Glossary
The words on a job offer, a payslip or a government form, each in one plain sentence, with an example in pesos and the law behind it.
Start here
The ten words everyone meets first.
141 words
Numbers
13th month pay13th month
One twelfth of the basic pay you earned in the year, paid by 24 December.
- In real life
- ₱30,000 basic every month from January to December is a ₱30,000 13th month.
- Why it matters to you
- It is tax-free up to ₱90,000, together with your other bonuses.
13th Month Pay Law (PD 851)
The 1975 decree that requires the 13th month pay.
- In real life
- Its rules set it at one twelfth of a year's basic pay: ₱30,000 on ₱30,000 a month.
- Why it matters to you
- Not paying it is treated as a money claim, filed like other unpaid wages.
₱250,000 tax-free threshold
The first ₱250,000 of taxable income a year pays no income tax.
- In real life
- That's about ₱20,833.33 of taxable pay a month. Below it, no income tax is withheld.
- Why it matters to you
- Many first jobs pay no income tax at all, only SSS, PhilHealth and Pag-IBIG.
₱5,000 net pay floor
In government, deductions may not bring your monthly take-home below ₱5,000.
- In real life
- With loans piling up, payroll must stop where your take-home would fall under ₱5,000.
- Why it matters to you
- It protects you from loan deductions eating your whole salary.
8% income tax option8%
A choice for the self-employed: pay 8% of gross receipts above ₱250,000, in place of graduated rates and percentage tax.
- In real life
- Billing ₱360,000 a year: 8% × (₱360,000 − ₱250,000) is ₱8,800 for the year.
- Why it matters to you
- It's only for gross receipts up to ₱3,000,000 a year, and you pick it at the start of the year.
₱90,000 tax-free limit
Your 13th month and other bonuses are tax-free up to ₱90,000 a year combined.
- In real life
- A ₱30,000 13th month and a ₱70,000 bonus make ₱100,000. Only ₱10,000 is taxed.
- Why it matters to you
- Most people's 13th month is fully tax-free.
Letter A
Allowance
Money paid on top of basic pay for a purpose, like transport or meals.
- In real life
- ₱20,000 basic with a ₱3,500 transport allowance: SSS counts ₱23,500. PhilHealth counts ₱20,000.
- Why it matters to you
- An allowance is taxed unless it is de minimis, and SSS and Pag-IBIG count it.
Amortizationhulog
The fixed payment that pays a loan down, usually once a month.
- In real life
- An SSS salary loan is paid back in 24 equal monthly amortizations, which your employer takes from your pay and sends to SSS.
- Why it matters to you
- It stays on every payslip until the loan is paid, so knowing the months left tells you when your take-home goes back up.
Annualization
Working out your tax for the whole year. Payroll does it only in December, or with your last pay if you leave, to square the year.
- In real life
- Your ₱27,550 taxable a month is ₱330,600 a year, so the year's tax is ₱12,090. Payroll compares that with what it withheld by the table and settles the difference.
- Why it matters to you
- Each payday uses BIR's withholding table. Annualizing is the year-end true-up, not a way to withhold each payday.
Letter B
Basic paybasic
The fixed pay for your job, before anything is added or taken off.
- In real life
- Your offer says ₱30,000 a month basic. That is your basic pay, even if allowances or overtime come on top.
- Why it matters to you
- Most other numbers, like your 13th month, daily rate and PhilHealth, are worked out from it.
Batas Kasambahay (RA 10361)Batas Kasambahay
The law for domestic workers: minimum wage, rest, leave, the 13th month and SSS, PhilHealth and Pag-IBIG.
- In real life
- It requires a pay slip, and the employer pays all premiums below ₱5,000 a month.
- Why it matters to you
- A kasambahay has rights in writing, like any employee.
BIR
The Bureau of Internal Revenue: the agency that collects income tax.
- In real life
- The tax withheld from your pay goes to the BIR under your TIN.
- Why it matters to you
- Your Form 2316 and any return you file are with the BIR.
BIR Form 17001700
The yearly income tax return for people who earn only salary but can't use substituted filing.
- In real life
- Changed jobs in July? You file a 1700 by 15 April next year, using the 2316 from each employer.
- Why it matters to you
- Miss it and the BIR can charge penalties, even if all your tax was withheld.
BIR Form 17011701
The yearly income tax return for mixed income earners and others not covered by Forms 1700 or 1701A.
- In real life
- A nurse with a salary who also earns from home care on the side files a 1701 by 15 April.
- Why it matters to you
- Salary plus a side business means this form, not the 1700.
BIR Form 1701A1701A
The yearly income tax return for people who earn only from business or a profession, on the 8% rate or the 40% standard deduction.
- In real life
- A freelancer billing ₱30,000 a month on the 8% option files a 1701A by 15 April.
- Why it matters to you
- It is the usual year-end form for a full-time freelancer.
BIR Form 1701Q1701Q
The quarterly income tax return for the self-employed.
- In real life
- Due 15 May, 15 August and 15 November for the first three quarters. The fourth goes in the yearly 1701 or 1701A.
- Why it matters to you
- The first 1701Q of the year is where many freelancers choose the 8% rate.
BIR Form 23162316
The certificate your employer gives you showing your pay for the year and the tax withheld.
- In real life
- You get it by 31 January of the next year, or with your last pay if you leave earlier.
