The fundamental operations of mathematics as applied in salaries and

wages

Learning Competency:
• Define salary, wage, income and benefits.
ABM_BM11SW-IIc-1
• Compute gross and net earnings.
ABM_BM11SW-IId-2

Maypangdan National High School

Barangay Maypangdan, Borongan City, E. Samar 1
https://www.facebook.com/maypangdannhs
Name of Learner:
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LEARNING ACTIVITY SHEET IN BUSINESS MATHEMATICS (week 3)

Directions/ Instructions

This module is good only for one week as per MELC. All problems contained herein are related
to the skills and competency you are about to learn for this semester. Answer all questions honestly.
Write your solution in a separate sheet of intermediate pad when necessary. If you have any question
regarding the lesson, please drop a comment in our FB group page or ask question directly to your
teacher.

Background Information for Learners

In your previous lesson you have studied how to solve problems involving interest and commission.
Some examples are given for you to have a clearer picture of the actual representation of the lesson in
real life scenarios.

This week, you are about to learn and probably be able to define in your own words and understanding
what WAGE, INCOME AND BENEFITS is and later you will also learn how to compute GROSS
INCOME and NET EARNING.

Define Salary and wage

Salary is the compensation usually quoted annually or monthly for an employee. Wage, on the other
hand, is compensation quoted in an hourly or daily rate for an employee.

Salary earners usually get paid every 15 days (bi-monthly) while wage earners usually get paid either
weekly or sometimes even monthly, at their employer's convenience.

Salary earners are not paid less if they work for only a fraction of the required number of hours and they
are also not paid for working overtime while wage earners are under the “no work, no pay policy” which
means they are only paid the actual number of hours or days that they worked.

Difference of wage and Salary

Activity examples:

1. Dan was hires as a barber in their community barber shop. His employer is paying him Php
45.00 per hour. How much does he earn for a 4 hours work?

Solution: Php 45.00 x 4 = Php 180.00

This means Dan’s employer is paying him Php 180.00 for Dan’s 4 hours wage.

2. Roger was hired as factory production crew. He was promised of Php 16,000.00 as is monthly
salary. How much is Roger’s wage semi-monthly?

Solution: semi-monthly = 15 days

16,000 / 30 days = 533.33 this is Roger’s daily salary
533.33 x 15 = 7,999.95 this is the salary of Roger every 15 day of the month.

a. A tutor who is paid PhP200 per hour is earning a wage. How much does he earn for a 10-hour
week work?

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 b. A university assistant professor is usually given a monthly salary. If his salary is PhP40,000 per
month, how much does he get every two weeks?
c. A fast food service crew is paid per hour. If he is paid an average wage of PhP77.43 per hour,
how much will he get if he works for 6 hours and 6 days a week for 4 weeks?
d. A minimum wage earner in Metro Manila is paid PhP481 for an 8-hour workday. What is his
hourly wage?
e. A carpenter is paid daily, usually PhP500– PhP600 per day and is a wage earner. A taxi driver
and a tricycle driver are neither salary nor wage earners. Why?

Remark: The daily or hourly wage of an employee can be computed from his monthly salary.

Examples:
a. A clerk earns a salary of PhP20,000 per month. Assuming that he works 8 hours a day for a 20-
day work month, how much does he get per day? per hour? ( Solution: He is earning a wage of
PhP1,000 per day and PhP125 per hour.)

b. An employee is paid a monthly salary of PhP16,000 for working 20 days in a month. A taxi driver
earns PhP750 per day. Assuming both work 8 hours a day, who has a higher hourly wage? (
Solution: Employee: 16,00020=800 per day; 8008=100 per hour, Taxi Driver: 7508=93.75 per
hour Therefore, the employee has a higher hourly wage rate.)

Income and Benefits

The purpose of investing into a business is to gain income. The sources of income of a person varies on
the trade, services, business, bargain, etc. he is into. For example, a fisherman, gain income buy selling
his produce from fishing in the ocean. Individuals may earn income by investing their capital in stocks,
mutual funds or bank deposits.

Income is money that an individual receives in exchange for providing a good/service or through
investing capital.

Benefit is employee compensation given by an employer on top of the basic salary/wage. Note that
benefits may come in the form of cash or in kind.

Examples: 1. Cash Benefits: 13th month pay, bonuses, rice subsidy, transportation allowance
2. Non-cash benefits: SSS/GSIS, Pag-ibig, PhilHealth.

