Glossary

What is Basic salary?

The fixed pay an employee earns for the regular working time, before allowances, overtime, premiums, bonuses and deductions.

Basic salary is the base for the 13th month pay, SSS, PhilHealth and Pag-IBIG contributions, and the daily and hourly rates from which overtime and holiday premiums are computed.

Employers sometimes label part of the monthly package as an allowance. Whether that allowance counts as basic salary depends on whether it is paid regardless of work performed and how it is treated in the contract and company policy, so it is worth defining clearly in each contract.

Related terms

  • 13th month pay: A mandatory yearly benefit equal to one twelfth of an employee's total basic salary earned in the calendar year, due on or before December 24 under Presidential Decree No. 851.
  • Alphalist: The list of employees, with their compensation and the tax withheld from each, that an employer submits to the BIR together with the annual information return.
  • BIR Form 2316: The Certificate of Compensation Payment and Tax Withheld that an employer issues to each employee for a calendar year.
  • Certificate of employment: A document issued by an employer stating that a person worked for the company, with the dates of employment and the positions held.

Compute it in OneHRIS

OneHRIS applies Philippine pay and compliance rules in every payroll run. See the Help Center for step-by-step guides, try the free calculators, or see pricing.

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