- Why it matters to you
- Banks and visa offices ask for it, and your next employer needs it if you change jobs mid-year.
BIR Form 2551Q2551Q
The quarterly return for percentage tax, filed by sellers and professionals who aren't VAT-registered.
- In real life
- It is filed within 25 days after each quarter ends.
- Why it matters to you
- On the 8% option you don't pay percentage tax, so you skip this return.
Bonus
Extra pay on top of salary, like a year-end or performance bonus.
- In real life
- A ₱20,000 bonus plus a ₱30,000 13th month is ₱50,000: under the ₱90,000 limit, so no tax on either.
- Why it matters to you
- Bonuses and the 13th month share one tax-free limit a year.
Letter C
Cash advancebale
Pay you get before payday, taken back from a later payslip.
- In real life
- A cash advance taken on the 5th comes off the payslip on the 15th.
- Why it matters to you
- It isn't extra pay: it's your own pay early, so expect a smaller payslip after.
Cash gift
₱5,000 for each government employee, paid with the Year-End Bonus.
- In real life
- With the Year-End Bonus on SG 15 Step 1, November brings ₱47,178.
- Why it matters to you
- Like the bonuses, it counts toward the tax-free limit.
Certificate of Employment (COE)COE
A letter from an employer that says you worked there, for how long and in what job.
- In real life
- For a kasambahay, the employer must give one within 5 days of being asked.
- Why it matters to you
- Your next employer, a bank or an embassy may ask for it.
Clearance
A company's sign-off that you returned its things and settled what you owe, before your final pay is released.
- In real life
- Return the laptop and ID, get each department to sign, then final pay follows.
- Why it matters to you
- It's company practice. The law still bars an employer from keeping your wages without a lawful reason.
COLA
A cost of living allowance: an amount added to pay, often set by a wage order.
- In real life
- ₱20,000 basic and a ₱1,000 COLA: SSS counts ₱21,000, PhilHealth counts ₱20,000.
- Why it matters to you
- It counts for SSS, but not for your 13th month or PhilHealth.
Commissionskomisyon
Pay worked out as a share of what you sell.
- In real life
- ₱2,000 on a ₱40,000 sale is a 5% commission. It is income, taxed like salary.
- Why it matters to you
- The tax law lists commissions as income, and SSS counts them too.
Company loan
Money your employer lends you and takes back from each payday until it's paid.
- In real life
- A loan paid back at a fixed amount each kinsenas shows on your payslip until the balance is zero.
- Why it matters to you
- It needs your written agreement, and paying back a loan doesn't lower your tax.
Compensation income
Income from being someone's employee: salary, wages, commissions and similar pay.
- In real life
- An employee with one job and nothing else earns purely compensation income.
- Why it matters to you
- It decides which tax form fits you: 1700, 1701 or none at all.
Cooperative deduction
Share capital, savings and coop loan payments your employer takes from pay and sends to the cooperative.
- In real life
- You sign a written instrument once; payroll then deducts each payday until the coop loan is paid.
- Why it matters to you
- The employer must deduct and remit once you've signed, and it all comes out of pay that's already taxed.
COS and JO workersCOS/JO
People working for a government office on a contract of service or job order, not as its employees.
- In real life
- Since AO 43 s.2026, the agency can take your SSS, PhilHealth and Pag-IBIG from your pay, if you agree to it first.
- Why it matters to you
- Your pay follows contractor rules: tax is withheld like a professional fee, and benefits are yours to pay.
Creditable withholding tax
Tax a client takes from your fee and pays to the BIR for you. You subtract it from the tax you owe later.
- In real life
- On a ₱30,000 professional fee, a client withholds 5%, ₱1,500, if your gross for the year stays at ₱3 million or less. Above that, 10%.
- Why it matters to you
- It is money already paid toward your tax, so keep each client's certificate.
CSC
The Civil Service Commission: the agency for the government workforce and its rules.
- In real life
- The Career Service Examination, the exam for civil service eligibility, is run by the CSC.
- Why it matters to you
- If you work in government, its rules sit beside your agency's.
Letter D
Daily ratearawan
What one day of your work is worth: your monthly pay times 12, divided by the days you are paid in a year.
- In real life
- ₱30,000 × 12 ÷ 261 (a five-day week) is ₱1,379.31 a day. On a six-day week it's ÷ 313, ₱1,150.16. Paid for every day of the year, rest days too, it's ÷ 365, ₱986.30.
- Why it matters to you
- Overtime, holiday pay, leave in cash and absences are all worked out from it.
DBM
The Department of Budget and Management: it issues the circulars that set government pay and bonuses.
- In real life
- The 2026 salary schedule came out as DBM's NBC 601.
- Why it matters to you
- Government pay questions often end at a DBM circular.
De minimis benefitsde minimis
Small benefits the BIR lets you receive tax-free, each up to a set limit.
- In real life
- A rice subsidy up to ₱2,500 a month, a laundry allowance up to ₱400 a month, or a uniform allowance up to ₱8,000 a year.
- Why it matters to you
- Anything above a limit isn't lost: it joins your 13th month in the tax-free limit.
Deductionskaltas
The amounts taken out of your gross pay before you are paid.
- In real life
- On ₱30,000: ₱1,007.40 income tax, ₱1,500 SSS, ₱750 PhilHealth and ₱200 Pag-IBIG.
