In addition to their official pay, laborers may be entitled to bonuses and other incentives depending on government policies. The 13th month pay Philippines is one of the salaries that workers in this country are required to receive.
This article will disseminate information related to this reward and answer common questions. Do not miss your benefits and the way to compute them!
Table of Contents
What Is The 13th Month Pay Philippines?
President Ferdinand Marcos of the Philippines authorized the 13th-month wage in December 1975 with Presidential Decree No. 851, intending to improve the living conditions of laborers earning less than 1,000 pesos monthly. As a result, firms must pay their staff more, except for positions tied to the government.
The salary cap below 1,000 pesos was not lifted until 1986 by Corazon Aquino, the next president, allowing all workers to obtain this kind of pay.
Following the Department of Labor and Employment (DOLE), any employee who works at the current company for at least one month has the right to receive a 13th-month salary.
The receipt time can be the end of December of that year or divided into two installments in May and November, depending on the company regime.
How To Calculate The 13th Month Salary Philippines
The average employee’s monthly pay for that calendar year determines their 13th month wage. Put another way, divide a person’s monthly wage by 12. It should be noted that the base pay is accepted, while the extra benefits and allowances are not included. For instance:
- Holiday and rest pay
- Living allowance
- Maternity allowance
- Night work allowance
- Overtime allowance
- Redeem unused vacation days, etc.
If you work less than 12 months, your 13th-month salary will be computed at a different rate based on your work time. This calculation will change flexibly depending on the employee’s official employment date, whether at the middle or the end of the year.
For example, in the past year, you only worked for 6 months, with a monthly salary of 12,000 pesos. Your 13th-month salary will be (12,000*6)/12, equal to 6,000 pesos. If you have any of the above bonuses, you must deduct them all before starting the calculation.
What Is The 13th Month Salary For Government Employees?
According to Presidential Decree No. 851, government staff—aside from those employed by privately held state-owned businesses—will not be paid for their 13-month service. Rather, they will get a Christmas bonus at the end of December and a mid-year bonus around June.
The Christmas bonus is calculated based on the employee’s working period starting from January 1 to October 31 of each year, according to the following table:
| Length of working time | Amount of bonuses (₱) |
| Less than 1 month | 100 |
| 1 – 2 months | 200 |
| 2 – 3 months | 300 |
| 3 – 4 months | 400 |
| More than 4 months | One month’s basic salary and an additional ₱5,000 |
FAQs
Is It Legal For An Employer To Refuse To Pay The 13th Month Wage?
Paying the 13th month salary is a mandatory requirement by law, and business owners must strictly comply with it. Any action to refuse or delay payment, including applying for exemption from payment, is not authorized by DOLE. According to the Labor Law, the above acts can be attributed to unfair labor practices.
If workers do not receive this money on time, they can contact the DOLE’s hotline at 1349 or apply online to this agency.
Do You Have To Pay Taxes For Your 13th-Month Payment In The Philippines?
Typically, bonuses and benefits are not included in an employee’s taxes unless they exceed a certain threshold. This number was raised to ₱90,000 instead of the previous ₱82,000 in 2018 in the TRAIN law.
Specifically, if all bonuses, including the 13th-month wage, are greater than ₱90,000, they will be counted toward the laborers’ total income in the current tax year.
Do Those In Managerial Positions And Higher Be Paid For A 13th-Month Wage?
According to regulations, management-level positions and above will not receive this bonus. Instead, they can receive a Christmas and a 14th-month reward – for employees whose outstanding performance exceeds their responsibilities.
However, some companies still offer 13th-month salaries to management-level employees, and they may confirm with HR about that.
Is The 13th Month Salary Paid To Laborers Who Quit Or Have Their Contracts Terminated By The Company?
The answer is yes. The ex-workers are still entitled to this bonus as their final salary, provided they have worked for at least one month in the same year. The amount of money received will be equal to the total salary they have received divided by 12.
It can take one to two months to receive it after the employee officially quits. Nevertheless, you should request documents or email confirmation about the remaining wage from HR before leaving the company.
Final Thoughts
The 13th month pay Philippines is a mandatory bonus that employers must pay to their employees yearly, usually paid at the end of the year. The amount you receive equals the sum of your basic monthly salaries minus any benefits and bonuses you receive during the year divided by 12. While government employees and management-level employees usually receive the middle and Christmas bonuses instead of it.
The law completely protects the rights of employees if they do not receive any legitimate bonus. Negotiating and confirming with the human resources department about your benefits will also help you minimize unnecessary risks regarding salary and bonuses!
