Chapter 1
Chapter 1
1 Salary V.S. Wages
SALARY - fixed, regular payment of an employer to an employee.
WAGES - form of monetary compensation paid by an employer to an employee in exchange for work.
Minimum Wage - lowest legal enumeration employers can pay workers.
Are forms of compensation received by employees in exchange for their services.
PAY FREQUENCY
Pay frequency or payroll frequency refers to the schedule an employer uses to pay an employee.
COMMON PAY FREQUENCY
1. Biweekly
- employees are paid every two weeks on the same day of the week.
- Paychecks per year: 26 (if leap year: 27)
2. Semimonthly
- employees are paid on specific fixed dates twice a month.
- Paychecks per year: 24
3. Weekly
- Employees are paid once a week.
- Paycheck per year: 52
4. Monthly
- Employees are paid once a calendar month
- Paychecks per year: 12
CALCULATING WAGES FOR SALARY
Payment from annual salary and hourly wage. The annual salary can be paid P as follows:
- Weekly Payment: P = s/52
- Monthly: P = s/12
- Semimonthly: P = s/24
- Biweekly: P = s/26 (27 if leap year)
If hourly rate is H, the wage W, can be paid as follows:
- Weekly wage: W = H x n, where n is the number of hours.
OVERTIME PAY
OVERTIME PAY
Overtime pay is the extra compensation an employee earns for working beyond the standard contracted hours (typically beyond 8 hrs a day or 40 hrs a week).
EX. 1: A worker is paid a regular hourly rate of ₱ 93, and is paid one and a half times for overtime hours. If he works 40 hrs at regular rate and 5 hrs of overtime time, how would he earn for working 40 hr week? What is the total pay for a week?
STEP 1: Calculate the regular pay. Multiply the regular hourly rate by the number of regular hours worked.
STEP 2: Calculate overtime rate. Multiply the regular hourly rate by 1.5.
STEP 3: Calculate overtime pay. Multiply the overtime rate by the number of overtime hours.
STEP 4: Calculate total pay. Add the regular pay and the overtime pay.
EX. 2: