Employees
are paid based on the actual worked days.
Salary will be calculated by simply multiplying Daily Rate to
Number of Worked Days.
Monthly Rate
Monthly-rate
employees are paid a fixed amount per pay period, regardless of the # of actual
working days included in the period.
So
if an employee’s monthly rate is P15,000, the employee will be paid the same
amount in February as well as in March, even if February is a much shorter
month than March.
Based on # of working days per month
In
this method, the company will establish the average # of working days per
month. This is typically a value from 22 to 26. This factor will then be
divided by the standard # of working hours per day (8 hours).
So
if the monthly rate is P15,000.00 and the average # of working days per month
is set as 24, the hourly rate may be calculated as P15,000.00 / 24 / 8 = P78.12
Based on # of working
days per year
In
this method, the company will establish the average # of working days per year.
If the employee is considered paid for all days of the year, including holidays
and rest days, this value can be 365. If rest days are not considered paid and
there are 6 working days per week, this value can be 313 (365 – 52). If
there are only 5 working days per week, this value can be 261.
Day
Factor and Employee’s Daily Rate
|
|
5 days work per week
|
6 days work per week
|
||
|
Paid on
Rest Days |
Not Paid on
Rest Days |
Paid on
Rest Days |
Not Paid on
Rest Days |
|
|
Monthly Salary
|
P15,000
|
P15,000
|
P15,000
|
P15,000
|
|
Day Factor
|
365
|
261
|
365
|
313
|
|
Daily Rate
|
P15,000 × 12 / 365 =
P493.15
|
P15,000 × 12 / 261 =
P689.66
|
P15,000 × 12 / 365
= P493.15
|
P15,000 × 12 / 313 =
P575.08
|
Formula to compute the employee’s
daily rate = Monthly Salary × 12 ÷ Day Factor
Daily Rate is the basis in rate
related calculations like Night Shift Differential, Overtime, etc.
Daily Rate must be bigger than
the Minimum Daily Wage.
Most business owners may choose
day factor of 261(5 days work) or 313(6 days work).