Payroll comprises employee compensation like wages, commissions, earnings, overtime pay, bonuses and pay rates. Compensation refers to all remuneration for services by an employee under an employer-employee relationship. The Wage Rationalization Act mandates minimum wages for different sectors. Minimum wage earners are not subject to tax withholding on their statutory minimum wage including holiday pay, overtime pay, night differential and hazard pay. Statutory monetary benefits employers must provide include minimum wage, holiday pay, overtime pay, night differential and 13th month pay.

3. PAYROLL
•Comprises of employee compensation, wages, commission, earnings,
overtime, performance bonuses, pay rates, and many more.

4. PAYROLL
• COMPRISES OF EMPLOYEE COMPENSATION, WAGES, COMMISSION, EARNINGS,OVERTIME, PERFORMANCE
BONUSES, PAY RATES, AND MANY MORE.

5. COMPENSATION OR WAGES
•Refers to all remuneration for services performed by an employee for his
employer under an employer-employee relationship, unless exempted by
the NIRC and pertinent laws.

6. MINIMUM WAGE
•Republic Act no. 6727 or the “Wage Rationalization Act” mandates the
fixing of the minimum wages applicable to different industrial sectors,
namely, non-agriculture, agriculture plantation, and non-plantation,
cottage/handicraft, and retail/service, depending on the number of
workers or capitalization or annual gross sales in some sectors.

7. MINIMUM WAGE
•No withholding tax shall be required on the Statutory Minimum Wage
(SMW) of a Minimum Wage earner in the private/public sectors as defined
in RR 2-98, as amended by RR 11-2018, including:
• Holiday Pay
• Overtime Pay
• Night Shift Differential
• Hazard Pay

12. STATUTORY MONETARY BENEFITS
• Also known as mandatory benefits, are entitlements that employers are obligated by
law to provide to their employees. Under the Labor Code of the Philippines, employees
are entitled to monetary benefits such as:
▪Minimum Wage
▪Holiday Pay
▪Overtime Pay/Premium Pay
▪Night Shift Differential
▪13th Month Pay

13. EXCEPTIONS
✓ Government employees
✓ Establishments employing not more than five (5) workers
✓ Kasambahay
✓ Managerial employees
✓ Members of a managerial staff
✓Field officers
✓ Contract-based workers
✓ Commission-based workers

14. WHAT IS MINIMUM WAGE?
•The minimum amount of remuneration that an employer is required to pay
wage earners for the work performed during a given period, which cannot
be reduced by collective agreement or an individual contract
Purpose:
The purpose of minimum wages is to protect workers against unduly low
pay.

15. BASIS FOR MINIMUM WAGE RATES
• Normal working hours of 8 hours/day

16. HOLIDAY PAY
•The employee will receive the normal daily rate even if they did not come to
work during the regular holiday provided that they are present or if they filed a
leave with pay during the work day before the holiday.
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17. HOLIDAY PAY
•Every employee covered by the holiday pay rule is entitled to the
minimum wage rate. This means that the employee is entitled to at least
100% of his/her minimum wage rate even if he/she did not report for work,
provided he/she is present or is on leave of absence with pay on the work
day immediately preceding the holiday.

18. HOLIDAY PAY
•Every employee covered by the holiday pay rule is entitled to the
minimum wage rate. This means that the employee is entitled to at least
100% of his/her minimum wage rate even if he/she did not report for work,
provided he/she is present or is on leave of absence with pay on the work
day immediately preceding the holiday.

19. REGULAR HOLIDAY
If the work is performed on a regular holiday that is also a rest day, the employee gets a
total of 260%.

20. REGULAR HOLIDAY
If the work is performed on a regular holiday that is also a rest day, the employee gets a
total of 260%.

21. ACTIVITY
1. Bethany worked 8 hours during Araw ng Kagitingan, April 10, Monday. How much will
she receive if her daily rate is P435.00?
2. Andrea receives a daily rate of P870.00. Her normal work schedule is from Monday to
Friday, 8AM-5PM. However she was asked to work on Saturday. She came in at 8AM and
went off from work at 12PM. How much will she be paid for Saturday?

