[Blueboard] Honoraria, Consultancy or Professional Fees of ADMU employees

cao at admu.edu.ph cao at admu.edu.ph
Mon Apr 2 16:51:56 PHT 2007

pls. post. thank you.

March 5, 2007

TO	:  Unit and Department Heads

FROM	:  Central Accounting Office and Personnel Office

SUBJECT :  Honoraria, Consultancy or Professional Fees of ADMU employees 

Last March 2, 2007, we consulted with your unit/department’s representative 
regarding the payments for honoraria, consultancy or professional fees of ADMU 
employees processed by Central Accounting Office through voucher checks and by 
way of Order for a Check.  The following issues and concerns were discussed 
during the meeting:

o  If an employee moves into a higher income tax bracket as a result of the 
honorarium or professional fee that he/she receives, the withholding income 
tax computed and deducted may be understated. 

-  In order to adjust his/her total compensation income, these payments are 
encoded as correcting entries in the Payroll System on the succeeding pay 
period – resulting to duplication of work.

-  Any under withholding of tax in the voucher check payment is deducted from 
the salary in the succeeding pay period.  Thus, the tax withheld or deducted 
will increase without any increase in gross pay, which may result to a sudden 
drop in employee’s net pay.

o  If an employee has not yet reached the maximum premium coverage for SSS, 
Philhealth, and/or Pag-IBIG deduction, his/her deductions may also be 
understated for the period covered.  For an employee who is already within 10 
years before retirement age, any understatement in his/her SSS premium can 
affect the retirement benefit computed by SSS.  

o  Since payment of said honoraria is processed by CAO, the amount does not 
form part of the total compensation of an employee in the Personnel Office’s 
record.  Hence, when an employee requests for certification for specific 
purposes, the amount of compensation being certified by the Personnel Office 
may be understated.

o  Voluminous number of Order for a Check / Voucher Checks is being processed 
by all units concerned.  (Department, Personnel, Central Accounting, 
Signatories from Treasurer and President’s Office).

Considering the above issues/concerns, we agreed that all payments to ADMU 
employees for honoraria, consultancy or professional fees would be paid 
through Payroll by way of Payroll Authorization Notice [PAN] processed by the 
Personnel Office.  If this manner of payment will be implemented, the 
following benefits will accrue to our employees:

o  Convenience.  The honorarium, consultancy or professional fee of an 
employee will either be automatically credited to his/her bank account or 
become part of his/her paycheck so an employee does not need to go directly to 
CAO or authorize someone to claim his/her check

o  Complete and up-to-date information regarding employees’ compensation.  
There is an assurance that:

-  The certificate of compensation being issued by the Personnel Office is 
equal to the amount, which the employee actually receives from the University.

-  There is a more reliable basis for computing the SSS, Pag-IBIG and Phil 
Health contribution of an employee.

o  Proper matching of income and taxes.  Any increase in gross pay due to 
honoraria, consultancy or professional fees will result to corresponding 
adjustments in taxes withheld for the same period.

The following revised procedure will be implemented on April 1, 2007, the 
first day of the fiscal year 2007-2008.

1.  To initiate a payment to an ADMU employee for the honoraria, consultancy 
or professional fees, Unit/department will fill out and submit the Request for 
Payment for Employee’s Honorarium or Professional/Consultancy Fee to the CAO.  

(You may download this form at this link:  

2.  The CAO – Financial Reporting and Budget/Fund Monitoring Section will 
check the budget/fund availability and forward the request to the Personnel 
Office.  If the budget/fund is insufficient, CAO will return the request to 
the Unit/Department.

3.  The Personnel Office will review the Request for Payment for Employee’s 
Professional Fee/Honorarium/Consultancy and will prepare the PAN.  The PAN is 
distributed as follow:

4.  The CAO – Payroll Section will process the PAN.  The honoraria, 
consultancy or professional fee will be reflected as a separate item in the 
employee’s pay slip and will be part of gross pay of employee.

5.  The Payroll Cut-Off set by the Personnel Office will be applied through 
out the process.

We will appreciate your full support and cooperation on its implementation.  
Thank you very much.

Director, Personnel Office		Director, Central Accounting Office

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