How to Compute Payroll in Daily Rate or Monthly Rate
Most companies require 8 hours per day from Monday to Friday on a monthly basis and Monday to Saturday for a daily rate. The minimum wage in the Philippines varies in different regions and the hourly rate computation must be based on the DOLE-provided hourly rate table.
Component of Payroll Computation
- Adjustment Pay
- Add Back Pay
- Other Income
- Loans
- Allowances
Source of payroll process is coming from the timekeeping processing called as work hour distribution that confirmed by employee and approved by head department prior to payroll processing. HR Payroll System automatically computes salary based on their daily rate, allowance, or other benefits assigned in payroll information in employee table. Mandatory contributions like SSS, Philhealth, HDMF, tax deduction, loan deduction, adjustment pay, other income, and add back pay are automatically computed by the system. Employees with a minimum wage are tax-exempt under the TRAIN Law.
DOLE Hourly Rate Table
- Regular Day => Reg Hr = 100.00% / OT Hr = 125.00% / ND Hr = 10.00% / OTND Hr = 137.50%
- Rest Day => Reg Hr = 130.00% / OT Hr = 169.00% / ND Hr = 10.00% / OTND Hr = 185.90%
- Special Holiday => Reg Hr = 130.00% / OT Hr = 169.00% / ND Hr = 10.00% / OTND Hr = 185.90%
- Special Holiday & Rest Day => Reg Hr = 150.00% / OT Hr = 195.00% / ND Hr = 10.00% / OTND Hr = 214.56%
- Regular Holiday => Reg Hr = 200.00% / OT Hr = 260.00% / ND Hr = 10.00% / OTND Hr = 286.00%
- Regular Holiday & Rest Day => Reg Hr = 260.00% / OT Hr = 338.00% / ND Hr = 10.00% / OTND Hr = 371.80%
- Double Holiday => Reg Hr = 300.00% / OT Hr = 390.00% / ND Hr = 10.00% / OTND Hr = 429.00%
Daily Rate Computation Sample (payroll period 15th days coverage last cut-off of the month)
Daily Rate = 950.00
Workhour Distribution
- Regular Hours = 96
- Regular OT Hours = 35
- Rest Day Reg. Hours = 8
- Rest Day OTND Hours = 4
- Regular Holiday Hours = 8
Salary Computation
- Regular Pay = (950 / 8) * 96 = 11,400.00
- Regular OT Pay = ((950 / 8) * 1.25) * 35 = 5,195.31
- Rest Day Regular Pay = ((950 / 8) * 1.30) * 8 = 1,235.00
- Rest Day OTND Pay = ((950 / 8) * 1.859) * 4 = 883.03
- Regular Holiday Pay = ((950 / 8) * 2) * 8 = 1,900.00
Gross Income = 20,613.34
Monthly Government Deduction
Monthly Basic Pay = 23,400 -> (11,400.00 + Previous Cut-off Basic Pay: 12,000.00)
- SSS Contribution = 1,057.50
- HDMF Contribution = 100.00
- Philhealth Contribution = 936.00
Total Contribution = 2,093
Taxable Income = 18,520.34 -> (Gross Income - Total Contribution)
The taxable income 18,520.34 from Train Law Semi-Monthly Tax Table is under the salary bracket of 16,667 which the tax due is 1,250.00 + 25% over)
Tax Computation
Tax = 18,520.34 - 16,667 = 1,853.34
Over = 1,853.34 * .25 = 463.34
= 1,250.00 + 463.34
Tax Due = 1,713.34
Net Pay = Gross Income - Total Deduction
= 20,613.34 - (2,093.00 + 1,713.34)
= 16,807.00
Take Home Pay: 16,807.00
Monthly Rate Sample Computation
- Monthly Rate: 38,000.00
- Hourly Rate = (38,000.00 / 26) / 8 = 182.6923
- Constant Total Hours for every cut-off of semi-monthly is 104 hours.
- Regular Hours = 104 - (late + under time + (No. of Absent * 8))
Workhour Distribution same above sample
- Regular Hours = 96
- Regular OT Hours = 35
- Rest Day Reg. Hours = 8
- Rest Day OTND Hours = 4
- Regular Holiday Hours = 8
Salary Computation
- Regular Pay = ((38,000.00 / 26) / 8) * 96 = 17,538.46
- Regular OT Pay = ((38,000.00 / 26) / 8) * 1.25) * 35 = 7,992.79
- Rest Day Regular Pay = ((38,000.00 / 26) / 8) * 1.30) * 8 = 1,900.00
- Rest Day OTND Pay = ((38,000.00 / 26) / 8) * 1.859) * 4 = 1,358.50
- Regular Holiday Pay = ((38,000.00 / 26) / 8) * 2) * 8 = 2,923.08
Gross Income = 31,712.83
Monthly Government Deduction
Monthly Basic Pay = 36,538.46 -> (17,538.46 + Previous Cut-off Basic Pay: 19,000.00)
- SSS Contribution = 1,125.00
- HDMF Contribution = 100.00
- Philhealth Contribution = 1,461.54
Total Contribution = 2,686.54
Taxable Income = 29,026.29 -> (Gross Income - Total Contribution)The taxable income 29,026.29 from Train Law Semi-Monthly Tax Table is under the salary bracket of 16,667 which the tax due is 1,250.00 + 25% over)
Tax Computation
Tax = 29,026.29 - 16,667 = 12,359.29
= 12,359.29 * .25 = 3,089.82
= 1,250.00 + 3,089.82
Tax Due = 4,339.82
Net Pay = Gross Income - Total Deduction
= 31,712.83 - (2,686.54 + 4,339.82)
= 24,686.47
Take Home Pay: 24,686.47
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Tips how to start?
- Create an account.
- Verify the account via email sent by the system after registration is completed.
- Fill-up the form available in your dashboard account and wait for admin approval.
- After your account is approved the first step to do is create a department located at HRD -> Tools -> Department.
- Now ready to create employee master data located at HRD -> Employees.
- Explore the HR Payroll user guide manual as reference for self-testing.
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