Reading your payslip
A payslip breaks down exactly how your salary for the pay period turned into the amount that landed in your bank account. At the top sits your gross pay, the full amount you earned before anything is taken out, based on your monthly or daily rate multiplied by the days or hours you worked. Everything below that line explains why your take-home pay ends up smaller.
The deductions section usually groups into two kinds. Mandatory government deductions cover your SSS, PhilHealth, and Pag-IBIG contributions, plus withholding tax, all taken out automatically because Philippine law requires it. Other deductions might include a company loan payment, a cash advance, a tardiness deduction, or union dues, and these vary by employer and by employee.
What's left after every deduction is your net pay, or take-home pay, the actual amount deposited to your account or handed to you in cash. Budgeting off your net pay rather than your gross salary is the single most useful habit a payslip teaches, since gross pay is a number you never actually get to spend in full.
A payslip shows gross pay of ₱25,000 for the month. Deductions list ₱1,125 for SSS, ₱625 for PhilHealth, ₱200 for Pag-IBIG, and ₱333 in withholding tax, adding up to ₱2,283 in total deductions. Net pay printed at the bottom is ₱22,717, the amount actually credited to the employee's payroll account.
Mini quiz: On a payslip, what does 'net pay' refer to?
A payslip shows how gross pay becomes net pay after mandatory government deductions, tax, and any other withholdings, so budgeting off your net pay keeps you realistic about what you actually have to spend.