What is 13th month pay?
It is a form of monetary assistance equivalent to the monthly basic compensation received by an employee, computed pro-rata according to the number of months within a year that an employee has rendered service to an employer (basic monthly pay/12 x number of months actually worked).
Who are entitled to 13th month pay?
All rank and file employees, regardless of status, who have worked for at least one (1) month are entitled to receive 13th month pay.
What if I already worked for one month and I resigned thereafter?
An employee who has resigned or whose services were terminated at any time before the time for payment of the 13th month pay is entitled to 13th month pay, in proportion to the length of time he worked during the year. The formula is: (basic monthly pay/12) x (number of months actually worked). The 13th month may be demanded at the time of effectivity of the resignation/termination. That doesn’t have to be December 24.
Who are rank-and file employees?
All employees not considered as managerial employees are considered rank-and-file employees. A managerial employee, as distinguished from a rank-and-file employee, is one who is vested with powers of prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall discharge, assign or discipline employees, or to effectively recommend such managerial actions.
Is there a cap, i.e., only those receiving a salary below P1,000 may receive 13th month pay?
Prior to 1986, only those who receive a monthly salary of not more than PhP1,000 are entitled to receive 13th month pay. This cap was removed under Memorandum Order No. 28 issued by former President Corazon Aquino.
When must it be paid?
The 13th month pay shall be paid not later than December 24 of each year. An employer, however, may give to his employees one half (½) of the required 13th month pay before the opening of the regular school year and the other half on before the 24th of December of every year. The frequency of payment of this monetary benefit may be the subject of agreement between the employer and the recognized/collective bargaining agent of the employees.
Could the employer withhold the 13th month pay?
No, the payment of 13th month pay is mandatory, specifically provided under Presidential Decree (P.D.) No. 851. In case of non-payment of 13th month pay, covered employees could complain at the Department of Labor and Employment (DOLE) or the National Labor Relations Commission (NLRC).
Are there employers who are exempted from paying 13th month pay?
Yes. The following employers are not required to pay 13th month pay under P.D. 851, unless the grant thereof have become a policy or practice:
a. The Government and any of its political subdivisions, including government-owned and controlled corporations, excepts those corporations operating essentially as private subsidiaries of the Government.
b. Employers already paying their employees a 13th month pay or more in a calendar year or its equivalent at the time of this issuance.
c. Employers of household helpers and persons in the personal service of another in relation to such workers.
d. Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis in which case the employer shall grant the required 13th month pay to such workers.
Who are those paid on a piece-rate basis?
They are workers paid a standard amount for every piece or unit of work produced that is more or less regularly replicated, without regard to the time spent in producing the same.
What if I work in more than one company?
Workers who work in two or more companies or private employers, whether on full or part time basis, are entitled to the required 13th month pay from all their private employers regardless of their total earnings from each or all their employers.
Is it part of the Company bonus?
No. The payment of 13th month pay is mandated by law. It is separate from any other bonus given by the company. Read the previous discussion.
Is 13th month pay taxable?
No, as long as the amount does not exceed P30,000. Only the amount in excess of P30,000 is taxable.
how to compute 13th month pay if the company started march 1, 2014
Question:
I am a part time teacher of a public school for 4 years now but we are covered with a contract on a semestral basis and paid per hour. Ever since I did not received 13th month pay. I don’t have a full time job only part time.
My question is if I am covered with this 13th month pay? If yes, what should I do?
Salamat.
Atty. Fred,
This is a useful information. However, may I just clarify that the formula in computing the 13th month pay is:
[total earnings divided by 12]
Total earnings being all the basic pay an employee has earned during the course of his/her work for the whole year (or whenever the cut off for the 13th month pay is). This does not include OT pay, premium pay, allowances and other remunerations not considered as part of the basic pay.
This information is from a DOLE employee. If you have further questions, you may contact our DOLE regional offices. you may find the contact information at http://www.dole.gov.ph
My salary is below 10,000. Last year, it was taxed by my employer. What shall I do if it will be taxed by them?
hi my question is that , my start date in the company is nov 24 of the current year am i entitle to have a pro rated 13 month pay .
Do contractual employees are entitled to get 13th month pay? For example, an employee started working on the 7th of October 2014. Does she/he will get a 13th month pay? Thanks !
is it lawful to deduct any from a 13th month pay?
I’m working as a cashier in a resort on a probationary status. But I already started working there last summer but only on 3 months contract. The HR of the company after two months my summer contract ended called me a, told me that the company like my work and wanted me to report back. I did and signed a contract that for 5 months my status will be probationary. This month, they will be giving our 13th month pay. I’m just in a dilemma, my other co-workers told me ( who are in the same status as I am) that the computation of our 13th month should include the months that we were hired during the summer. But others told me in will only include the months when I reported back to work.
Pleas help me.. This is my first job and I really need to be guided.
Thank you
Leng
Hi.
Is the Christmas bonus pro-rated?
I understand that the 13th month pay is mandated by law, however, Christmas bonus as discussed here, is based on the discretion of the employer. I’d like to be clarified if Christmas bonus will also be based on the number of days I actually worked since the 13th month pay follows the same ruling.
Thank you.