How is monthly basic pay computed?

Hello. I'm new to this forum (and to working 9-5ers).
Right now, I'm working for a new company (only started about three months ago) and I need legal advice.

I understand that the computation for the hourly basic rate (which can be important when computing for tardiness deductions, overtime pay, etc) can vary. The labor code does suggest that there are a number of ways to compute daily rates but I, along with a lot of the people from work, feel that the way the company computes for our daily rates is wrong.

The company came up with my daily rate by dividing my annual basic pay by 314 days, even though my contract says that my "monthly base pay shall cover a five-day workweek scheme" which implies that I only work around 262 days (since saturdays and sundays aren't counted of course). The company says that we get paid on saturdays even though we don't go to work.

Is that even legal? Any feedback will be greatly appreciated.

yes, that is legal. the important thing is that the daily wage does not fall below the minimum wage.

you can be asked to come in on a saturday if required and you will not get extra because it is already paid

that's interesting. so we still work five days a week but if a work day falls on a Saturday then the company is right in computing our salary as if we are actually rendering work 314 days/year?

40 hours a week multiplied by 4weeks-- the result should be the minimum number of work hours in a month right?

Sorry for being outrageously persistent on this matter.

no, it's up to the company to come up with a divisor. you divide your gross annual income by the divisor (in this case 314), and the result should not fall below the minimum wage in your area.

I think this could help you ms daisa


For monthly-paid employees
The factor 365 days in a year is used in determining the equivalent annual salary of monthly-paid employees. To compute their EEMR, the procedure is as follows:

EEMR = Applicable Daily Rate x 365 days
12
Where 365 days = 298 days - Ordinary working days
52 days - Sundays/Rest days
12 days - Regular Holidays
3 days - Special days
365 days - Total equivalent no. of days in a year

For daily-paid employees
The following formula may be used in computing the EMR of different groups of daily-paid employees for purposes of entitlement to minimum wages and allied benefits under existing laws:
a) For those who are required to works everyday including Sundays or rest days, special days and regular holidays.

EEMR = Applicable Daily Rate x 393.50 days
12
Where 393.50 days = 298.00 days - Ordinary working days
24.00 days - 12 Regular holidays x 200%
67.60 days - 52 rest days x 130%
3.90 days - 3 special days x 130%
393.50 days Total equivalent no. of days in a year
b) For those who do not work and are not considered paid on Sundays or rest days.

EEMR = ADR x 313 days
12
Where 313 days = 298 days - Ordinary working days
12 days - Regular holidays
3 days - Special days
313 days - Total equivalent no. of days in a year
c) For those who do not work and are not considered paid on Saturdays and Sundays or rest days

EEMR = ADR x 261 days
12
Where 261 days = 246 days - Ordinary working days
12 days - Regular holidays
3 days - Special days
261 days - Total equivalent number of days

this is very useful info sir eric. thanks.

How about those who are working in a compressed work week?Will the divisor still be 313?

eric6b122007 wrote:I think this could help you ms daisa


For monthly-paid employees
The factor 365 days in a year is used in determining the equivalent annual salary of monthly-paid employees. To compute their EEMR, the procedure is as follows:

EEMR = Applicable Daily Rate x 365 days
12
Where 365 days = 298 days - Ordinary working days
52 days - Sundays/Rest days
12 days - Regular Holidays
3 days - Special days
365 days - Total equivalent no. of days in a year

For daily-paid employees
The following formula may be used in computing the EMR of different groups of daily-paid employees for purposes of entitlement to minimum wages and allied benefits under existing laws:
a) For those who are required to works everyday including Sundays or rest days, special days and regular holidays.

EEMR = Applicable Daily Rate x 393.50 days
12
Where 393.50 days = 298.00 days - Ordinary working days
24.00 days - 12 Regular holidays x 200%
67.60 days - 52 rest days x 130%
3.90 days - 3 special days x 130%
393.50 days Total equivalent no. of days in a year
b) For those who do not work and are not considered paid on Sundays or rest days.

EEMR = ADR x 313 days
12
Where 313 days = 298 days - Ordinary working days
12 days - Regular holidays
3 days - Special days
313 days - Total equivalent no. of days in a year
c) For those who do not work and are not considered paid on Saturdays and Sundays or rest days

EEMR = ADR x 261 days
12
Where 261 days = 246 days - Ordinary working days
12 days - Regular holidays
3 days - Special days
261 days - Total equivalent number of days

under your compressed work week, compute how many working days in the year.

attyLLL wrote:under your compressed work week, compute how many working days in the year.

Under our compressed work week, we only have 249 normal working days + 12 legal holidays + 7 special holidays + 4 additional company declared holidays.

Hello! Good eve!

I have the same line of problem with daisa, but the thing is, I already searched about this, read the formula but I still don't understand how it done. Still confused on our HR/Payroll Accountant's computation of our Basic Salary and Overtime Charges.

I am an employee in our Company for 7 years and 11 months to be exact now. It is a practice in our Company not to have any contract for employees. So, if an employee wanted to go, there is no contract he/she is breaching. I started here in our Company in 2005 and they offered me 8,000 for a month which is my Basic Gross Salary according to my payslip. Our term of payment is 1-15 and 16-30/31. Before, our HR/Payroll Accountant computed our overtime, and her formula is 8,000 / 26 (days) / 8 (hrs) x 125% x (applicable time of OT). That is what her practice before.

