BY Judah Hirsch Articles
You have mail! You click on the new email, skim through the words, and alas, left with payroll questions you’ve seen for the nth time.
“Payday is on the weekend. When will I receive it then?”
You sigh and type in your answer. Message sent.
A few minutes after, the phone rings. You get another question from an employee who wants to know when will he be receiving his holiday pay.
You sigh internally but answer the question nonetheless.
The day ends with you answering a total of five more queries and you brace yourself for another batch tomorrow – and most probably on the days ahead.
Your job in the whole payroll process often requires everything to be absolutely precise. It includes creating error-free reports and sending everyone’s compensation on time every payday.
Doing those tasks already takes a lot of your time and effort due to the number of employees you need to check daily. You need to make sure that each gets paid fairly based on accurate records.
These things could be exactly what you’re doing right now until this sudden Q&A disrupts your work. Now, you find yourself trying to think of a way to answer everything as soon as possible.
A few questions here and there might not be much of a distraction for you. You wouldn’t think so especially if the questions are easy to answer.
If you add all the minutes consumed by these emails and phone calls made up of the same old question, plus the time you need to answer these using the same old explanations, you will realize how much time and energy had gone to waste.
So, how can you reduce the time spent on such repetitive tasks?
It’s simple, just create a frequently asked questions (FAQ) page.
First of all, start by compiling the most commonly asked questions. You can go through your past emails or think about your personal experiences.
Ask yourself: What do you and others often ask about payroll?
Furthermore, if you haven’t recorded any employee queries yet, start by taking notes on phone calls and face-to-face discussions. You can also copy payroll questions you get directly when you receive them via email.
If you’re still figuring out how and where to start, don’t worry. Here’s a quick list of the most common payroll questions. We added some initial answers as well, based on the policies set in the Labor Code of the Philippines. Some of the questions are about the basic computation of wages, 13th-month pays, overtime pays, and holiday pays.
Pay is calculated depending if the employee is paid on a monthly or daily basis. Be reminded that “EMR” used in the following formulas stands for Equivalent Month Rate.
For monthly-paid employees:
EMR = (Applicable Daily Rate x 365)/12
The factor of 365 days consists of 302 ordinary working days, 51 rest days, 10 regular holidays, and 2 special days.
For daily-paid employees:
EMR = (Applicable Daily Rate x 391.50)/12
The factor of 391.5 days consists of 302 ordinary working days, 20.60 (nine regular holidays x 200% plus one regular holiday/Sunday*260%), 66.3 (51 rest days x 130%), 2.6 (2 special days x 130%).
EMR = (Applicable Daily Rate x 314)/12
The factor of 314 days consists of 302 ordinary working days, 10 regular holidays, two special days (if actually worked, equivalent to 2.6 days).
EMR = (Applicable Daily Rate x 262)/12
The factor of 262 days consists of: 250 ordinary working days, 10 regular holidays, two special days (if actually worked, equivalent to 2.6 days). The factor of 260 may be used if the 2 special days are not worked and are not considered paid.
All rank-and-file employees (employees outside managerial and supervisory positions), who have worked in the company for at least one month during the calendar year, are entitled to receive a 13th-month pay.
The employee’s 13th-month pay will be paid not later than December 24 of each year.
The 13th-month pay is 1/12 of the total basic salary within the calendar year. It is can also be computed by dividing the basic salary for the whole year by 12 months.
Employees who are required to work beyond eight (8) hours a day are entitled to receive additional pay. At least 25% is added to the regular wage if the employee works overtime on ordinary working days. If he/she works overtime on a holiday or rest day, at least 30% is added to the employee’s holiday or rest day pay.
The employee receives 100% of his/her salary on a regular holiday even if he/she didn’t work on that day.
For work done during a regular holiday, the employee gets 200% of his/her regular salary for that day for the first eight hours.
For work done over eight hours on a regular holiday, the employee gets an additional 30% of his/her hourly rate to his/her daily basic pay for a total of 130%, plus the regular holiday pay of 200%.
[Hourly rate of the basic daily wage x 200% x 130% x number of hours worked]
If an employee works during a regular holiday that also falls on a rest day, for example on a Sunday, he/she should receive 200% of his/her regular salary and a 30% additional.
[(Daily rate + Cost of Living Allowance) x 200%] + [30% (Daily rate x 200%)]
For work done over eight hours on a regular holiday that also falls on a rest day, the employee gets an additional 30% of his/her hourly rate to his/her daily basic pay – a total of 130% – for the overtime work, another 130% for working on a rest day, plus the regular holiday pay of 200%.
[Hourly rate of the basic daily wage x 200% x 130% x 130% x number of hours worked]
A default “no work, no pay” policy is applied if the employee didn’t work on a special day unless there is a favorable company policy, practice, or agreement granting payment on a special day.
For work done on a special day, the employee gets an additional 30% of his/her daily rate on the first eight hours of work.
[(Daily rate x 130%) + Cost of Living Allowance]
For work done over eight (8) hours on a special day, the employee gets an additional 30% of his/her hourly rate to his/her daily basic pay for a total of 130%, plus the special day pay of 130%.
[Hourly rate of the basic daily wage x 130% x 130% x number of hours worked]
For work done during a special day that also falls on a rest day, the employee gets an additional 50% of his/her daily rate on the first eight hours of work.
[(Daily rate x 150%) + Cost of Living Allowance]
There are still a lot more commonly asked questions about payroll that you can only answer based on the company’s policy, such as the following:
Of course, you don’t need to limit your list to these payroll questions. Feel free to add more based on what most of the employees need to know.
Creating an FAQ page can save you a lot of time from answering many questions from employees. Publish it in your company’s private website or intranet so every person in the company can easily access it when they need to do so.
You can also attach the FAQ page’s link to every inquiry mail you receive adirect employees to visit it first every time they ask you about their pay. Build it to be a place where everyone can find the answers right away.
So in the end, what’s only left for you to answer are the most complex payroll questions that are rarely asked. All queries get answered in a snap. As a result, more productive work gets done. Everybody wins.