked
Salaried employees are paid the same amount every pay
period
The amount is determined usually in a contract which signed
before employment starts
Wage
The compensation quoted in an hourly, daily or weekly rate for
an employee
The employee is paid at a regular rate for a stated minimum
number of hours (regular hours) and a higher rate for extra
hours worked (overtime hours)
Wage earners even paid more per hour when working on
Holidays, Sundays, Evenings, etc.
Minimum Wage
Refers to the lowest amount of money you are allowed to be
paid for one hour of work as defined by law
The minimum wage rate is based on the regular working hours
of eight hours a day
Those who are hired for a
specific project only
Those who are hired for the
purpose of hiring them
permanently as their skills
are needed for the continued
operation of the company
Example 1 Salary
A university assistant professor is usually given a monthly salary.
if his salary is Php 40,000 per moth, how much is his annual
salary?
Solution: If he gets Php 40,000 per month as his salary,
then his annual salary is
Php 40,000 x 12 months = Php 480,000
Example 2 Salary
A clerk earns a salary of Php 20,000 per month. Assuming that
he works 8 hours a day for 20-days work month, how much does
he get per day?
Solution: If a clerk earns Php 20,000 per month as
salary, then he gets
Php 20,000 / 20 days = Php 1,000 per day
Wage
A school cleaner is paid per hour. If he is paid an
average wage of Php 55 per hour, how much will he get
if he works for 8 hours and 5 days a week for 4 weeks?
Solution: If the cleaner works for 8 hours a day, he earns
Php 55 x 8 = Php 440 a day.
In 5 days a week, Php 440 x 5 = Php 2,200 a week.
In 4 weeks or in a month, the cleaner gets
Php 8,800
Income
Money that an individual receives in exchange for providing a
good/service or through investing capital
Some sources of income
I. Farmers, fisherman and vendors earn income by providing
goods such as crops, fish and vegetables, respectively.
II. Individuals may earn income by investing their capital in
stocks, mutual funds or bank deposits.
Benefit
Employee compensation given by an employer on top of the
basic salary/wage
Benefits may come in the form of cash or in kind.
Example:
1. Cash benefits: 13th month pay, bonuses, rice subsidy,
transportation allowance
2. Non-cash Benefits: SSS/GSIS, Pag-ibig, PhilHealth
Learning Objectives
At the end of the lesson, you should be able to:
Differentiate gross from net income
Compute gross and net income
Gross Income
Refers to the total amount an individual earned before
deductions are made
Also called as total earning or total pay
Gross income = adding all income received
Net Income
Refers to the amount earned by any person from the gross
earnings less the total deductions
Examples of deductions: income tax, SS or GSIS, PhilHealth
and Pag-ibig contributions.
The deduction can be a fixed amount or a percentage of the
basic salary.
Net Income = Gross income - total deductions.
Gross Income
A company secretary gets a basic monthly salary of Php 18,000
and a transportation allowance of Php 2,000 per month. How
much is his annual gross income?
Solution
Basic salary = 18,000 x 12 = 216,000
Transportation allowance = 2,000 x 12 = 24,000
Annual gross income = 216,000 + 24,000 = Php 240,000
Php 240,000 is the annual gross income of the company
secretary.
Gross Income
A minimum wage earner in metro manila is paid Php 481 for an 8
hour workday. If he works for 20 days in one month, then how
much will be the monthly gross income?
Solution
Php 481 x 20 days = Php 9,620
Php 9,620 is the monthy gross income of a minimum wage
earner.
Net Income
A minimum wage earner in Metro Manila is paid Php 481 for an 8 hour
workday and he is exempted from paying income tax. If he works for 20 days
in one month and suppose his deductions per month are Php 100 for Pag-
ibig, Php 200 for PhilHealth and Php 370 for SSS. How much is his monthly
net income?
Solution
Monthly Gross income = Php 481 x 20 days = Php 9,620
Total Deductions = 100 + 200 + 370 = Php 670
Monthly Net Income = Php 9,620 - Php 670 = Php 8, 950
Php 8,950 is the annual net income of a minimum wage earner.
Identify if SALARY or WAGE
1.)The employee is paid at a regular rate for a stated minimum
number of hours and a higher rate for extra hours worked
2.) It has an hourly basis for payment
3.) The Compensation is a fixed amount of money for each time
period worked
4.) A fixed pay given to an individual on a monthly/ an annual
basis for the work done by him/her
Problem Solving (1 whole yellow paper)
1.) A minimum wage earner in Metro manila is paid Php
537 for an 8 hour workday. What is hourly wage?
2.) A fast food service crew is paid per hour. If he is paid
an average wage of Php 77.43 per hour, how much will
he get if he works for 6 hours and 6 days a week for 4
weeks?
Problem Solving (1 whole yellow paper)
3.) A policeman gets a basic salary of Php 25,000 per
month, a living allowance of Php 2,500 per month and a
hazard pay of Php 12,000 per year. How much is his
annual gross income?
Identify if SALARY or WAGE
1.)The employee is paid at a regular rate for a stated minimum number of hours
and a higher rate for extra hours worked
Wage
2.) It has an hourly basis for payment
Wage
3.) The Compensation is a fixed amount of money for each time period worked
Salary
4.) A fixed pay given to an individual on a monthly/ an annual basis for the work
done by him/her
Salary
Answers
1.) A minimum wage earner in Metro manila is paid Php
537 for an 8 hour workday. What is hourly wage?
Php 67.125 per hour
2.) A fast food service crew is paid per hour. If he is paid
an average wage of Php 77.43 per hour, how much will
he get if he works for 6 hours and 6 days a week for 4
weeks?
Php 11,149.92 for 4 weeks
Answers
3.) A policeman gets a basic salary of Php 25,000 per
month, a living allowance of Php 2,500 per month and a
hazard pay of Php 12,000 per year. How much is his
annual gross income?
Php 342,000 is the policeman's annual gross
income.
