It’s been said that a company’s greatest asset walks out the door at the end of each workday. Given the crucial role manpower plays in business, employee welfare has been enshrined in law through mandatory benefits from employers. Show
If you’re planning on starting a business, knowing these benefits can help you better plan your finances. Below is a quick overview of said entitlements: CompensationMinimum wage: Any employee who works at least 40 hours per week is entitled to receive at least minimum wage. In the NCR, that’s P537.00 per day but rates vary per region. Overtime pay: Employees who work beyond the standard eight hours are to receive a 25% premium on top of their regular wage. Premium pay: If an employee must work on his assigned rest day, he will receive a 30% premium on his usual wage. If the rest day also coincides with a holiday, the premium shall be 50%. Night differential: Working between 10 p.m. and 6 a.m. shall merit a 10% premium for each hour rendered. 13th month pay: Employees must receive an extra month’s worth of basic wages on or before December 24th. Resigned employees are also entitled to a 13th-month pay but on a pro-rated basis. Separation pay: An employee who departs from a company under reasonable conditions can claim a separation pay. This does not apply if the employee is terminated due to misconduct or illegal actions. Retirement pay: Employees who reach 60 years old and have served for at least five years will receive a retirement pay amounting to half a month’s salary for each year of service. LeavesMeal breaks: Employers must give workers 60 minutes per day for regular meals. Service incentive leaves: Employees shall be given five service incentive leaves per year. These may be used as either vacation or sick leaves. Maternity leave: Paid maternity leave has been extended to 105 days, seven of which are transferable to fathers as paternity leave. Single moms are entitled to an additional 15 days of paid leaves. Paternity leave: Married fathers can file for 7 days of paid paternity leave to assist their spouse. Special leaves for females: Female employees who undergo gynecological surgery will get up to two months of paid leaves. Victims of violence against women and their children get 10 paid leave credits. ContributionsSocial Security System (SSS): The current rate is 11% of basic monthly salary, with a cap of P16,000. Employers pay 7.37% while employees cover the remaining 3.63%. Home Development Mutual Fund (Pag-IBIG): Contribution amounts to P100 each month. Philippine Health Insurance Corporation (PhilHealth): Depending on the employee’s salary, contributions can range from P175 to P875 per month. While these benefits might seem daunting at first, remember that these are all meant to keep employees happy and loyal to your firm. For more guidance on these benefits or on starting a business, don’t hesitate to get in touch with Duran & Duran-Schulze at (+632) 478 5826 or via . Our team looks forward to answering any questions you may have about corporate legal requirements. 14 min read In any company, whether big or small, the greatest asset is the people. The company wins when they perform well, and the company suffers if they don’t. Types of Employee BenefitsWhen you are employed, you are entitled to various benefits that can be summed up into three categories: employee minimum wage and additional pays due to varying factors like holidays or overtime, leave benefits which are paid absence from work, and mandatory government contributions. Each one will be elaborated below. Wage and compensations Benefits1. Employee minimum wage*
2. Overtime payThe employee who renders service beyond the schedule indicated in the contract will be given additional compensation equivalent to his regular wage including at least 25% premium.
3. Premium PayA premium pay is an overtime pay for rest days and official holidays. Employee shall be paid an additional compensation from the rate of the first eight hours on a holiday or rest day plus at least 30%. There are three types:
All employees are eligible for premium pay, but normally, the slots for working on holidays or rest days are scheduled in advance and approved by authorized personnel. Now, how do you compute for premium pay? Computation differs for each type. Please, refer below:
4. Night Shift DifferentialAlso known as night shift pay, it applies to employees who work between 10:00 PM and 6:00 AM. The following are eight types of NSD:
5. 13th Month PayThe 13 month pay is often mistaken as the Christmas Bonus, but technically, it’s a monetary bonus mandated by law. The Christmas bonus is only a voluntary gesture from the employers. According to the law, the 13 month pay is given either in 2 installments (May and December) or in full before December 24. You can receive this pay if you are any private employee with fixed or guaranteed salary who have worked for at least one month. Resigned or terminated employees who left their employers before the release of the 13 month bonuses can also receive this. Take note that employees who quit the job without going through the separation process and workers who are paid purely on commission are not entitled for 13 month pay. How do you compute the amount you’ll receive? It depends on your basic pay times the number of months you rendered for the whole year and divided by 12. Example: In case of perfect attendance, the employee will get the full monthly salary for 13th month pay. Generally, it’s a bonus amounting to one month of basic pay.
