In the Philippine labor landscape, the relationship between an employer and an employee is governed by the Labor Code of the Philippines and various issuances from the Department of Labor and Employment (DOLE). Two of the most fundamental obligations an employer owes to their staff are the provision of a formal payslip and the accurate computation of wages.
Failure to comply with these requirements not only demoralizes the workforce but also exposes the employer to administrative complaints and legal liabilities.
1. The Mandatory Requirement of Payslips
While the Labor Code itself does not explicitly use the word "payslip" in its primary text, the requirement is firmly established through DOLE Department Order No. 198, Series of 2018 and established jurisprudence.
- The Proof of Payment: Every employer is required to pay their employees by means of a payroll. A payslip serves as the individual record of that payroll.
- Transparency: Employers must provide employees with a written statement showing the details of their compensation for every pay period.
- Format: A payslip can be issued in hard copy or electronic format (e.g., via email or an HR portal), provided the employee can access, read, and print it if necessary.
Key Takeaway: An employer cannot simply "hand over cash" or deposit a lump sum without providing a breakdown. The employee has a legal right to know exactly how their take-home pay was derived.
2. Components of Correct Wage Computation
Wage computation in the Philippines is more complex than simply dividing an annual salary by 12. It must account for several statutory variables:
A. The Basic Pay & Minimum Wage
Employers must ensure that the basic pay is not lower than the Minimum Wage set by the Regional Tripartite Wages and Productivity Board (RTWPB) for their specific region and industry.
B. Premium Pay & Overtime
- Overtime Pay: For work performed beyond eight (8) hours a day, an additional 25% of the hourly rate is required on ordinary days.
- Night Shift Differential: An additional 10% of the hourly rate for work performed between 10:00 PM and 6:00 AM.
- Rest Day/Holiday Pay: Work on a scheduled rest day or a Special Non-Working Day requires a 30% premium. Work on a Regular Holiday requires 200% of the daily rate.
C. Statutory Deductions
Employers are legally mandated to deduct and remit contributions to:
- SSS (Social Security System)
- PhilHealth (Philippine Health Insurance Corporation)
- Pag-IBIG (Home Development Mutual Fund)
- Withholding Tax (As prescribed by the TRAIN Law/BIR tables)
D. The 13th Month Pay
By law (P.D. No. 851), all rank-and-file employees are entitled to a 13th-month pay, provided they worked for at least one month during the calendar year. This must be paid no later than December 24th.
3. Common Errors and Legal Repercussions
Inaccurate computation often stems from "under-calculating" or "unauthorized deductions."
- Unauthorized Deductions: Under Article 113 of the Labor Code, deductions are only allowed for SSS/PhilHealth/Pag-IBIG premiums, union dues (with written consent), or when the employer is authorized by law or DOLE regulations. Deductions for "damages" or "shortages" without due process are generally illegal.
- Non-payment of Holiday Pay: Often, employers fail to distinguish between "Special" and "Regular" holidays, leading to underpayment.
4. Remedies for the Employee
If an employer refuses to provide a payslip or consistently miscalculates wages, an employee has several points of recourse:
- Internal Grievance: Attempting to resolve the error through the company’s HR or Accounting department.
- SENA (Single Entry Approach): Filing a Request for Assistance with DOLE for a 30-day mandatory conciliation-mediation process.
- Labor Arbiter: If SENA fails, the employee can file a formal position paper with the National Labor Relations Commission (NLRC) for money claims.
Summary Table: Mandatory Payslip Details
| Category | What must be included? |
|---|---|
| Gross Income | Basic Pay, Overtime, Night Diff, Holiday Pay, Allowances |
| Deductions | SSS, PhilHealth, Pag-IBIG, Tax, Absences, Tardiness |
| Net Pay | The final "Take-Home" amount after all deductions |
| Period | The specific dates covered by the payment |
Would you like me to draft a formal letter of request to an employer for the issuance of missing payslips?