An individual who engages into business or trading is expecting some amount of money as gain
from his business activity. The gross income of an individual refers to the total amount he/she earned
before deductions are made. Other adjustments may be payment for loans, etc.

Example:
1. How much is the gross income of a public-school teacher who has a monthly salary of
PhP20,000, with a living allowance of PhP2,000?

Solution: A teacher who gets a basic monthly salary of PhP20,000 and a living allowance of
PhP2,000 per month has an annual gross income of (20,000 x 12) + (2,000 x 12)=PhP264,000.
This means a public-school teachers gross income for a year costs PhP264,000

Gross income are subject to mandatory deduction such as tax remittance etc. A gross income less the
over-all deduction of the benefits against person salary is what we call net income.

Net Income
The net income of an individual is the difference between his/her gross income and
deductions. Example of deductions applicable are income tax, SSS or GSIS contributions,

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 PhilHealth and Pag-ibig contributions. The deductions can be a fixed amount or a percentage of the
basic salary.

Example: A teacher who gets a basic monthly salary of PhP20,000 and a living allowance of
PhP2,000 per month has an annual gross income of (20,000 x 12) + (2,000 x 12)= PhP264,000.

Suppose this teacher has to pay every year PhP22,500 for income tax, PhP4,500 for PhilHealth,
PhP1,200 for Pag-ibig and PhP6,975.60 for SSS contributions, then his annual net income is
264,000 – (22,500 + 4,500 + 1,200 + 6,975.60)
=PhP228,824.40.

Exercises/Activity:

Instruction: Answer the following questions. Write your solution (if it is required) using an intermediate
pad. No solution, no point.

Salary and Wage

a. A tutor who is paid PhP200 per hour is earning a wage. How much does he earn for a 10-hour
week work?

b. A university assistant professor is usually given a monthly salary. If his salary is PhP40,000 per
month, how much does he get every two weeks?
c. A fast food service crew is paid per hour. If he is paid an average wage of PhP77.43 per hour,
how much will he get if he works for 6 hours and 6 days a week for 4 weeks?
d. A minimum wage earner in Metro Manila is paid PhP481 for an 8-hour workday. What is his
hourly wage?
e. A carpenter is paid daily, usually PhP500– PhP600 per day and is a wage earner. A taxi driver
and a tricycle driver are neither salary nor wage earners. Why?

Gross Income and Net Income

a. What is the gross income of a policeman who gets a basic salary of PhP25,000, a living
allowance of PhP2,500 per month and a hazard pay of PhP12,000 per year?

b. What is the gross income of a university professor who has a basic monthly salary of PhP80,000,
a living allowance of PHP2,000 per month, who also has an investment of PhP500,000 which
earns an interest of 6% per year?

c. What is the gross income of a minimum wage earner in Metro Manila who is paid PhP481 for an
8-hour workday if he works for 22 days in one month?

d. What is the net income of a policeman who gets a basic salary of PhP25,000 per month, a living
allowance of PhP2,500 per month and a hazard pay of PhP12,000 per year? Suppose this
policeman has to pay annually PhP25,000 for income tax, PhP4,500 for Philhealth, PhP1,200 for
Pag-ibig and PhP27,000 for GSIS contributions.

e. What is the net income of a university professor who receives a basic monthly salary of
PhP80,000, a living allowance of PhP2,000 per month, and has an investment of PhP500,000
which earns an interest of 6% per year. Suppose this university professor has to pay each year
PhP245,880 for income tax, PhP12,000 for Philhealth, PhP1,200 for Pag-ibig and PhP86,400 for
GSIS contributions?

f. What is the net income of a minimum wage earner in Metro Manila is paid PhP481 for an 8-hour
workday. If he works for 22 days in one month? A minimum wage earner is exempted from

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 paying income tax. Suppose his deductions per month are PhP100 for Pag-ibig, PhP200 for
PhilHealth and PhP363.30 for SSS?

Define the following:

a. What is salary. (5 pts)

b. Define wage. (5 pts)
c. How do wage and salary differ? (5 pts)
d. What is gross income? (5 pts)
e. What is net income? (5 pts)
f. How do gross income and net income differ? (5 pts)

Reflection: Write what you have learned so far from this lesson. Think how this will benefit you as a
student in times of pandemic.
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References for learners

Answer Key

Prepared by

Rodolfo N. Manacho
Teacher