- Why it matters to you
- The law lists which deductions an employer may make. Anything else needs your written OK.
Where ₱30,000 a month goes - Take-home₱26,542.60
- Income tax₱1,007.40
- SSS₱1,500
- PhilHealth₱750
- Pag-IBIG₱200
DOLE
The Department of Labor and Employment: the government office for private-sector work rules.
- In real life
- Unpaid overtime or a missing 13th month? DOLE is where to ask after HR.
- Why it matters to you
- Wage boards and the NLRC both sit under it.
Letter E
Employees' Compensation (EC)EC
Insurance for injuries and illness from work, paid by your employer alone.
- In real life
- On your payslip, EC shows on the employer's side only. Nothing comes off your pay for it.
- Why it matters to you
- If you're hurt at work, it is a benefit on top of SSS sickness pay.
EO 64 s.2024
The order that raises government salaries in four tranches, one each January from 2024 to 2027.
- In real life
- The third tranche, in force in 2026, sets SG 15 Step 1 at ₱42,178.
- Why it matters to you
- It also sets how much of the national rates an LGU pays, by its income class.
Letter F
Final payback pay
Everything you're still owed when you leave a job: unpaid salary, the 13th month so far, unused leave in cash and any separation pay.
- In real life
- Leaving at the end of June on ₱30,000: half a year's 13th month is ₱15,000, on top of your last salary.
- Why it matters to you
- Your employer also owes you Form 2316 with it. Ask when it will be released.
First Time Jobseekers Act (RA 11261)
A law that waives government fees, once, for the papers a first-time jobseeker needs.
- In real life
- Police and NBI clearance, barangay clearance, PSA birth certificate, your TIN and UMID card, free the first time.
- Why it matters to you
- Get a barangay certification that you're a first-time jobseeker before you start.
Freelancer or self-employedfreelancer
Someone paid by clients, not employed. You pay your own tax and the full SSS, PhilHealth and Pag-IBIG.
- In real life
- Billing ₱30,000 a month, SSS is the full 15% of your salary credit, since no employer shares it.
- Why it matters to you
- SSS coverage is required for the self-employed too.
Fund Salary
The pay Pag-IBIG counts: basic pay and allowances, up to ₱10,000.
- In real life
- ₱8,000 basic and a ₱2,000 allowance make a ₱10,000 Fund Salary, so ₱200 a month, not ₱160.
- Why it matters to you
- At ₱1,500 or less, your share drops to 1%.
Letter G
General Appropriations Act (GAA)GAA
The yearly budget law. Its general rules set government pay items like PERA and the net pay floor.
- In real life
- The FY 2026 GAA is RA 12314. Sec. 63 sets PERA, Sec. 64 the uniform allowance.
- Why it matters to you
- Some government pay rules change only through it, once a year.
Graduated tax rates
The tax table where each slice of income is taxed at its own rate, from 0% up to 35%.
- In real life
- ₱330,600 taxable a year: the first ₱250,000 is free and the next ₱80,600 is taxed 15%, so ₱12,090.
- Why it matters to you
- A raise never lowers your take-home: only the slice above a line pays the higher rate.
Income tax rate on each slice of a year's taxable income - Up to ₱250,0000%
- ₱250,000 to ₱400,00015%
- ₱400,000 to ₱800,00020%
- ₱800,000 to ₱2,000,00025%
- ₱2,000,000 to ₱8,000,00030%
- Over ₱8,000,00035%
Gross pay
All your pay for the period before deductions: basic pay plus allowances, overtime and the rest.
- In real life
- On ₱30,000 basic with nothing added, your gross is ₱30,000 a month.
- Why it matters to you
- Job offers quote gross. What reaches your account is smaller.
Where ₱30,000 a month goes - Take-home₱26,542.60
- Income tax₱1,007.40
- SSS₱1,500
- PhilHealth₱750
- Pag-IBIG₱200
GSIS
The insurance and pension fund for government employees, in place of SSS.
- In real life
- 9% of basic salary from you, 12% from the government. SG 15 Step 1 (₱42,178) pays ₱3,796.02.
- Why it matters to you
- It's required for government employees whatever their status, but not for contract workers who aren't employees.
GSIS Act of 1997 (RA 8291)
The law behind GSIS: required membership for government employees and the 9% and 12% contribution.
- In real life
- 9% from you and 12% from the government, on your basic salary.
- Why it matters to you
- It's why government payslips show GSIS in place of SSS.
GSIS Multi-Purpose Loan (MPL)GSIS MPL
A cash loan from GSIS for its members, paid back through government payroll.
- In real life
- It sits on your payslip with the other loans. GSIS loans come before most other deductions.
- Why it matters to you
- Government take-home can't drop below a floor, and GSIS is near the front of the line.
Letter H
Hazard pay
Extra pay for work that puts you at risk.
- In real life
- For a minimum wage earner, hazard pay is free of income tax, like their wage.
- Why it matters to you
- In government, hazard duty pay follows the rules in the yearly budget law.
HMO for dependentsHMO ng dependents
Your share of the company HMO plan for a spouse, child or parent you add, taken from your pay.
- In real life
- The company often pays for your own card; adding a parent or child is usually on you, every payday.
- Why it matters to you
- It comes out of pay that's already taxed: since TRAIN, a salary gets no deduction for health insurance.
