All tax and social security charges payable by the worker shall be paid by the worker list of contact numbers in philippines and any agreement to the contrary shall be void.
It is common that when we are hired, we are informed about our gross salary , that is, what we are going to earn without deducting taxes. When we negotiate our salary, it is advisable to know what parts make up the salary because it varies greatly depending on whether we are referring to the gross or net amount.
Salary components
As we indicated at the beginning of the post, salary is the totality of the economic benefits that workers receive for the provision of their services on behalf of others.
The elements that make up the salary are the following:
Base salary: remuneration set per unit of time or work. In the first case, it refers to a fixed amount and in the second, the remuneration depends on the performance of the work or service.
Salary supplements : this is an addition to the base salary based on a series of circumstances related to the work they perform and their personal characteristics. For example, night work, dangerousness, seniority, incentives, etc.
Extra payments : the employee is entitled to two extra bonuses per year, one on the occasion of the Christmas holidays and the other in the month determined by collective agreement or by agreement between the employer and the legal representatives of the employees. The amount of such bonuses will also be determined by Collective Agreement.
Salaries in kind: this is a non-monetary contribution that is valued within the employee's salary. For example: food vouchers, providing the employee with a car or a home.
Overtime : These are hours of work outside of working hours that workers do voluntarily, although legal limits cannot be exceeded.
Difference between net and gross salary
Gross salary : is the sum of all the elements of the payroll that have been accrued, including salary in kind. All the amounts to which the worker is entitled for having provided services are added together.
Net salary : once we know the gross salary, we must apply a series of discounts (IRPF withholdings and Social Security contributions) and the result is what is entered into the worker's account.
Net salary = gross salary – deductions
Gross salary is always higher than net salary. It is important to know both our gross and net salary. Gross salary, for example, is used to calculate severance pay, unemployment benefits or retirement pension.
How is net salary calculated?
We already know that net salary is the result of applying all deductions to gross salary, let's explain how to calculate annual net salary :
You need to know the exact gross salary in order to calculate the net salary, whether annual or monthly.
It is also necessary to know the type of contract since a temporary contract has more retention than a permanent one.
Next, the IRPF discount must be calculated (as a general rule, it appears on the employee's payroll). The IRPF percentages are what vary the most because they can range from 2% to 46% depending on the brackets and the conditions of the employee.