Summary
Highlights
The lesson begins by defining gross income as total earnings before deductions (salary + allowances) and net pay (take-home pay) as gross income minus total deductions.
The video details common deductions including Social Security System (SSS) for private employees (5% of monthly salary), Government Service Insurance System (GSIS) for government employees (9% of monthly salary), Pag-ibig Fund (2% of monthly salary, capped at Php200), PhilHealth (2.5% share from employee), and withholding tax.
A detailed explanation of the withholding tax table under the BIR 2025 (TRAIN Law) is provided, showing tax rates based on annual income brackets. Annual incomes up to Php250,000 are exempt from income tax, with increasing percentages for higher brackets.
Other deductions such as loan payments, cash advances, insurance premiums, union dues, and deductions for tardiness or absences are also discussed, emphasizing their optional or conditional nature based on agreements.
The first example calculates Hazel's gross income (Php12,100) and net pay for the month, considering SSS (Php605), PhilHealth (Php302.50), Pag-ibig (Php200), and a Php0 withholding tax as her annual income is below Php250,000. Her net pay is Php10,992.50.
The second problem involves Jeff, who has regular and overtime hours. His gross income, including overtime pay, is Php12,937.50. Deductions are calculated based on his regular pay: SSS (Php600), PhilHealth (Php300), Pag-ibig (Php200), and Php0 withholding tax. His net pay is Php11,837.50.
The final example features Miss Gomez, a public school teacher. Her gross income is Php73,511 (including non-taxable allowance). Deductions include GSIS (Php6,435.99), PhilHealth (Php1,787.78), Pag-ibig (Php200), withholding tax (calculated based on her annual income of Php858,132), and a GSIS loan (Php5,000). Her monthly tax is Php9,752.75, resulting in a net pay of Php50,334.48.