Holiday pay
Your daily wage for a regular holiday, even when you don't work.
- In real life
- Not working on Labor Day? You still get the day's ₱1,379.31. Working it, ₱2,758.62.
- Why it matters to you
- Retail and service shops with fewer than 10 workers are exempt.
Hourly rate
Your daily rate divided by 8, the normal hours in a working day.
- In real life
- ₱1,379.31 a day ÷ 8 is ₱172.41 an hour.
- Why it matters to you
- Overtime and night differential are counted per hour, from this rate.
Letter I
Incentives
Extra pay that follows the work, like a fee per patient or per unit, on top of basic pay.
- In real life
- ₱25,000 basic plus ₱5,000 in incentives a month: SSS counts ₱30,000, and the ₱5,000 is taxed like salary.
- Why it matters to you
- It is pay for work, so tax, SSS and Pag-IBIG count it. PhilHealth doesn't.
Letter K
Kasambahaykasambahay
A domestic worker in a household. The Batas Kasambahay sets their pay and benefits.
- In real life
- After a month, SSS, PhilHealth and Pag-IBIG apply. Below ₱5,000 a month, the employer pays all of it.
- Why it matters to you
- A kasambahay also gets a 13th month and 5 days of paid leave after a year, though unused days don't turn into cash.
Letter L
Labor Code
The main law on private-sector work: pay, hours, leave, holidays, and how a job can end.
- In real life
- Overtime (Art. 87), holiday pay (Art. 94) and service incentive leave (Art. 95) are all in it.
- Why it matters to you
- Some articles now have new numbers, so you may see two numbers for the same rule.
Leave monetizationleave conversion
Getting cash for unused leave days.
- In real life
- 12 unused days at ₱1,379.31 is ₱16,551.72, all tax-free for a private employee.
- Why it matters to you
- Up to 12 days a year are tax-free in private work. In government, the whole amount is.
LGU income class
A province, city or town's class by its income. It sets what share of the national salary rates its staff get.
- In real life
- A 3rd class town pays 80% of the national rate: SG 11 Step 1 is ₱31,705 × 80%, ₱25,364.
- Why it matters to you
- Two people in the same grade can earn different pay in different towns.
Letter M
Managerial employee
An employee whose main job is to manage the business or a part of it. The rules on hours, overtime and holiday pay don't cover them.
- In real life
- A department head may get no overtime pay, by law, even after a late night.
- Why it matters to you
- A job title alone doesn't make you managerial. The actual work decides.
Maternity leave
105 days of paid leave for a birth, 15 days more for a solo mother, 60 days for a miscarriage.
- In real life
- A mother may give up to 7 of her 105 days to the child's father, married or not.
- Why it matters to you
- SSS pays the benefit for private workers, so check your contributions are posted.
Mid-Year Bonus
One month's basic salary as of 15 May, paid to government employees no earlier than 15 May.
- In real life
- SG 15 Step 1: a ₱42,178 Mid-Year Bonus.
- Why it matters to you
- It shares the ₱90,000 tax-free limit with your other bonuses.
Minimum wage
The lowest daily pay the law allows in your region, set by a wage order.
- In real life
- Metro Manila's minimum for most workers is ₱755 a day. On a five-day week that's ₱16,421.25 a month.
- Why it matters to you
- If your daily rate is below it, the employer owes the difference.
Minimum wage earner (MWE)MWE
A private worker paid the minimum wage. Their wage, holiday pay, overtime, night differential and hazard pay are free of income tax.
- In real life
- ₱755 a day in Metro Manila on a five-day week is ₱16,421.25 a month, with no income tax on it.
- Why it matters to you
- SSS, PhilHealth and Pag-IBIG still apply, and so does tax on taxable extras.
Mixed income earner
Someone who earns a salary and also runs a business or practices a profession.
- In real life
- An office worker who also sells online is a mixed income earner and files Form 1701.
- Why it matters to you
- Your side income has its own tax, on top of what your employer withholds.
Money claims
Claims for unpaid pay or benefits must be filed within 3 years of when they became due.
- In real life
- A 13th month unpaid in December 2026 must be claimed by December 2029.
- Why it matters to you
- Wait too long and the claim is lost, however fair it is.
Monthly Basic Salary (MBS)MBS
The pay PhilHealth counts: your basic pay only, from ₱10,000 to ₱100,000.
- In real life
- ₱30,000 basic plus a ₱3,000 allowance is still a ₱30,000 MBS, so PhilHealth stays ₱750 from you.
- Why it matters to you
- Allowances and overtime don't raise your PhilHealth.
Monthly rate
Pay quoted as a fixed amount a month, the same in a short month and a long one.
- In real life
- ₱30,000 a month is ₱360,000 a year, before the 13th month.
- Why it matters to you
- Monthly-paid workers are usually paid for rest days and holidays inside that amount.
Monthly Salary Credit (MSC)MSC
The rounded pay SSS uses to work out your contribution and benefits, in ₱500 steps.
- In real life
- Pay of ₱23,240 sits in the ₱23,000 step, so SSS from you is 5% of ₱23,000, ₱1,150. It runs from ₱5,000 to ₱35,000.
- Why it matters to you
- Your benefits follow your salary credit, not your exact pay.
