Picture this! It’s the end of the year. After months of hard work, there’s an extra pay heading your way—the most anticipated 13th Month Pay Philippines!
For employees or working individuals like you, this isn’t just any perk. It’s a government-mandated benefit that provides an extra financial cushion as the year wraps up. Whether you’re planning to use it for holiday shopping, bill payments, or savings goals, the 13th-month pay can be a valuable resource. It might even help you finally book that getaway you’ve been dreaming about. By understanding the ins and outs of the 13th month pay, you can make informed choices. This knowledge can make a big difference on how you make the most of this exciting pay.
So, what exactly is the 13th-month pay, who qualifies, and how is it calculated? Don’t worry, we’ll share with you sample payslips and we’ll answer the following:
- Can contractual, probationary, or project-based employees receive 13th Month Pay?
- What’s the difference between 13th Month Pay Philippines and a Christmas bonus?
- Are leaves with pay such as vacation, sickness, or maternity included in computation?
- What happens if my employer doesn’t give 13th Month Pay?
Overview of 13th Month Pay Philippines
As mentioned earlier, 13th month pay is a benefit mandated by the government of the Philippines. It was established under Presidential Decree No. 851 to address inflation and other financial issues.
Beyond its government-mandated feature, the 13th month pay has a special place in the hearts (and budgets) of workers in the Philippines. It allows employees like you to align finances with your current priorities and future goals, making it a valuable aspect of your financial well-being. Plus, this pay acts as a morale booster to feel valued and appreciated for the hard work all year.
Eligibility of 13th Month Pay
But, who qualifies for the 13th month pay in the Philippines?
- If you’re working in the private sector and hold a rank-and-file position, you’re eligible for a 13th-month pay. Even a new hire or a seasonal worker is entitled for this pay. The key is as long as you’ve clocked in at least one month within the calendar year. It’s the employer’s way of showing appreciation for the work you’ve put in throughout the year.
- While Presidential Decree 851 primarily focuses on private-sector employees, government employees aren’t left out when it comes to similar benefits. The 13th-month pay in the private sector has an equivalent form in the government known as the “year-end bonus”. It helps government employees manage holiday expenses and other financial needs.
- Lastly, managerial staff or those in positions that make decisions independent of the employer may not always qualify for the 13th month pay in the Philippines. It’s because their roles are often seen as more aligned with company ownership or executive-level decision-making rather than typical employee tasks. However, many companies recognize the value that all employees bring regardless of job title and choose to extend bonuses across the board. This inclusive approach shows appreciation for everyone and creates a more positive work environment. So, even if you’re in a leadership role, there’s a good chance your company might still reward your contributions with this pay!
13th Month Pay Easy Computation
Before we dive into the computations, understand that the key component included in calculating the 13th month pay is the basic salary – refers to the amount agreed upon by the employer and employee, excluding additional allowances, bonuses, or incentives.
In addition, the following are not included in your 13th month pay computation:
- Overtime Pay – payments made for work done beyond regular working hours.
- Allowances – are additional benefits like transportation, meal, or housing allowances.
- Bonuses – are non-regular payments such as performance bonuses, profit-sharing, or Christmas bonuses.
- Other Benefits – like rice subsidies or health plans are also not part of the 13th month pay calculation.
And take note that absences, tardiness, and leaves without pay are considered deductibles in 13th month pay computation.
Now, let’s proceed with the computation. Don’t stress yourself because it’s only easy to determine how much 13th month pay you’ll get.
Note: Sample payslips are provided for you to see the figures and understand how computation works. Don’t forget to scroll down.
Basic Computation
Basically, the 13th-month pay is calculated by taking the total basic salary earned during the year and dividing it by 12.
So, the formula is 13th Month Pay = Total Basic Salary Earned for the Year ÷ 12.
Let’s take Php 10,000 basic salary as an example and you render work completely through out the year which means no absences or any tardiness. So, your total basic salary earned for the year is Php 120,000 (basic salary x 12 months).
Therefore, your 13th month pay is Php 10,000. Using the given formula: Php 120,000 ÷ 12.
Pro-rated Computation
On the other hand, if you’ve worked less than a full year, you will receive a pro-rated 13th month pay based on the number of months worked.
Let’s say you only worked from July to December with basic salary of Php 10,000, that’s 6 months which totaling to Php 60,000. So, your 13th month pay to receive will be Php 5,000 (Php 60,000 ÷ 12).
Again, your 13th month pay computation is pro-rated whenever you have absences, tardiness, or leaves without pay. Because what you need to compute is the total earnings for the year equivalent to the total working hours or days you’ve rendered. Also, pro-rated 13th month pay computation is applicable for female employees who rendered maternity leave. More explanation regarding leaves in the FAQs section.
Sample Payslips of 13th Month Pay Philippines
Using the above-mentioned basic salary of Php 10,000, here are different sample payslips of your 13th month pay in the Philippines.
Disclaimer: Below figures and payslip details are for illustration purposes only.
Perfect Attendance + Leave with Pay Sample Payslip
Worked only from July to December 2024 Sample Payslip
Worked the Whole Year with Absent, Leave without Pay, Late or Tardiness Sample Payslip
On Maternity Leave for 4 Months Sample Payslip
Remember to always check your payslip in alignment with what you really receive and ask your HR or Payroll In-charge for any clarifications or questions regarding your 13th month pay to avoid further problems or misunderstanding with your 13th month pay computations.
