Salaries are compensation quoted annually or monthly for employees, while wages are compensation quoted hourly or daily. Salaries are paid monthly while wages must be paid at least every two weeks. The key difference is that salaries are fixed amounts not dependent on hours worked, while wages are based on hours worked. Income refers to money received for work or investments, and benefits are additional compensation like bonuses or health insurance provided on top of basic salary or wages.

1. Salaries and Wages
DEFINITION OF TERMS

2. Learning Outcomes
1) Define salary
2) Define wage;
3) Differentiate between salary and wage
4) Distinguish between salary earners and wage earners;
5) Define income and
6) Define benefits

3. Ways of Service Payment
I. Salary and Wage
Salary is the compensation usually quoted annually or monthly for an employee.
Wage is compensation quoted in an hourly or daily rate for an employee. “No work, No Pay”.

4. Labor Code of the Philippines ( Art. 143,
PD 442)
Art. 103. Time of Payment. Wages shall be paid at least
once every two (2) weeks or twice a month at intervals not
exceeding sixteen (16) days. If on account of force majeure
or circumstances beyond the employer’s control, payment
of wages on or within the time herein provided cannot be
made, the employer shall pay the wages immediately after
such force majeure or circumstances have ceased. No
employer shall make payment with less frequency than
once month.

5. Examples:
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 minimum wage earner in Metro Manila is paid PhP481 for an 8-hour workday. What is his
hourly wage?

6. 1. An employee is paid a monthly salary of PhP16,000 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?
Solution: Employee: 16, 000 ÷ 20 = 800 per day; 800÷8 = 100 per
hour,
Taxi Driver : 750 ÷ 8 = 93.75 per hour.
Therefore, the employee has a higher hourly wage rate.

7. Income and Benefits
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,
respectively.
2. Individuals may earn income by investing their capital in
stocks, mutual funds or bank deposits.

8. Benefits
Benefit – is employee compensation given by an employee on top of the basic salary/wage. Note
that benefits may come in the form of cash or in kind.
Examples:
1. Cash Benefits: 13th month pay, bonuses, rice subsidy, transportation allowance.
2. Non-cash benefits: SSS/GSIS, Pag-ibig, PhilHealth