Pay of ₱23,240 rounds to its salary credit - ₱22,500₱22,250 to ₱22,749.99
- ₱23,000₱22,750 to ₱23,249.99Your pay is here
- ₱23,500₱23,250 to ₱23,749.99
SSS from you: 5% of ₱23,000 = ₱1,150
MySSS Pension Booster
A savings account inside SSS. The part of your salary credit above ₱20,000 goes there, and you can add more yourself.
- In real life
- On ₱30,000, ₱20,000 of your salary credit goes to regular SSS and ₱10,000 to the Pension Booster.
- Why it matters to you
- It is your own savings with SSS, paid out on top of your pension.
Letter N
National Budget Circular (NBC)NBC
A DBM circular telling government offices how to carry out a budget rule, like a new salary schedule.
- In real life
- NBC 601, dated 22 January 2026, carries the 2026 salary schedule: SG 15 Step 1 at ₱42,178.
- Why it matters to you
- When people ask where a government salary figure is from, the answer is often an NBC.
Net pay
What is left of your gross pay after every deduction on the payslip.
- In real life
- ₱30,000 gross, less ₱3,457.40 for tax, SSS, PhilHealth and Pag-IBIG, is ₱26,542.60 net.
- Why it matters to you
- It is the number to plan your budget on, not the gross.
Where ₱30,000 a month goes - Take-home₱26,542.60
- Income tax₱1,007.40
- SSS₱1,500
- PhilHealth₱750
- Pag-IBIG₱200
Night differentialnight diff
At least 10% more of your hourly rate for each hour worked between 10pm and 6am.
- In real life
- At ₱172.41 an hour, each night hour adds at least ₱17.24.
- Why it matters to you
- Night shift work, like in a call center, should show this line on the payslip.
NIRC (Tax Code)Tax Code
The National Internal Revenue Code: the main tax law, changed over the years by laws like TRAIN.
- In real life
- The section on what counts as income (Sec. 32) is why commissions are taxed like salary.
- Why it matters to you
- BIR regulations, like the withholding tables, carry it out.
NLRC
The National Labor Relations Commission, attached to DOLE, which hears labor cases like illegal dismissal.
- In real life
- If a claim isn't settled at SEnA, it can go to an NLRC labor arbiter.
- Why it matters to you
- It's where a case goes when talking it out didn't work.
NWPC
The National Wages and Productivity Commission, attached to DOLE, which oversees the regional wage boards.
- In real life
- Every region's current wage order is posted on the NWPC site.
- Why it matters to you
- It's where to check the minimum wage where you work.
Letter O
Optional standard deduction (OSD)OSD
For the self-employed: deduct a flat 40% of gross receipts as expenses, without receipts, then apply graduated rates.
- In real life
- ₱360,000 of receipts less 40% leaves ₱216,000 taxable.
- Why it matters to you
- It's the simple alternative to the 8% rate if you don't keep expense records.
Outstanding balancenatitirang utang
What you still owe on a loan today.
- In real life
- Paying an SSS salary loan off early means paying its outstanding balance: what's left of the principal, plus interest and any penalty to date.
- Why it matters to you
- If you leave your job, your employer takes the whole balance of an SSS salary loan from your final pay.
Overtime payOT
Pay for work past 8 hours in a day: your hourly rate plus at least 25%.
- In real life
- At ₱172.41 an hour, one overtime hour on a normal day is ₱215.51.
- Why it matters to you
- Overtime on a rest day or holiday pays more than on a normal day.
Letter P
Pag-IBIG
A savings fund that also lends for housing. What you put in comes back to you, with dividends.
- In real life
- 2% of up to ₱10,000 of pay. On ₱30,000: ₱200 from you and ₱200 from your employer.
- Why it matters to you
- It is savings, not a fee, and it opens the door to a housing loan.
Pag-IBIG Fund Law (RA 9679)Pag-IBIG law
The law behind Pag-IBIG: membership, contributions, savings and housing loans.
- In real life
- It sets a 20-year membership term, and lets a non-working spouse join on their own.
- Why it matters to you
- It's why Pag-IBIG is savings you get back, not a tax.
Pag-IBIG housing loan
A loan from Pag-IBIG to buy, build or fix a home, for members in good standing.
- In real life
- Members who keep paying their monthly contribution can apply. The law tells the Fund to make sure lower-income members get loans too.
- Why it matters to you
- It is one of the main reasons the contribution is worth paying.
Pag-IBIG Multi-Purpose Loan (MPL)Pag-IBIG MPL
A cash loan from Pag-IBIG that your employer pays back from your pay each month.
- In real life
- It shows on your payslip as a loan line, separate from the Pag-IBIG contribution.
- Why it matters to you
- A loan line lowers your take-home until it's paid off.
Pag-IBIG savings
What you and your employer paid into Pag-IBIG, plus dividends, which you get back.
- In real life
- ₱400 a month from both shares is ₱4,800 a year, before dividends.
- Why it matters to you
- Membership runs 20 years (240 monthly contributions), then you can claim it.
Paternity leave
Seven days of paid leave for a married father, for each of the first four deliveries of his wife.
- In real life
- Separately, a mother can give the father up to 7 of her maternity leave days.
- Why it matters to you
- It covers private and government workers alike.
Paydaysahod
The day your pay is released.
- In real life
- Paid on the 15th and the 30th, February's second payday falls on its last day.