13th Month Pay FAQs
When is the 13th Month Pay be given?
Employers are required to pay the 13th-month benefit atleast by December 24. But here’s the good news, some companies go the extra mile to make this a little easier on their employees. Instead of waiting until the holiday rush, they might choose to distribute the benefit earlier, or even split it into two installments. This flexibility can be especially helpful during tough financial times—for both the company and the employees. For instance, some organizations give half of the 13th-month pay around mid-year, then release the other half in December.
Can I receive my 13th Month Pay if I resign?
Yes! You receive your 13th Month Pay even if you resign. According to the Department of Labor and Employment (DOLE) guidelines in the Philippines, all rank-and-file employees are eligible for the 13th Month Pay as long as they have worked at least one month in the calendar year, regardless of their employment status at the time of payout.
However, your 13th Month Pay will be prorated if you resign before December. This means you’ll receive an amount based on the months you’ve actually worked that year. A sample pro-rated computations with payslips illustration are given earlier.
Is the 13th Month Pay taxable?
Up to Php 90,000 in bonuses and 13th-month pay are tax-exempt. Over this amount is due for income tax. This tax exemption cap helps prevent employees from losing too much of their hard-earned bonuses to taxes. It also encourages companies to offer reasonable bonus amounts, knowing that employees will actually take home the majority of it. So, if you’re planning your holiday budget or just curious about how your year-end pay adds up, remember this Php 90,000 threshold. It’s a sweet little bonus to your bonus!
What happens if my employer doesn’t give 13th Month Pay?
All private sector employers must give 13th-month pay to their employees in accordance to Presidential Decree No. 851. If employers don’t follow, they are violating the Philippine labor law. And DOLE actively encourages employees to report any violations to ensure fair treatment across workplaces.
Here are the steps you can take if 13th month pay has not been given to you:
- First, check with your employer’s human resources or payroll department. Sometimes, there could be delays due to internal issues.
- If the employer fails to comply, employees can file a complaint with the Department of Labor and Employment (DOLE). DOLE assists in handling disputes and enforcing labor laws.
- If necessary, employees can take legal action. Non-compliance with the 13th-month pay requirement may result in penalties for the employer.
Can contractual, probationary, or project-based employees receive 13th Month Pay?
Yes, contractual, probationary, or project-based employees are entitled to receive 13th Month Pay, provided they meet the requirements set by the Philippine Labor Code. The 13th Month Pay is a mandatory benefit for all employees who have worked for at least one month during the calendar year, whether regular or contractual. And the key point is that they should have worked for at least one month during the year. If they meet this requirement, they are eligible for the 13th Month Pay Philippines.
What’s the difference between 13th Month Pay Philippines and a Christmas bonus?
A common mix-up that many people make is confusing the 13th-month pay with a “Christmas bonus.” While both are extra payments employees might receive around the holiday season, there’s a big difference between the two. The 13th-month pay is actually a legal requirement or mandatory payout in the Philippines, meaning employers are obligated by law to provide it to their employees. It’s not a gift or a gesture from the employer—it’s something employees are entitled to receive by law. On the other hand, a Christmas bonus is completely optional and up to the employer’s discretion. Companies might choose to give it, but they’re not required to do so by law. It’s like a little cherry on top of the holiday season, meant to spread some extra cheer. So, if you’re lucky enough to work somewhere that gives both, that’s a nice bonus on top of a bonus!
Are leaves with pay such as vacation, sickness, or maternity included in computation?
When you are on paid leave or leave with pay, you still receive basic salary for that period as part of your 13th month pay computation. The key here is that the salary earned while on leave counts as part of the basic salary, which employers use to compute the 13th month pay. However, it does not contribute to the 13th month pay computation if its leave without pay. And this generally applies to probationary employees. In addition for special case, maternity leave is not considered as part of your salary earned for the year and therefore, can’t be included in calculating your 13th month pay in the Philippines.
Conclusion
And that’s it! You now have everything you need to easily compute your 13th Month Pay in the Philippines without the stress of complex formulas or confusing calculations. By following just a few simple steps and using the right details, you can quickly figure out how much you’re getting, so there’s no need to second-guess or feel uncertain. This bonus isn’t just an extra paycheck; it’s an opportunity to plan ahead and use it wisely.
Whether you decide to treat yourself to something special, give your savings a much-needed boost, or spread some holiday cheer to your loved ones, your 13th Month Pay is a great way to reward yourself for your hard work and dedication throughout the year. You’ve earned it, and it’s time to make the most of it!
But don’t forget—smart planning now can set you up for an even brighter financial future. Taking just a little time to organize and allocate your 13th Month Pay Philippines can ensure that it benefits you in the long run. Whether you use it to pay down debt, invest in your goals, or simply save for the future, every decision you make today can have a positive impact down the road. So go ahead and enjoy that extra cash—you deserve it, and with a little thought, you’ll set yourself up for continued financial success.
13th Month Pay Philippines (Easy Computation & Sample Playslips)