Gross and Net Earnings pdf powerpoint pre

gross and net

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Senior High School –BMATH: Business Mathematics Course
Gross and Net Earnings

2. OBJECTIVES
01
differentiate gross and
net earnings; and
02 compute gross and net earnings.
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Most people are engaged in
backbreaking work to earn
enough money and buy what
they need.

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Some people put in extra
work to afford to own a car, a
house, and high-quality
gadgets.

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In both situations, these
people are concerned about
whether their respective
incomes would be sufficient.

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. . .Take a look!
Mrs.Santos,aprivateschoolteacher,earnsabasicmonthlysalaryof
₱20,400.Inaddition,shealsoreceivesanadditionalpayof₱2,000a
monthforperformingadhoctasks.SupposethatMrs.Santoshasto
payhercontributionspermonth,namely,SSS,Pag-IBIG,and
PhilHealth,whichcost₱922.50,₱100,and₱306,respectively.How
mucharehermonthlynetearnings?
Gross and Net Earnings
✓Mrs. Santos’ monthly net earnings are
₱21,071.50.

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Toknowwhetheryouhavesufficientfundstofinanceyour
needsandwants,youneedtoassessyourincome.

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. . .INCOME
Definition
❑Amount of money employees earn for the work they perform.
❑Also sometimes referred to as pay, compensation, or earning.

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. . .GROSS EARNINGS
Definition
❑the total amount of income over a specific time
❑the income earned after considering all additional pay and before
applying the deductions

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. . .CALCULATING GROSS EARNINGS
Definition
●dependsonthekindofcompensationanindividualreceives
●thesumofallincomemadebytheindividualwithinaspecific
period

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. . .GROSS EARNINGS
Example
1.Determinetheannualgrossearningsofanemployeewhomakes
₱12,000permonth.
Solution:
GrossEarnings=(salarypermonth)(numberofmonthsinayear)
GrossEarnings=(₱12,000permonth)(12months)
GrossEarnings=₱144,000

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. . .GROSS EARNINGS
Example
2.Determinethegrossearningsofanemployeeinoneyearwho
makes₱15,000permonthandreceivesalivingallowanceof₱1,000
monthly.

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. . .GROSS EARNINGS
Example
Solution:
GrossEarnings=(salarypermonth)(numberofmonthsinayear)+(living
allowanceinamonth)(numberofmonthsinayear)
GrossEarnings=(₱15,000permonth)(12months)+(₱1,000permonth)(12
months)
GrossEarnings=₱180,000+₱12,000
GrossEarnings=₱192,000

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. . .Check your progress.
A wage earner in Region 4A receives ₱355 for an eight-
hour workday. If he works for 23 days in one month,
how much will be his gross earnings in one month?

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. . .Let’s try!
Mr.Rabulanisanaccountantwhoearnsabasic
monthlysalaryof₱33,473andariceallowanceof
₱3,000giventohimsixtimesayear.Asidefromthese,
healsohasaninvestmentof₱1,000,000whichearns
9%inayear.Howmucharehisgrossearningsina
year?

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. . .NET EARNINGS
Definition
❑The remaining amount, if any, after all deductions have been
applied.
❑Some people call it “take-home pay”.

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. . .DEDUCTIONS
Definition
❑the amounts being deducted from an employee’s gross earnings
❑Examples: taxes, contributions, insurance, loans payment

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. . .CALCULATING NET EARNINGS
Formula
Net earnings = Gross earnings –Total Deductions

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. . .NET EARNINGS
Example
1.Anemployeewhomakes₱12,000permonthhasanannualgross
earningsof₱144,000.Sincethegrossearningshappenedtobeless
than₱250,000,theemployeeistax-exempt.Supposehepays₱6,480
forSSS,₱1,200forPag-IBIG,and₱3,572forPhilHealth,everyyear.
Howmuchwillbehisnetearnings?

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. . .NET EARNINGS
Example
Solution:
NetEarnings=(grossearnings)−(totaldeduction)
NetEarnings=₱144,000−(₱6,480+₱1,200+₱3,572)
NetEarnings=₱144,000−₱11,252
NetEarnings=₱132,748
Theemployeehasnetearningsof₱132,748inayear.

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. . .NET EARNINGS
Example
2.Anemployeewhomakes₱15,000permonthandreceivesa
monthlylivingallowanceof₱1,000earnsgrossearningsof₱192,000
inayear.Sincethegrossearningshappenedtobelessthan₱250000,
theemployeeistax-exempt.Supposethisemployeepays₱675for
SSS,₱100forPag-IBIG,and₱306forPhilHealth,everymonth.How
muchwillbehisnetearnings?

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. . .NET EARNINGS
Example
Solution:
NetEarnings=(grossearnings)−(totaldeduction)
NetEarnings=₱192000−[(₱675)(12)+(₱100)(12)+(₱306)(12)]
NetEarnings=₱192000−(₱8100+₱1200+₱3572)
NetEarnings=₱192000−₱12872
NetEarnings=₱179,128
Theemployeehasnetearningsof₱179,128inayear.

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. . .Check your progress.
A minimum wage earner earns ₱13,800 for his gross
earnings. Since a minimum wage earner is tax-exempt,
suppose this employee pays ₱360 for SSS, ₱100 for
Pag-IBIG, and ₱203 for PhilHealth in a month. How
much will be his net earnings in a month?

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. . .Let’s try!
Mr. Chan makes ₱607,934 in a year. Suppose that
monthly he pays ₱2,299 for taxes, ₱1,125 for SSS, ₱100
for Pag-IBIG, and ₱460.25 for PhilHealth every month.
How much will be his net earnings in a year?

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Thank you for listening!
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