- Why it matters to you
- Payday must come at least twice a month, with no more than 16 days between paydays.
Payroll cutoffcutoff
The dates of work that one payday pays for.
- In real life
- A company might pay work from the 26th to the 10th on the 15th, then the 11th to the 25th on the 30th.
- Why it matters to you
- Your first payslip may cover only part of a cutoff, so it can look small.
Payslippay slip
The paper or screen that lists what you earned and what was taken off for one payday.
- In real life
- A ₱30,000 month shows basic ₱30,000, then tax ₱1,007.40, SSS ₱1,500, PhilHealth ₱750, Pag-IBIG ₱200.
- Why it matters to you
- Check it every payday. A wrong line is easier to fix early.
PERA
The Personnel Economic Relief Allowance: ₱2,000 a month on top of a government salary.
- In real life
- SG 15 Step 1 earns ₱42,178 basic, plus ₱2,000 PERA.
- Why it matters to you
- It is an allowance, separate from your basic salary.
Percentage tax
A tax of 3% of gross quarterly sales or receipts, for those who aren't VAT-registered.
- In real life
- ₱90,000 of receipts in a quarter is ₱2,700 in percentage tax.
- Why it matters to you
- Choosing the 8% option replaces it, so you don't pay both.
Performance-Based Bonus (PBB)PBB
A yearly bonus for government employees that depends on performance, the agency's and their own.
- In real life
- It sits beside the PEI in the government's performance-based incentive system.
- Why it matters to you
- It's never certain, so don't count on it in your budget until it's announced.
PhilHealth
The national health insurance. It pays part of your hospital bills.
- In real life
- 5% of basic pay, split evenly. On ₱30,000: ₱1,500, so ₱750 from you and ₱750 from your employer.
- Why it matters to you
- It covers you and your dependents when someone is confined.
Probationary employeeprobi
A new hire on trial, for no more than 6 months, against standards made known at hiring.
- In real life
- Hired 1 March on probation? Kept past 1 September, you're regular.
- Why it matters to you
- Probation changes nothing about tax, SSS, PhilHealth or Pag-IBIG: you pay them from your first payday.
Productivity Enhancement Incentive (PEI)PEI
₱5,000 for each qualified government employee, paid no earlier than 15 December.
- In real life
- Mid-Year Bonus, Year-End Bonus, cash gift and a ₱5,000 PEI make up most of a government employee's extras.
- Why it matters to you
- It is part of the same incentive system as the PBB.
Project or contractual employeecontractual
An employee hired for a specific project or season, with the end set when they are hired.
- In real life
- Hired to build one mall, the job ends when the project does.
- Why it matters to you
- If you keep doing the company's usual work, the law may treat you as regular.
PSA
The Philippine Statistics Authority: it keeps civil records and publishes national statistics, wages included.
- In real life
- First-time jobseekers can get a PSA birth certificate free, once.
- Why it matters to you
- Many first-job papers start with a PSA birth certificate.
Letter R
RA 9504
The 2008 law that freed minimum wage earners from income tax on their wage and some extras.
- In real life
- Holiday pay, overtime, night differential and hazard pay of a minimum wage earner are tax-free too.
- Why it matters to you
- It's the basis of the minimum wage earner exemption still used today.
RDO
Your Revenue District Office: the local BIR office where you are registered.
- In real life
- Every BIR return asks for your RDO code, right beside your TIN.
- Why it matters to you
- To change your registered address, you go to your RDO with BIR Form 1905.
Regular employeeregular
An employee doing work that's usually needed in the employer's business, with no end date.
- In real life
- A teller at a bank, past probation, is a regular employee whatever the contract calls it.
- Why it matters to you
- A regular employee can be let go only for a just or authorized cause.
Regular holiday
A national holiday, like Christmas Day, when you are paid even if you don't work, and paid twice your rate if you do.
- In real life
- Work on a regular holiday at ₱1,379.31 a day and the day pays ₱2,758.62.
- Why it matters to you
- It pays more than a special day. Check which kind a day is before you agree to work.
Resignation notice30 days
Written notice you give your employer at least one month before you leave, when you resign without a just cause.
- In real life
- Resigning effective 30 November? Hand in your letter by 31 October.
- Why it matters to you
- Leaving without notice can make you liable for damages.
Rest dayday off
At least 24 hours off in a row after every six working days.
- In real life
- Work on your rest day at ₱1,379.31 a day and the day pays at least ₱1,793.10.
- Why it matters to you
- Your employer sets the day, but should respect your choice if it's for your religion.
Retirement pay
At 60 to 65 with at least 5 years of service, half a month's pay for each year, when there's no better company plan.
- In real life
- Half a month here means 22.5 days. 20 years at ₱1,379.31 a day is about ₱620,689.50.
- Why it matters to you
- The 22.5 days are 15 days, plus 5 days of leave, plus a twelfth of the 13th month.
Retirement Pay Law (RA 7641)
The law that gives retirement pay to private employees with no better plan, at 60 to 65 after 5 years.
- In real life
- Half a month's pay per year of service, which the law counts as 22.5 days: ₱620,689.50 after 20 years on ₱30,000.
- Why it matters to you
- Retail, service and farm businesses with 10 workers or fewer are exempt.
RTWPB (wage board)wage board
The regional wage board that sets the minimum wage in its region through wage orders.
