Business Mathematics Module 12 Gross and Net Earnings PDF

Preview

Summary

Download Business Mathematics Module 12 Gross and Net Earnings PDF

Description

Senior High School

Business Mathematics Quarter 2 – Module 12:

Gross and Net Earnings

Writer:

JHOANNA S. MANALOTO Teacher II - San Juan High School (Mexico) Editors: JANE P. VALENCIA, Ed.D. – EPS – Mathematics (CHAIRMAN) CHARIZEL T. ARCILLA – SPST-I Malino National High School JHOANNA S. MANALOTO – T-II San Juan High School (Mexico)

What I Need to Know This will give you an idea of the skills or competencies you are expected to learn in the module. After going through this module, you are expected to:

• • •

define gross and net earnings; compute gross and net earnings; and solve word problems involving gross and net earnings.

What I Know This part includes an activity that aims to check what you already know about the lesson to take. If you get all the answers correct (100%), you may decide to skip this module. Direction: Choose the letter of the correct answer. Write the letter of your answer on a separate sheet of paper. Show your solution. 1. It is the total amount earned by any person before deductions are made. A. gross earning C. net earning B. deduction D. none of the above 2. It is a fixed amount or a percentage of the basic salary held by any authority as a form of necessary dues. A. gross earning C. net earning B. deduction D. none of the above 3. It is the amount earned by any person from the gross earnings less the total deductions. A. gross earning C. net earning B. deduction D. none of the above 4. Mr. Reyes has a monthly basic salary of ₱30,000. He also receives a 5% commission for his total sales. If he has a total sales of ₱100,000, how much is his gross earnings for the month? A. ₱5,000 B. ₱35,000 C. ₱130,000 D. ₱135,000 5. If gross earning is ₱30,000 and deduction is ₱5,000, what is net earning? A. ₱25,000 B. ₱35,000 C. ₱40,000 D. ₱45,000 6. Ms. Nicdao has a total monthly deduction of ₱3,280. If her take-home pay is ₱21,250, how much is gross earning for working this month? A. ₱3,280 B. ₱21,250 C. ₱17,970 D. ₱24,530 7. The monthly total deduction from Mr. Agoncillo’s gross income is 5%. If his monthly gross income is ₱28,000, how much will be his deductions? A. ₱1,400 B. ₱14,000 C. ₱26,600 D. ₱29,400

8. Antonette got a take-home pay of ₱17,300. If her gross income for the month is ₱20,000, how much was deducted from her total earnings? A. ₱2,300 B. ₱2,700 C. ₱17,300 D. ₱37,300 9. Mr. Lim’s annual net income is ₱450,000. What is his annual gross income if his annual deduction is 10% of his gross? A. ₱300,000 B. ₱400,000 C. ₱500,000 D. ₱600,000 10. Mang Cardo receives ₱450 per day of work. What will be his gross income if he worked 25 days last month and received ₱2,000 for cash allowance? A. ₱11,250 B. ₱12,250 C. ₱13,250 D. ₱14,250 11. An employee’s monthly deduction is 8% of his monthly gross income. If his monthly gross income is ₱25,000, what is her take-home pay? A. ₱2,000 B. ₱8,000 C. ₱23,000 D. ₱27,000 12. An employee receives 93% of his gross income due to required deductions. If his monthly gross income is ₱40,000, how much is his net pay? A. ₱33,300 B. ₱35,100 C. ₱36,900 D. ₱37,200 13. Mr. Pallasigui, has a monthly salary of ₱35,000. He pays his monthly contributions: ₱2,560.42 for income tax, ₱800 for SSS, ₱525 for PhilHealth and ₱100 for Pag-Ibig. How much will be his total deductions? A. ₱3,985.42 B. ₱10,319.33 C. ₱29,181.67 D. ₱40,818.33 14. Jenny receives a monthly salary of ₱23,000. Every month, she has to pay her monthly contributions: ₱184.33 for income tax, ₱800 for SSS, ₱345 for PhilHealth and ₱100 for Pag-Ibig. How much will be her take-home pay? A. ₱997.55 B. ₱1,231.37 C. ₱21,570.67 D. ₱22,766.82 15. Jun-Jun is exempted from paying the income tax but is required to pay his monthly contributions: ₱1,350 for GSIS, ₱225 for PhilHealth, and ₱100 for Pag-Ibig. How much is his gross income if his take-home pay is ₱13,325? A. ₱15,000.00 B. ₱16,000.00 C. ₱17,000.00 D. ₱18,000.00

3

Lesson

1

Gross and Net Earnings

For almost all employees, a part of their earnings is usually taken out before they can receive their take-home pay. Have you ever wondered how employees solve for their expected salary on their pay day? How do employers solve for their employees’ deductions?

What’s In

As a recall on your previous lesson on salary, wage, income and benefits, read, analyze and solve each of the following problems. Write your final answer on a separate sheet of paper or notebook. Don’t forget to show your solutions.

