In the Philippine local government hierarchy, the Barangay serves as the primary planning and implementing unit of government policies. Because Barangay officials—composed of the Punong Barangay, Sangguniang Barangay members, the Barangay Secretary, and the Barangay Treasurer—occupy a unique space between volunteerism and professional civil service, their compensation and deduction schemes are governed by specific provisions in the Local Government Code of 1991 (Republic Act No. 7160) and circulars from the Department of Budget and Management (DBM).

1. Compensation Structure: Honoraria vs. Salary

Under Section 393 of RA 7160, Barangay officials do not technically receive "salaries" in the same manner as regular government employees. Instead, they receive honoraria, allowances, and other emoluments.

Minimum Thresholds: The law sets a minimum honorarium of ₱1,000.00 per month for the Punong Barangay and ₱600.00 per month for other Sangguniang Barangay members, the Secretary, and the Treasurer.
Adjustment: These rates are subject to the availability of barangay funds and the salary standardization laws, provided they do not exceed the budgetary limitations (55% for personal services in most LGUs).

2. Mandatory and Authorized Deductions

Deductions from the honoraria of Barangay officials and the wages of Barangay employees are strictly regulated. These generally fall into three categories:

A. Statutory Deductions

GSIS Contributions: Barangay officials are entitled to GSIS coverage. Under current regulations, regular Barangay officials and employees who receive fixed monthly compensation are subject to mandatory GSIS deductions (Life and Retirement Insurance Premiums).
PhilHealth: Membership in the National Health Insurance Program is mandatory. Deductions are based on the prevailing premium rates set by PhilHealth for the "Informal Economy" or "Formal Economy" depending on their specific employment status.
Pag-IBIG Fund: In accordance with RA 9679, all government employees, including those in the Barangay, are subject to mandatory Pag-IBIG fund coverage and subsequent monthly contribution deductions.
Withholding Tax: If the total annual compensation exceeds the tax-exempt threshold set by the TRAIN Law (Republic Act No. 10963), the Barangay is required to deduct and remit withholding taxes to the Bureau of Internal Revenue (BIR).

B. Deductions for Debt and Obligations

COA Disallowances: If the Commission on Audit (COA) issues a final notice of disallowance regarding previous payments, the amount may be legally deducted from the official's succeeding honoraria.
Loans: Deductions for loans from government financial institutions (like GSIS or Pag-IBIG) are authorized, provided there is a written authorization from the official/employee.

C. The "Net Take-Home Pay" Rule

The General Appropriations Act (GAA) usually mandates a minimum net take-home pay for government employees. While Barangay officials receive honoraria, the principle of ensuring they retain a sufficient amount for subsistence is generally observed in local accounting practices.

3. Benefits and Privileges

Beyond the monthly honorarium, Barangay officials are entitled to a specific suite of benefits under Section 393(b) of the Local Government Code:

Christmas Bonus: A year-end bonus, typically equivalent to at least one month’s honorarium.
Insurance Coverage: During their incumbency, they are covered by the Government Service Insurance System (GSIS) for death and disability benefits.
Medical and Hospitalization: They are entitled to free medical care, including confinement in government hospitals. If no government hospital is available, they may be reimbursed for expenses in private clinics (subject to fund availability).
Educational Benefits: The Punong Barangay and Sangguniang Barangay members (and their legitimate children) are entitled to tuition waivers in state colleges and universities (SUCs) within the province or city.
Civil Service Eligibility: Under the Barangay Official Eligibility (BOE), those who have completed their term of office (usually 5-9 years of aggregate service depending on current CSC rules) are granted a second-level eligibility equivalent to a Career Service Professional or Sub-professional eligibility, depending on the role.

4. Prohibited Deductions and Practices

The "No Work, No Pay" principle applies differently to elected officials compared to casual employees. Elected officials generally receive their full honoraria regardless of the number of sessions, provided they have not been suspended or removed from office.

Administrative Fines: A Sangguniang Barangay cannot arbitrarily deduct from an official’s honorarium as a form of "fine" for absences unless specifically provided for in the Internal Rules of Procedure and supported by an ordinance.
Unauthorized Collections: Deductions for "office funds," "parties," or "voluntary contributions" cannot be made without the explicit, written consent of the employee or official.

5. Benefits for Barangay Health Workers (BHWs) and Tanods

While not "Barangay Officials" in the elective sense, Tanods and BHWs are covered by the Barangay Health Workers’ Benefits and Incentives Act (RA 7883). Their benefits include:

Hazard allowances.
Subsistence allowances.
Preferential access to loans.
Training and career enrichment.

6. Leave Credits

Generally, elective Barangay officials do not earn leave credits (Vacation Leave/Sick Leave) in the same manner as career civil servants. Their compensation is based on their status as elective officers. However, they may be granted "leaves of absence" for travel or illness, during which they may still receive honoraria depending on the duration and local ordinances.