- In real life
- Metro Manila's board issued Wage Order NCR-28, setting ₱755 a day.
- Why it matters to you
- Minimum wages differ by region because each board sets its own.
Letter S
Safe to spendpang-gastos
What's left of a payday after your set-asides, divided by the days until the next payday.
- In real life
- ₱3,000 left after bills, rent and padala, with 15 days to the next payday, is ₱200 a day.
- Why it matters to you
- The law keeps paydays at most 16 days apart, so a payday's money only has to last that long.
Salary Grade (SG)SG
The level, from 1 to 33, that sets a government position's monthly salary.
- In real life
- SG 1 Step 1 is ₱14,634 a month in 2026. SG 15 Step 1 is ₱42,178.
- Why it matters to you
- Your grade and step tell you your basic salary to the peso.
Salary Standardization Law (SSL)SSL
The rules that put every government position on one salary schedule by grade and step.
- In real life
- The first SSL was RA 6758 in 1989. The schedule in force in 2026 is SSL VI, from EO 64 s.2024.
- Why it matters to you
- When a new SSL tranche starts, every grade's pay rises on the same day.
Security of tenure
A regular employee can be let go only for a just cause or a cause the law allows.
- In real life
- Dismissed without cause? The law gives back your job and your full backwages.
- Why it matters to you
- It's the reason regularization matters.
Semi-monthly paykinsenas
Being paid twice a month, usually around the 15th and the 30th.
- In real life
- A ₱26,542.60 take-home month comes as two paydays of about ₱13,271.30 each.
- Why it matters to you
- The law says pay comes at least twice a month, no more than 16 days apart.
SEnA
The Single Entry Approach: a required talk with a DOLE officer to settle a work dispute before it becomes a case.
- In real life
- Final pay late for months? You file a request at DOLE, and both sides meet with a mediator.
- Why it matters to you
- It is usually faster and cheaper than a full labor case.
Separation pay
Money owed when your employer ends your job for a reason the law allows, like redundancy or closure.
- In real life
- 5 years at ₱30,000, let go for redundancy: one month per year, ₱150,000. For retrenchment: half a month per year, ₱75,000.
- Why it matters to you
- Resigning on your own usually doesn't come with it, unless your contract or company policy says so.
Service charge
The service charge hotels and restaurants collect goes, all of it, to the covered workers in equal shares.
- In real life
- ₱90,000 collected in a period, shared by 30 rank-and-file staff, is ₱3,000 each.
- Why it matters to you
- Managers don't share in it, and it comes on top of your pay.
Service incentive leave (SIL)SIL
Five days of paid leave a year, once you have worked one year.
- In real life
- At ₱1,379.31 a day, five days of leave are worth ₱6,896.55.
- Why it matters to you
- Many companies give more. The law sets 5 days as the floor.
Service Recognition Incentive (SRI)SRI
A one-time incentive for government employees, set by an order for each year.
- In real life
- For 2025 it was up to ₱20,000 for each qualified employee in the Executive branch.
- Why it matters to you
- It's set year by year, so its amount isn't known until the order comes out.
Social Security Act of 2018 (RA 11199)SSS law
The law behind SSS: who must be covered, the contribution rate, and the benefits.
- In real life
- It raised SSS in steps to 15% by 2025, with a salary credit up to ₱35,000.
- Why it matters to you
- Its rules decide your SSS line, your loans and your pension.
Solo parent leave
Up to 7 working days of paid leave a year for a solo parent who has worked at least 6 months.
- In real life
- It applies whatever your employment status, and doesn't carry over to next year.
- Why it matters to you
- Ask HR what proof they need, such as a solo parent ID.
Special non-working day
A day off declared each year. Work on it pays at least 30% more.
- In real life
- Work on a special day at ₱1,379.31 a day and the day pays ₱1,793.10. On your rest day too, 50% more.
- Why it matters to you
- The President's proclamation each year says which days are special and which are regular.
SSS
The social security fund for private workers. It pays your pension, sickness, maternity and unemployment benefits.
- In real life
- In 2026 SSS is 15% of your salary credit: 5% from you, 10% from your employer. On ₱30,000 that's ₱1,500 from you and ₱3,000 from them.
- Why it matters to you
- Every month paid in counts toward your loans and your pension, so check that it's posted.
SSS pension
A monthly pension from SSS when you retire, once you've paid at least 120 monthly contributions.
- In real life
- It grows with your salary credit and the years you paid in.
- Why it matters to you
- Every unpaid month is a month missing from your pension later.
SSS Salary Loan
A cash loan from SSS of one or two months of your average salary credit.
- In real life
- A one-month loan needs 36 posted contributions, 6 of them in the last 12 months. It is paid back through payroll.
- Why it matters to you
- It's there for emergencies, but payments come off every payslip until it's done.
SSS sickness benefit
A daily cash benefit from SSS when illness or injury keeps you from work for at least 4 days.
- In real life
- It pays 90% of your average daily salary credit, for up to 120 days a year.
- Why it matters to you
- Tell your employer within 5 days of being confined, unless you're in hospital or were hurt at work.
SSS unemployment benefit
Cash from SSS for up to two months when you lose your job through no fault of your own.
- In real life
- It pays half your average salary credit. You need 36 contributions, 12 in the last 18 months.
- Why it matters to you
- It's for being let go, not for resigning, and only once every three years.