Last year, they hired a messenger. In the messenger's overtime computation, she just divided the offered salary into only 22 days instead of 26 days. I asked her why? She said, because they are only new and under provi. They only paid in daily basis, that's why only 22 days. In result, that messenger has hourly rate of 62.93 and mine is 68.5 [2013 Basic Salary = 14,250 (inclusive of allowance which is in tax shield)] / 26 / 8 x 125% x (applicable time of OT). I got mad on her because, why is it like that. 7 years employee over 2 months employee? So unfair computation, I said... Then she said, "Ok, I will re-compute it and will compute yours and ours into same days, 22 days"....

We are charging our Saturday as OT when our boss asked us to work for that day.

Another thing is, we have a new hired employee. They offered her 10,032. They said that it is the minimum. 456 (minimum wage per day) x 22 days = 10,032.


My questions are:
1. Is our Company violating any laws regarding these computation and basic salary?
2. What is the real cleared formula for these OT and basic salary? Is it divided into 22 days or 26 days?
3. Is the monthly salary for a 15/15 paid employee is only 10,032?

PLEASE HELP.... Thank you in advance for any reply! (^_^)

if you don't work on and is not paid on Saturday, the correct multiplier is 22 days.. so that's daily wage x 22 days.

** for as long as the daily wage is within the minimum wage, there is no violation.
** for OT, that will be daily wage / 8 hours = hourly rate * overtime rate.
** for the newly hired, that is correct, 456 x 22 = 10,032 per month. 11 days per payday.

imo, it's wrong, because they are using monthly, rather than annual divisors. you will have skewed results because not every month has 22 working days.

thank you for the replies...

I'm sorry but I'm still confused. In our case, our Basic Gross Salary for the whole month is fixed and it only divided into "kinsenas & katapusan" term. We were paid every 15th (for 1-15 days) and 28th/29th (for 16-28/29 of February) or 30th/31st (for 16-30/31), regardless of holidays... If we worked on holiday/s, we charged it as OT and our OT is not included in our payroll, it is computed separately.

How will I compute my daily rate? is it 14,250 / 26 days or 14,250 / 22 days?

Please help. Thanks in advance! (^_^)

if you dont work on Saturdays..
261 days / 12 months = 21.75 or 22 days
14,250 / 22 = 647.73 per day

if you work on Saturdays
313 days / 12 months = 26.08 or 26 days
14,250 / 26 = 548.08 per day

Shen Serolf wrote:thank you for the replies...

I'm sorry but I'm still confused. In our case, our Basic Gross Salary for the whole month is fixed and it only divided into "kinsenas & katapusan" term. We were paid every 15th (for 1-15 days) and 28th/29th (for 16-28/29 of February) or 30th/31st (for 16-30/31), regardless of holidays... If we worked on holiday/s, we charged it as OT and our OT is not included in our payroll, it is computed separately.

How will I compute my daily rate? is it 14,250 / 26 days or 14,250 / 22 days?

Please help. Thanks in advance! (^_^)

Magulo ang thread na eto, madami ksi nakikisagot na hindi naman base sa batas..I Think, let AttyLL muna..

shen, again, it should be ANNUAL, not monthly, salary. to be divided by number of working days in the YEAR.

it is the company's prerogative to decide how many days in the year they will pay.

Good Day Sir/Maam!

ask ko lang how many hours ba tlga ang reuired na i-work ng isang empleyado per week?Clinic po kami and we are required to work even during on Sat. but then we are not receiving premium pay for the Sat. Work..pls help,3 years na po akong 7400 ang sahod monthly with the existing daily rate of 283.50 per day..Monthly paid po kmi pero ang gnagmit po na computation ay para sa daily paid employees 313 days.

6 day a week is fine, and as long as each day is at least minimum wage

this forum has been helpful to me. however, i need further clarification... the discussion here is based on work days... is it based on 8 hr work?? We have employees / managers that received montly fixed salary of up P60k per month.. there are no additional compensation for work rendered on weekends, restdays and holidays, they are on 365 days computation. SBMA labor center recently inspected our payrol and to my surprise they say that the monthly fixed salary is based only on 8hr/day work only.. so beyond 8 hrs we need to pay these montly paid employees too, they wanted the company to pay the beyond 8hr work of these montly fixed employees, are they correct??... your legal advise will be very essential to us..thank you so much..

ACSI wrote:this forum has been helpful to me. however, i need further clarification... the discussion here is based on work days... is it based on 8 hr work??  We have employees / managers that received montly fixed salary of up P60k per month.. there are no additional compensation for work rendered on weekends, restdays and holidays,  they are on 365 days computation. SBMA labor center recently inspected our payrol and to my surprise they say that the monthly fixed salary is based only on 8hr/day work only.. so beyond 8 hrs we need to pay these montly paid employees too, they wanted the company to pay the beyond 8hr work of these montly fixed employees, are they correct??... your legal advise will be very essential to us..thank you so much..

Yes, generally any work in excess of 8 hours is overtime - but since they are managers (and officers, etc) - they may be entitled instead to additional earned vacation leaves (compensatory time off).

managers are not entitled to overtime pay.

Thank you so much for your respond, one more thing though.. can this "compensatory time off" or earned vacation leave be misinterpreted as OFFSETTING ?

ACSI wrote:Thank you so much for your respond, one more thing though.. can this "compensatory time off" or earned vacation leave be misinterpreted as OFFSETTING ?

no.

"bayad" yan sa extra na trabaho.

Hi.

RE: How to compute daily rate (daisa24)
How is it that its company's decision to dictate the payroll divisor when it was stated in the contract that they will be working 5 days a week? The divisor should be 261 as mandated by law. By making it 314, the employees will be underpaid as they are not working on Saturdays. Rest days are not paid. If they will be asked to work on Saturdays, that should be in the contract as well.As per supreme court ruling, 5 days a week means 261 payroll divisor.