All about minimum Wage in the Philippines

There have been issues on minimum wage in the past. Payroll services  seemed to be in a predicament.

Time and attendance were also affected. Some laborers bring their grievances to the streets, clamoring  for an increase in their minimum wage.

During the Marcos administration, the minimum wage has been  changed and increased at least 12 times due to unjust labor practices, inflation and the type of work.

What exactly is a minimum wage?

It is the lowest wage or salary that an employer is allowed to pay wage earners based on a law, a collective agreement or an individual contract.

Wage earners would mean workers of all types of employment like regular employees, casual, short-term, apprentices or trainees regardless of their job descriptions.

Minimum wages vary per country and as for the Philippines, it varies per region.

For instance, the current minimum wage ranges from P433.76 for a non-agricultural laborer per day in the National Capital Region (NCR). However, a non-agricultural laborer in another region, Caraga, only earns P249.80

With the introduction of other monetary benefits like Cost of Living Allowance or  COLA, there has been an improvement in earnings but coping with the demands of daily living plus the spiraling US dollar appreciation, still makes an average minimum wage earner struggle.

Because of this, the Wage Rationalization Act was first introduced in 1989.

This law includes the Regional Tripartite Wages and Productivity Boards as well as the National Wages and Productivity Commission.

These agencies coordinate and work together to determine how much the minimum wage should be per region of the Philippines based on their geographical locations and evolving situations.

Improving the lives of Filipinos is the main goal.

Payroll officers are fully aware that every company in the Philippines should observe the law on minimum wage.

No worker in the Philippines can be paid lower than the mandatory minimum rate.

Paying below the minimum wage is against the law and it is an employer’s responsibility to give what is due to their employees.

Those who fail to pay may be subject to reprimand and even punishment by the government agency concerned.

With this, Payroll should be able to carry out a seamless and system integrated software that computes and comes up with accurate computations

How much is the Philippines’ current minimum wage?

At the lowest amount a worker can be legally paid for his work and services, the current minimum wage is P537, still varying from one region to another.

People in charge of payroll must be fully informed of the current rates.

However, not all jobs are based on a daily rate.

There are jobs that offer monthly rates.

Such jobs require 8 hours of work. 

Here is a table showing minimum wage rates for certain monthly jobs:

Minimum Wage Rates

Time and attendance as well as payroll would be affected by the varying rates per region per job.

Having a cloud-based payroll and HR system, this list is already in mind.

With this list below, here is a reference guide for the minimum wage so as to fine tune payroll processing.

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Automate your payroll processing with easyHR’s cloud-based software solution

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Regional Minimum Wage Range

The monthly salary of employees also differs because of some contributing factors like overtime pay, graveyard shift allowances and food reimbursements.

Work days also vary for each category of work and position of employment.

As a guide, an employee can compute monthly salary equivalent based on the daily statutory minimum wages in the Philippines using this formula:

EMR=(Applicable Daily minimum salary rate x No. of working days)/12.

The below table shows the applicable number of working days for each employee category:

This table can quickly help employees know and compute their monthly minimum wage.

In so doing, one can check whether or not it complies with the assigned minimum wage in a particular region in the Philippines.

With all these tasks and protocol to follow, payroll functions are tedious and hard.

It will be more convenient with the help and assistance of a cloud-based payroll system with system integration, meaning all aspects of payroll are rolled into one software that can do all the dirty jobs in computing, adjusting and coming up with the net pay of workers and employees.

Help manage employees through robust record-keeping and cloud-based payroll and HR processing with EasyHR.

With the following features, EasyHR is your company’s ally in cloud-based payroll and HR preparation.

Here are some features of EasyHR

– one-stop encoding with impeccable system integration

– automatic and accurate computation of payroll system taking into account  important considerations like the minimum wage pay and others

– low cost of deployment and maintenance

– improve employee engagement and experience and minimize unnecessary printing cost.

Starting at Php 3,500 a month, you get to enjoy EasyHR’s efficient  cloud-based payroll and HR software.

Request a demo of EasyHR now by calling +63-32-256-2904 or +639088601619 or send us your inquiry by filling-in this form.

Automate your payroll processing with easyHR’s cloud-based software solution

Click to Learn More.

Automate your payroll processing with easyHR’s cloud-based software solution

Click to Learn More.