Step incrementstep
A move up one step within your Salary Grade, which raises your pay a little.
- In real life
- SG 15 goes from ₱42,178 at Step 1 to ₱42,594 at Step 2. Each grade has up to 8 steps.
- Why it matters to you
- A step comes without a promotion, through years of good service in the same position.
Substituted filing
When your Form 2316 counts as your income tax return, so you don't file one yourself.
- In real life
- It applies when you had one employer all year, earned only salary, and the tax withheld matched the tax due.
- Why it matters to you
- Two employers in one year, even one after the other, means you file Form 1700 yourself.
Letter T
Take-home paytake-home
The money that actually lands in your account on payday.
- In real life
- A private employee on ₱30,000 a month takes home about ₱26,542.60 under the 2026 rules.
- Why it matters to you
- Compare job offers by take-home, not by gross.
Where ₱30,000 a month goes - Take-home₱26,542.60
- Income tax₱1,007.40
- SSS₱1,500
- PhilHealth₱750
- Pag-IBIG₱200
Taxable income
The part of your pay the income tax is worked out on: gross pay less SSS, PhilHealth, Pag-IBIG and tax-free items.
- In real life
- ₱30,000 less ₱2,450 in contributions is ₱27,550 taxable a month, ₱330,600 a year.
- Why it matters to you
- Your contributions lower your tax a little, because they come off first.
Terminal leave
Cash for all your unused leave credits when you leave government service.
- In real life
- Your highest monthly salary × your leave credits × 0.0481927, the constant factor in DBM's formula.
- Why it matters to you
- Years of saved leave can add up to a large amount when you retire or resign.
TIN
Your Taxpayer Identification Number from the BIR. You keep one for life.
- In real life
- Got a TIN at your first job? Give that same number to every employer after it.
- Why it matters to you
- Getting a second TIN is against the law.
TRAIN law (RA 10963)TRAIN
The 2018 tax reform that set today's income tax table, the ₱250,000 threshold, the ₱90,000 limit and the 8% option.
- In real life
- It sets the table used in 2026: 0% up to ₱250,000, rising to 35% at the top.
- Why it matters to you
- Nearly every income tax number on your payslip traces back to it.
Letter U
Uniform allowance
Up to ₱7,000 a year for a qualified government employee's uniform or clothing.
- In real life
- ₱7,000 sits under the ₱8,000 de minimis limit, so it's tax-free.
- Why it matters to you
- It comes as a yearly amount, separate from your salary.
Union dues
What a union member pays the union each month, taken from pay by check-off with written authorization.
- In real life
- ₱300 of dues on ₱30,000 cuts income tax from ₱1,007.40 to ₱962.50 a month, since dues aren't taxed.
- Why it matters to you
- Like your SSS and PhilHealth, union dues come off your taxable pay, so they cost a little less than they look.
Universal Health Care Act (RA 11223)UHC law
The law that made every Filipino a PhilHealth member and set the premium rate.
- In real life
- It raised PhilHealth in steps to 5% of basic pay in 2024, between ₱10,000 and ₱100,000.
- Why it matters to you
- It's the reason your PhilHealth line is what it is.
Letter V
Voluntary member
An SSS member who keeps paying on their own after leaving a job, or who joins without one.
- In real life
- Between jobs, you can keep paying SSS yourself so your months keep adding up.
- Why it matters to you
- Gaps in contributions can shrink loans and pension later.
Letter W
Wage order
The order a regional wage board issues to set the minimum wage in its region.
- In real life
- Wage Order NCR-28 set Metro Manila's minimum at ₱755 a day from 26 September 2026.
- Why it matters to you
- When a new one takes effect, minimum wage pay must rise from that date.
Wage Rationalization Act (RA 6727)
The law that created the NWPC and the regional wage boards, and moved minimum wage setting to the regions.
- In real life
- Because of it, Metro Manila and Bicol have different minimum wages.
- Why it matters to you
- It explains why your region's wage order, not a national one, sets your minimum.
Withholding taxtax
Income tax your employer takes from each payday, using BIR's withholding table for your pay period, and pays to the BIR for you.
- In real life
- On ₱30,000 a month paid twice a month, ₱503.70 is withheld each payday. The year's tax is ₱12,090, and December squares the difference.
- Why it matters to you
- If the right amount is withheld all year, you usually don't file a return yourself.
Withholding tax table
The BIR's ready-made tables that tell payroll how much tax to take each payday: daily, weekly, twice a month or monthly.
- In real life
- On the monthly table, no tax is withheld up to ₱20,833 of taxable pay. On the twice-a-month table, up to ₱10,417.
- Why it matters to you
- It is the rule for every payday (RR 11-2018). Working out the whole year is only for December, or your last pay if you leave.
Letter Y
Year-end adjustmenttax refund
At the last payroll of the year, or your last pay if you leave, your employer recomputes the year's tax and settles the difference.
- In real life
- Too much withheld comes back to you by 25 January, or with your last pay if you leave. Too little comes off that last pay.
- Why it matters to you
- A bigger or smaller December payslip is often this, not a mistake.
Year-End Bonus
One month's basic salary as of 31 October, paid to government employees from 15 November, with a cash gift.
- In real life
- SG 15 Step 1: ₱42,178, plus the ₱5,000 cash gift.
- Why it matters to you
- It is government's version of the 13th month.