If ever you wondered why you receive different rates of 13 month bonus, that’s because it is pro-rated. It means that the amount of pay will be adjusted to the total time you rendered the services. As a result, what you will receive may not be the same with your monthly basic pay and may differ from other employees because of variables. Absences or unpaid leaves will be deducted from the basic salary before being divided by 12. Also, other benefits on top of your basic pay like unused credit service incentive leaves, overtime, premium, night differential, and allowances are not part of the computations. Deduction from the bonus is possible to cover the upcoming tax deficits. The 13 month pay is basically not taxable, except for the amount of P82,000. Under the new TRAIN law, tax exemptions now cover the rate of P90,000. 6. Separation paySeparation pay is also part of the Labor Code and is given to employees terminated from the company. The only exception are those terminated because of misconduct or crime involvement. There are two types:
7. Retirement payUpon the age of 60 years or more, an employee who has served at the establishment for at least five years may be granted a retirement pay equivalent to at least one-half month of salary for every year of service. A fraction of at least six months is considered as one whole year. As stipulated by the DOLE National Wages and Productivity Commission, “The minimum retirement pay shall be equivalent to one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one (1) whole year.” Included in the one-half pay are 15 days salary based on the latest salary rate, cash equivalent of 5 days of service incentive leave, one-twelfth (1/12) of the 13th month pay. How to compute the pension: (1/12 x 365/12 = .083 x 30.41 = 2.5) Minimum Retirement Pay = Daily Rate x 22.5 days x number of years in service Increase your chances with 20+ banks and lenders As low as 1.3% monthly interest Apply NowLeave benefits1. Service Incentive LeaveArticle 95 of the Labor Code says that an employee who has worked for a year is entitled to five (5) SILs with full pay. These can be used for vacation leave or sick leave. 2. Parental leavesThere are 3 types of parental leaves:
3. Special Leave Benefits for WomenThere are two types:
4. Bereavement LeaveThis is a 3 days additional time off from work to mourn for the death of immediate family members such as mother, father, siblings, and children. It must be noted that this is not a paid leave. 5. De Minimis BenefitsThese are either relatively small amounts of money or leave credits that are optional for employers to grant. Examples are calamity leave, rice subsidy, transportation/clothing/laundry allowance, daily meal allowance, other goods that are not monetary. Mandatory government contributionsThe following government contribution will be automatically deducted from regular employees based on their salary: 1. SSSThe Social Security System serves as an insurance program set by the government for all wage earners from the private institutions (the counterpart for government employees is GSIS) in the country. Members are required to contribute a certain amount depending on their salary bracket. Generally, your monthly contribution is a shared payment between you (EE) and your employer (ER): ER – 7.37% of the total contribution EE – 3.36% of the total contribution (deducted from the salary). Example: refer to the table. If you earn P14,437 per month, your salary credit according to the table is deemed as P14,500. Your employer will pay P1,160 (7.37%) – on top of that is the additional fee of P10 – amounting to P1,170. Adding the remaining P580 (3.63%) from you, the table shows that your total contribution per month is P1740. To check your contributions online, you need to create an account at My.SSS and have it validated by SSS personnel. You can also view your membership records, file salary loan application, or schedule appointments. The benefits given by SSS are for sickness, maternity, disability, retirement benefit (pension), death cash grant, funeral grant, and salary loan. 2. PhilHealthThis serves as a health insurance program for private employees providing financial aid and service privileges for health care. PhilHealth has removed the previous salary brackets, creating a new condensed contribution table with P10,000 as the salary floor and P40,000 as the ceiling. The computation starts at 2.75% of the basic salary per month, and the payment is shared by employer and employee. The PhilHealth benefits include:
3. Pag-IBIGAlso known as the Home Development Mutual Fund (HDMF), Pag-IBIG is another form of national savings program and the financing office for affordable shelter.
Again, the total contribution is shared between you and the employer. The highest compensation per month subjected to Pag-IBIG contribution is P5,000 and it means that the employer and employee will pay P100 each as the maximum contribution. Pag-IBIG lets you have the following benefits: housing loan, multi-purpose loan, calamity loan, secured savings. For Kasambahay (Househelpers) Wage Orders:*Househelpers are not included in the above list as a more specific law is in place under the Republic Act (R.A.) No. 10361, or Domestic Workers Act. A minimum monthly salary of P2,500 applies to house helpers in NCR, P2,000 in chartered cities and first-class municipalities, and P1,500 in other municipalities. Kasambahays are also entitled to other leave benefits such as 13 month pay, 5 annual SIL, and rest days. However, government-mandated insurance programs like SSS, PhilHealth, and Pag IBIG have specific computations of contributions provided by the law.
Do you have complaints about not receiving the pay you are supposed to receive? Contact Department of Labor and Employment for proper proceedings. This government office has launched a 24/7 customer service line for inquiries and assistance.
Whether you are looking for a job or already employed, you must be aware of your rights from the company aside from the responsibilities you signed for. After all, a person works to get an income and these employee benefits. Increase your chances with 20+ banks and lenders As low as 1.3% monthly interest Apply NoweCompareMo eCompareMo is the No. 1 financial e-commerce site in the Philippines. Follow us on Twitter and Instagram: @ecomparemo. |