How to Compute Salary in Monthly Basis

Frequently company job advertisement is publicizing monthly pay for a position needed instead of time-based rate. Sometimes, you may be more interested on the daily rate compensation because it's easy to know how much rate per hour.

The basic computation of Monthly basis is monthly salary plus OT pay & Allowances (if applicable) less deductions such as late, under time, absences, SSS contribution, HDMF, Phil-health, advances, withholding tax.

  • SSS = computed based on salary range.
  • Pag-Ibig = P100 contribution.
  • Withholding tax = computation is based on salary bracket while minimum wage earners are now tax-exempt.
  • Phil-health / HMO = computed based on salary range.
  • Tardiness / Absences = based on company rules.

Sample Computation:

  • Monthly Rate = Php 20,000.00
  • Semi-Monthly Rate = Php 10,000.00

How to get Hourly Rates

  • Php 20,000.00 x 12 / 365 days / 8 regular hrs a day
  • Php 82.19

Sample Deduction

1) No. of Absences = 16 hrs (2 days)
2) No. of Late = 5 hrs
3) No. of Under time = 6 hrs
Total Deduction => (16 + 5 + 6) x 82.19 = 2,219.13

Payroll in Semi-Monthly
= Php 10,000 - Php 2,219.13
= Php 7,780.87

The procedure computation of Overtime Hours pay if applicable is the same with daily rate computation.

Computation of withholding tax the contribution of SSS, Phil-health, HDMF or other non taxable pay like allowance etc., should be deduct on the gross income before getting the salary bracket in withholding tax table reference.