22. ACTIVITY
3. Labor Day is commemorated every May 1. Mathew worked during that day since his
employer needed him to finish his remaining work loads. But it was supposed to be his rest
day. How much will he earn from working on May 1 with a P610.00 basic wage?
4. Eid’l Adha was celebrated last June 28, 2023. Bilha didn’t show up for work as she is a
Muslim and this holiday is very sacred to them. Will she still be paid if she filed a leave with
pay on that day? How much will she receive, then, if she earns P800.00 per day?
5. National Heroes Day is commemorated every August 28. Aug. 28 falls on Wednesday.
Mark filed for a leave with pay for August 27, Tuesday. How much will he receive if his
employer asked him to work on August 28 if his daily rate is P435.00? How much will he
receive for August 27?

23. PREMIUM PAY
•Employees are eligible to receive premium pay for working on their rest
days or special holidays. If an employee needs to work on their rest day
or special day, they receive an extra 30% of their daily salary.

24. PREMIUM PAY
•Employees are eligible to receive premium pay for working on their rest
days or special holidays. If an employee needs to work on their rest day
or special day, they receive an extra 30% of their daily salary.

25. ACTIVITY
1. Mandy receives a daily rate of P570.00. She was asked to work during Osmena Day.
How much will she be paid for that day?
2. EDSA People Power Revolution was commemorated last February 24. Annie worked
during that day but it was supposed to be her rest day. How much will she earn from
working on that day with a P1,011.00 basic wage?
3. June, an instructor in a private elite academy was asked to work on All Souls Day,
November 2 from 7am-4pm, not including 1-hour lunch break. How much will they be
earning for that day if her daily rate is P610.00?

26. OVERTIME
•If an employee works more than eight hours on an ordinary workday, they
are entitled to an extra 25% of their average hourly rate.

27. OVERTIME
•If an employee works more than eight hours on an ordinary workday, they
are entitled to an extra 25% of their average hourly rate.

28. OVERTIME
•If an employee works more than eight hours on an ordinary workday, they
are entitled to an extra 25% of their average hourly rate.

29. ACTIVITY
• Oli receives a monthly rate of P475.00. Her normal work schedule is from Monday to
Fridays, 8AM-5PM, not including 1-hour lunch break. She was requested to work
Overtime on Wednesday from 5PM-8PM. How much is her total pay for that day?
• Maria’s normal work schedule is from Friday-Wednesday, 7AM-4PM. However, she was
asked to work on Thursday from 7AM-4PM. She rendered Overtime from 4PM-8PM.
How much will be her total pay if her daily rate is P610.00?
• Kate worked from 5PM-7PM during Independence Day, June 12. Her daily rate is
P870.00. How much will she receive during the holiday including her overtime giving that
the holiday falls on her normal work schedule of 8AM-5PM?

30. ACTIVITY
• Eric was asked to work on December 8, Friday, during the Feast Day of the Immaculate
Concepcion from 8AM-5PM. However, this was supposed to be his Rest Day. He also
rendered overtime from 5PM-9PM to finish his backlogs. How much will he receive if his
daily rate is P570.00?
• George’s normal work schedule is from Monday-Fridays. He was asked to work on
Saturday from 8AM-12PM during the company’s standard operating hours. He stayed
and continued working from 1PM-3PM. How much will he receive on Saturday if his daily
rate is P1,089.00?

31. NIGHT SHIFT DIFFERENTIAL
•The labor laws of the Philippines make it mandatory to pay night shift
differential to the workers working between 10PM to 6AM. The nightshift
differential must not be less than 10% of the worker's regular salary.

32. NIGHT SHIFT DIFFERENTIAL
•The labor laws of the Philippines make it mandatory to pay night shift
differential to the workers working between 10PM to 6AM. The nightshift
differential must not be less than 10% of the worker's regular salary.