Understanding Salary: Components, Payment, and Deductions

Posted on Mar 7, 2025 in Business Administration and Management (BAM)

Salary: The total economic benefit a worker receives, in cash or in kind, for providing labor services to third parties.

Means of Payment:

  • Cash payment (cash or check)
  • Compensation in kind: Specified goods provided to the employee (cannot exceed 30% of salary)

Method of Payment:

  • Wage
  • Salary
  • Unit time per unit of output
  • Mixed salary

Minimum Wage: The minimum amount a worker can receive for a forty-hour work week. This can be enhanced by collective agreements. If working less than 40 hours, the wage is proportional to the time worked.

Unattachable: To meet debts incurred by workers, only the amount exceeding the minimum wage can be seized.

Payment of Salary

Salary for work is paid monthly, bi-weekly, or weekly, depending on the company’s policy. Payments can be made in cash (at the workplace), by check, or via wire transfer. The employer is obligated to provide workers with wage statements specifying individual earnings.

Upon request, a worker is entitled to sign the wage receipt in the presence of a committee member representing the business or themselves. The signature confirms receipt of the sums. Companies must store and maintain these receipts for a minimum of four years.

Structure of the Salary Receipt

The salary receipt has three parts:

  • Heading: Identification data of the company and worker
  • Body: Accruals and deductions
  • Social Security and Income Tax: The basis of contributions to Social Security and the base subject to personal income tax

Heading Details:

  • Professional Category or Group: Workers are classified into different occupational groups based on their job functions.
  • Group: All employees are included in 11 groups for Social Security contributions.

Body – Accruals:

Amounts earned by the worker.

Salary Perceptions:

Basic salary, wage supplements, overtime…

  1. Base Salary Group: The fixed part of the remuneration determined by time or work unit.
  2. Supplementary Payments: Concepts not valued in determining the base salary. These can be classified into personal, job-related, and work quality factors.
  • Built-in: A bonus established based on the time spent working in the company.
  • Special Skills: Compensation for using specific skills.

Job Complements:

Provided for special features that differentiate a worker from the average.

  • Difficulty, Toxicity, Danger, Work Shift: Collected if provided by the collective agreement or employment authority.
  • Night Work: Night work has a specific fee determined in collective bargaining.
  • In Residence: A supplement provided to workers who travel.

Bonuses by Quality or Quantity of Work:

Given for doing more work or achieving a higher quality level than normal.

  • Incentives, Activity: Set when the worker is required to outperform expectations.

Overtime: Overtime can be paid at a fixed amount or compensated with equivalent paid rest.

Non-Wage Perceptions:

These are not considered wages and are excluded from Social Security listings. They do not compute in the BCC/BCP:

  • Transportation
  • Locomotion
  • Work Clothes
  • Tools
  • Distance
  • Diets
  • Currency
  • Contract Costs

Indemnities SS:

  • Temporary disability due to a professional illness.
  • Partial unemployment: Perceived by workers when their working hours and base salary are reduced proportionally.

Allowances:

Amounts received by the worker due to transfers, layoffs, or termination of employment contract.

Deductions

Worker’s contributions to Social Security and joint collection concepts.

  1. Sum BCC computing concepts (less: transport, locomotion, work clothes, tool wear, distance, currency breaks, allowances, expenses of the contract)
  2. Prorateo to pay extra: (No extra pay per year x amount of extra p.) / 12
  3. Sum 1 + 2
  4. Look BCP tables
  5. H.extra Bcc + I + other
  6. BCP (bcc) CC 4.7% (bcp) Unemployment 1.55% (bcp) form. HE Prof. force majeure 0.1% 2% Other 4.7% I