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All You Need to Know About Your 13th Month Pay (And How to Compute It!)
There are two things that you can hear out of every Filipino’s mouth whenever the air starts getting colder in December. One is Christmas and how they’ll be spending it with their families, the other is their 13th month pay.
Everyone looks forward to this payout since it funds the Christmas gifts that we give to our loved ones. However, it’s understandable that not all are familiar with the 13th month pay law since it’s usually the employers that take care of the nitty-gritty computations.
However, it pays to know the specifics of the legislation to understand why you’re getting a specific amount of your monthly pay. Knowing how to make a proper 13th month pay computation can help you sort out your budgets even better in time for the Holiday season.
13th Month Pay Explained
To give a clear definition of what the 13th month pay is, it’s a mandatory compensation that is provided to rank-and-file employees by the end of the calendar year. It was passed into law on December 16, 1975 after President Ferdinand Marcos signed Presidential Decree No. 851.
The payment is required to be made on or before December 24 of every year. While most employers choose to pay their employees at the end of the year, others can give their pay twice a year (in June and in December).
The payment may not look any different from any Christmas bonuses employers give out at the end of the year. But while bonuses are given at the discretion of your employers, bonuses are mandated by the government to provide fair payment for the time of service a specific employee has rendered for the year.
General DOLE Guidelines on Your 13th Month Pay
Now that we have completely defined what the 13th month pay is all about, we now figure out the specifics of this law? Who are eligible to receive it? Who isn't covered by the mandate? Is the payment taxable?
- Who is qualified for a 13th month pay?
Rank-and-file employees are eligible to receive their 13th month pay as long as they manage to serve with their employers. Even if the employee was hired at the end of the year, they are entitled to at least 1/12th of their basic salary within the year. Even employees who resigned or were terminated are also eligible for this payment.
- Who aren’t eligible to receive their 13th month pay?
Employees of government agencies and any political subdivisions are not eligible under PD 851. Employees who work for multiple employers or government employees doing part-time work with a private company aren’t also covered by the law.
- What is the minimum amount of your 13th month pay?
13th month pay is required to be no less than one-twelfths of your base salary. Allowances and other compensation packages aren’t factored into the calculated number. The final amount you can get is affected by your months of service to the company as well as any absences you may have made.
How to Compute for Your 13th Month Pay
As long as you know your basic salary, it will be easy to figure out how much money you’ll be getting when your 13th month pay kicks in. The formula for getting your 13th month pay is simple and straightforward:
Total basic salary earned during the year / 12 months = Proportionate 13th month pay
Let’s say you earn ₱25,000 a month. If you rendered service for the entire year, then you’ll get the full ₱25,000 as your 13th month pay. If you weren’t with your company for the entire year, then your 13th month pay will be a percentage of how many months you were able to achieve with the company.
Below is a quick example of how much money you’d earn for your 13th month pay if you were able to render work without any unexcused absences for the year with a base monthly income of ₱25,000:
|Months of Rendered Service
|13th Month Pay
Other 13th Month Pay FAQs
- Can I still receive my 13th month pay even if I resign?
Yes, as long as you were able to render at least a month’s worth of service to your company. If you were only able to work with your previous employers for only a month before you left, you will be getting your pro-rated 13th-month pay alongside your final pay.
- Will my 13th month pay be subject to tax?
Your 13th month pay will only be subject to tax if it reaches a certain point. Thanks to the TRAIN Law, the previous ₱82,000 threshold is bumped up to ₱90,000
- When will I receive my 13th month pay? Is there a deadline?
Employers are required to give your 13th month pay by the December 24 deadline or in two installments of 50% throughout the year.
- I’m a manager. Can I still receive my 13th month pay?
Managers and supervisors looking to get their 13th month pay may have to hold their breath as the law doesn’t cover them. However, it’s up to the company’s discretion if their managers will also receive this pay.
- I did not receive my 13th month pay. What should I do next?
Call the DOLE 24/7 hotline at 1349 to file a complaint against your employer. You can also fill out the DOLE online query form.
If you have any other queries about your 13th month pay and your other rights as workers our DOLE FAQs page will answer all your questions.
Enjoy a Merrier Christmas with Your 13th Month Pay
Working hard can be tough, but the quick break we get at the end of the year can make everything worth it. The 13th month bonus that we also get at the end of the year is also a thank you from our employers and the government for the hours we spent advancing their business and the economy.
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