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Ways of Service Payment

I. Salary and Wage

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 (bimonthly) while wage earners usually get paid either weekly or sometimes even
monthly at their employer's convenience.

2. 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.

3. Give examples to emphasize the difference between 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?

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

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?

b. An employee is paid a monthly salary of P16,000 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?

II. Income and Benefits

Suggestion before definitions: Explain to the students that a basic wage or salary is not the only compensation that an employee receives.
For most employees, they also get social insurance, for example; GSIS for government employees and SSS for employees in the private

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

Some sources of income:

1. Farmers, fishermen and vendors earn income by providing goods such as crops, fish and vegetables.
2. Individuals may earn income by investing their capital in stocks, mutual funds or bank deposits.

B. Define benefit.
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.

1. Cash Benefits
- 13th month pay, bonuses, rice subsidy, transportation allowance

2. Non-cash benefits
- SSS/GSIS, Pag-ibig, Philhealth