1. Ms. Manaloto, a teacher in a public school receives a monthly salary of ₱22,316. How much will be her annual salary? 2. Felix works as a construction worker and has a daily wage of ₱750. If he works 6 days in a week, how much will he get for working this week? 3. A company offers ₱216,000 as an annual basic salary. If an employee is being paid semimonthly, how much will he get for each payday? 4. Priscilla works as a part-time gym instructor. If she earns ₱150 per hour and works 25 hours a week, how much will she get after 2 weeks of work? 5. Jamilla, a food service crew, works 6 hours on Monday, 5 hours on Tuesday, 5 hours on Wednesday, 4 hours on Thursday, and 4 hours on Friday. If she has an hourly rate of ₱60, how much will she after one week of work?

4

What’s New

For his salary in the previous month, Mr. Ocampo, who is a regular employee of the BM Company, received the pay slip below.

BM Company Name of Employee:

Ramon S. Ocampo

Department:

Production Department

Inclusive Date:

June 1-30, 2020

DEDUCTIONS

EARNINGS Basic:

20,000.00

Income Tax:

769.33

Overtime:

4,680.00

SSS :

800.00

Holiday Pay:

1, 200.00

PhilHlth:

300.00

Pag-Ibig:

100.00

Rice Subsidy:

SSS Ln:

2,000.00

Cash Adv: Pag-Ibig Ln: Total Deductions:

Total Earnings:

NET PAY Monthly Net:

Oh no! Some parts of the pay slip are missing! By examining the figures on his pay slip, what do you think are the missing values?

5

What is It

In the figure shown above, it can be observed that, in a payslip, there are three parts, namely Total Earnings, Total Deductions, and Net Pay. In this module, you will be able to define and compute these three values.

Gross Earning is the total amount earned by any person before deductions are made. It is also known as the gross income. Using Mr. Ocampo’s pay slip, we can solve for the missing value on his pay slip’s Total Earnings by simply adding all his earnings. That is: EARNINGS Basic:

20,000.00

Overtime:

4,680.00

Holiday Pay:

1, 200.00

Rice Subsidy:

2,000.00

Total Earnings:

27,880.00

Add all the given earnings

An employee does not receive his total earning during the payday. Generally, there are deductions from his gross earnings in order to compute for his net pay. Deductions are fixed amount or a percentage of the basic salary held by any authority as a form of necessary dues.

Some of the deductions may include, among other, the following: o o o o o o

SSS Contribution GSIS Contribution PhilHealth Contribution Withholding Taxes Salary Advances or Temporary Vales (IOUs) Union Dues

6

Using Mr. Ocampo’s pay slip, we can solve for the missing value on his pay slip’s Total Deductions by simply adding all his required deductions. That is: DEDUCTIONS Income Tax:

769.33

SSS :

800.00

PhilHlth:

300.00

Pag-Ibig:

100.00

SSS Ln:

Add all the required deductions

Cash Adv: Pag-Ibig Ln: Total Deductions:

1,969.33

Net Earnings may be defined as the amount earned by any person from the gross earnings less the total deductions. It is also known as the net income, net pay or take-home pay.

Therefore, to solve for the net earnings, we simply subtract the total deductions from the gross earnings, therefore: NE = GE - TD where:

NE = net earnings GE = gross earnings TD = total deductions

Using Mr. Ocampo’s pay slip, we can solve for his net earnings by subtracting his total deductions of ₱11,676.35 from his gross earnings of ₱40,947.50, that is: NE = GE – TD = ₱27,880.00 - ₱1,969.33 = ₱25,910.67 Mr. Ocampo’s pay slip is now complete!

7

Examples: 1. Mang Teban has total earnings of ₱10,500.25 from working the entire week. If he has a total deduction of ₱2,125.50, how much will be his net earnings? Solution: NE = GE – TD = ₱10,500.25 - ₱2,125.50 = ₱8,374.75 2. Mrs. Espinosa received a net pay of ₱22,500.00. If her gross earning is ₱30,000.00, how much was her total deduction? Solution: Since the amount of total deduction is missing, then we shall subtract the net earnings from the gross earnings, that is TD = GE – NE = ₱30,000.00 - ₱22,500.00 = ₱7,500.00 3. If Felix received a net pay of ₱5,745.25 after he was deducted ₱1,825.50 from his salary, how much was his gross income? Solution: Since the amount gross earning is missing, then we shall add the net earnings and the total deduction, that is GE = NE + TD = ₱5,745.25 + ₱1,825.50 = ₱7,570.75 Now that you already know the basic operations in solving the gross earnings, total deductions, and gross earnings, let us try to solve more challenging problems.

4. Mrs. Suing, a teacher, gets a monthly salary of ₱25,000.00 and a rice subsidy of ₱2,000.00 per month. How much will be her monthly gross income? Solution: Salary Rice Subsidy Gross Earnings

₱25,000.00 ₱2,000.00 ₱27,000.00

Suppose every month, Mrs. Suing has to pay an amount of ₱653.08 for income tax, ₱371.25 for PhilHealth, ₱100.00 for Pag-Ibig and ₱2,430.00 for GSIS contributions. What is her monthly net income? Solution: Income Tax PhilHealth Pag-Ibig GSIS Total Deductions

₱288.33 ₱375.00 ₱100.00 ₱2,250.00 ₱3,013.33

Net Earnings = ₱27,000.00 - ₱3,013.33 = ₱23,986.67

8...