IOP L5

• Selection process

  Job offer is the last step where package information including job description, salary, and benefits is discussed with selected candidates by the recruiter
• Candidates are usually given a week to think through the job offer
• Statutory Benefits

  • Medical insurance
  • Pension
  • Time off
• Fringe Benefits

  • Gym membership
  • Remote office stipend
  • Coworking space
• Compensation Benefits

  • Salary and Wages
  • Benefits
  • Equipment
  • Discretionary
• Employees Benefits and Perks

  • Child care
  • Health insurance
  • Dental insurance
  • Life insurance
  • Retirement plan
  • Vision care
  • Fitness
  • Paid vacation leave
  • Personal leave
  • Sick leave
• Types of Employees Benefits

  • Benefits at work
  • Benefits for health
  • Benefits for financial security
  • Lifestyle Benefits
• Republic Act No. 6727 or the “Wage Rationalization Act” mandates the fixing of the minimum wages applicable to different industrial sectors
• The wage increases prescribed under Wage Orders apply to all private sector workers and employees receiving the daily minimum wage rates or those receiving up to a certain daily wage ceiling
• The basis of the minimum wage rates prescribed by law shall be the normal working hours of eight (8) hours a day
• Computation of the Estimated Equivalent Monthly Rate (EEMR) of Monthly-Paid and Daily-Paid Employees

  Based on declared regular holidays and special non-working days
• Differences in Payroll Computation

  Daily-rate employees are paid for the days worked, while monthly-rate employees are paid a fixed amount per month
• Monthly-rate Example:
• Income payments exempted from withholding tax on compensation

  • Compensation income of Minimum Wage Earners (MWEs) who work in the private sector and being paid the Statutory Minimum Wage (SMW), holiday pay, overtime pay, night shift differential pay, hazard pay
• Hazard pay


  Amount paid to MWEs who were actually assigned to danger or strife-torn areas, disease-infested places, or in distressed or isolated stations and camps, which expose them to great danger or contagion or peril to life
• Additional compensations subject to withholding tax

  • Commissions
  • Honoraria
  • Fringe benefits
  • Benefits in excess of the allowable statutory amount of ₱90,000.00
  • Taxable allowances
  • Other taxable income given to an MWE by the same employer
• Compensation during the year not exceeding Two hundred fifty thousand pesos (₱250,000.00) is exempt from withholding tax
• Holiday pay refers to the payment of the regular daily wage for any unworked regular holiday
• Employees not entitled to holiday pay

  • Government employees
  • Those of retail and service establishments regularly employing less than ten (10) workers
  • Kasambahay and persons in the personal service of another
  • Managerial employees
  • Officers or members of a managerial staff
  • Field personnel and other employees whose time and performance is unsupervised by the employer
• Regular Holidays have specific pay rates
• When a regular holiday falls on a Sunday, the following Monday shall not be a holiday, unless a proclamation is issued declaring it a special day
• When Araw ng Kagitingan falls on the same day as Maundy Thursday or Good Friday, a covered employee is entitled to at least two hundred percent (200%) of his/her daily wage even if said day is unworked
• Absences: All covered employees shall be entitled to holiday pay when they are on leave of absence with pay on the workday immediately preceding the regular holiday
• She is entitled to an additional 100% of the daily wage
• Absences

  • All covered employees entitled to holiday pay when on leave of absence with pay on the workday immediately preceding the regular holiday
  • Employers shall grant the same percentage of holiday pay as the benefit granted by competent authority in the form of employee’s compensation or social security payment if employees are not reporting for work while on leave benefits
  • Employees not deemed on leave of absence if the day immediately preceding the holiday is a non-work day or the scheduled rest day, and entitled to holiday pay if worked on the day immediately preceding the non-work day or rest day
• Premium pay refers to additional compensation for work performed within eight (8) hours on rest days and special days
• Employees exempt from Premium Pay

  • Government employees
  • Kasambahay and persons in the personal service of another
  • Managerial employees
  • Officers or members of a managerial staff
  • Workers paid by results
  • Field personnel and other employees whose time and performance is unsupervised by the employer, including those engaged on task or contract basis, purely commission basis or those paid a fixed amount for performing work irrespective of the time consumed
• The “no work, no pay” principle applies during special days and other special days as proclaimed by the President or Congress
• Workers not required or permitted to work on special days are not entitled to compensation, unless provided in a Collective Bargaining Agreement (CBA)
• Work performed on special days merits additional compensation of at least 30% of the basic wage or a total of 130%
• Work on a special day falling on a rest day entitles the employee to additional compensation of at least 50% of the basic wage or a total of 150%
• Overtime pay refers to additional compensation for work performed beyond eight (8) hours a day
• Employees exempt from Overtime Pay


  • Government employees
  • Kasambahay and persons in the personal service of another
  • Managerial employees
  • Officers or members of a managerial staff
  • Workers paid by results
  • Field personnel and other employees whose time and performance is unsupervised by the employer, including those engaged on task or contract basis, purely commission basis or those paid a fixed amount for performing work irrespective of the time consumed
• Night Shift Differential (NSD) refers to additional compensation of 10% of an employee’s regular wage for each hour of work performed between 10 p.m. and 6 a.m.
• Employees exempt from Night Shift Differential

  • Government employees
  • Those of retail and service establishments regularly employing not more than five (5) workers
  • Kasambahay and persons in the personal service of another
  • Managerial employees
  • Officers or members of a managerial staff
  • Field personnel and other employees whose time and performance is unsupervised by the employer, including those engaged on task or contract basis, purely commission basis or those paid a fixed amount for performing work irrespective of the time consumed
• Service charges refer to the amount collected by establishments, such as hotels, restaurants, and similar establishments, added to bills for work or services rendered
• All service charges collected shall be distributed completely and equally among covered employees based on actual hours or days of work or service rendered, including those already receiving the benefit of sharing in the service charges
• Service charges are additional charges added to bills for work or services rendered
• Service charges distribution

  Collected service charges shall be distributed completely and equally among covered employees based on actual hours or days of work or service rendered
• Service incentive leave is a paid leave of five (5) days granted to an employee who has rendered at least one (1) year of service