1. What is the Salary Calculation?

The salary calculation for contractors in the Philippines computes net pay by subtracting mandatory deductions (Withholding Tax, SSS, PhilHealth, and Pag-IBIG) from gross earnings (rate multiplied by hours worked).

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( Rate \) — Hourly rate in Philippine Pesos
• \( Hours \) — Total hours worked
• \( Withholding\ Tax \) — Tax deducted at source
• \( SSS \) — Social Security System contribution
• \( PhilHealth \) — Philippine Health Insurance contribution
• \( Pag\-IBIG \) — Home Development Mutual Fund contribution

Explanation: The calculation provides the net take-home pay after all mandatory deductions.

3. Importance of Accurate Salary Calculation

Details: Proper salary computation ensures compliance with Philippine labor laws and accurate payment of government-mandated contributions.

4. Using the Calculator

Tips: Enter hourly rate in PHP, hours worked, and all deduction amounts. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are the current contribution rates?
A: Rates vary annually. Check latest SSS, PhilHealth, and Pag-IBIG circulars for updated contribution tables.

Q2: How is withholding tax computed?
A: Withholding tax depends on compensation level and tax status. Refer to BIR's graduated tax table.

Q3: Are contractors required to pay all these contributions?
A: Yes, under Philippine law, even contractors must pay SSS, PhilHealth, and Pag-IBIG contributions.

Q4: What if I have multiple contracts?
A: Contributions are based on total earnings. You may need to adjust payments if exceeding maximum contribution ceilings.

Q5: Can this calculator be used for regular employees?
A: While the basic formula applies, regular employees may have different computation rules for benefits and bonuses.