Payroll Schedules and Their Implications
At Globaine Payroll, we provide seamless payroll management solutions for global teams across 150+ countries. Below are details of payroll schedules in the Philippines:
| Frequency | Payments/Year | Benefits | Challenges |
|---|
| Weekly | 52 | Ideal for workers with regular expenses, ensuring consistent cash flow. | Higher administrative effort and costs due to frequent processing. |
| Bi-Weekly | 26 | Provides predictable pay cycles, aiding in budget management. | May not align with fixed monthly expenses like rent or utilities. |
| Semi-Monthly | 24 | Commonly used in the Philippines, aligning with expense schedules such as rent. | Overtime and holiday pay calculations may vary with irregular pay periods. |
| Monthly | 12 | Simplifies payroll administration for employers and supports long-term planning. | Employees need careful budgeting to manage income over longer pay periods. |
Sample Payroll Table
| Frequency | Payments/Year | Payroll Date | Hours Per Pay Period |
|---|
| Weekly | 52 | Weekly | 40 |
| Bi-Weekly | 26 | Every 2 weeks | 80 |
| Semi-Monthly | 24 | 15th and Last Day of the Month | 86.67 |
| Monthly | 12 | End of the Month | 173.33 |
Bi-Weekly Payroll Calculations for New Hires
Scenario: A new hire with an annual gross salary of PHP 600,000 is paid bi-weekly (26 pay periods/year).
| Step | Calculation | Result |
|---|
| Gross Salary Per Pay Period | PHP 600,000 ÷ 26 | PHP 23,076.92 |
| Total Working Hours Per Pay Period | 8 hours/day × 10 working days | 80 hours |
| Earnings Per Pay Period | Based on hours worked (if prorated) | Variable |
Salary Adjustment Calculations for Existing Employees
Scenario: An employee’s salary increases from PHP 450,000 to PHP 500,000, effective November 6, 2024. They are paid bi-weekly (26 pay periods/year).
November 22, 2024, Pay Period Breakdown:
| Date Range | Working Days | Hours | Earnings |
|---|
| November 4–5, 2024 | 2 days | 16 hours | PHP 3,461.54 (Old Salary) |
| November 6–17, 2024 | 8 days | 64 hours | PHP 12,307.69 (New Salary) |
| Total | 10 days | 80 hours | PHP 15,769.23 |
Detailed Calculations:
| Component | Calculation | Result |
|---|
| Existing Salary | PHP 17,307.69 × (16 ÷ 80) | PHP 3,461.54 |
| New Salary | PHP 19,230.77 × (64 ÷ 80) | PHP 12,307.69 |
Implications for Employers and Employees
Employers
- Must comply with labor laws, such as ensuring timely payments under the Labor Code of the Philippines.
- Accurate overtime and holiday pay calculations are essential for payroll compliance.
Employees
- Understanding payroll schedules can aid in better financial planning.
- Mid-period salary adjustments are common and must be communicated effectively.
