The law dictates that you should receive a monetary benefit before every year ends. All rank-and-file employees who have worked for at least one month in a company are eligible to receive their 13th month pay. Presidential Decree No. 851 (1) Section 1 states that:
“All employers are hereby required to pay all their employees receiving a basic salary of not more than P1,000 a month, regardless of the nature of their employment, a 13th month pay not later than December 24 of every year.”
What’s the difference between a 13th month pay and a bonus?
Unlike your 13th month pay, a Christmas bonus isn’t government-mandated. This means that a bonus should come from your company’s generosity. If they decide to give everyone a bonus, then great! But they can also choose not to give you one (2).
When should I receive it?
As set by the Department of Labor and Employment (DOLE), you should receive your 13th month pay not later than December 24 of every year.
Yes, it is taxable, but only if it exceeds PHP 90,000. This amount is relatively higher as compared to last year’s tax exclusion rate which is PHP 82,000, courtesy of the TRAIN Law.
How do I compute my 13th month pay?
It’s actually simpler than you think. You can compute your 13th month pay by multiplying your basic monthly salary to the number of months you have worked for the entire year, then dividing the result to 12 months. Here is the usual 13th month pay computation in the Philippines.
Monthly Basic Salary x Employment Length ÷ 12 months
For example, if your basic monthly salary is PHP 20,000 and you started working for your company last September, your 13th month pay computation should look like this.
(PHP 20,000 x 3 months) ÷ 12 months = P5,000
Remember that your monthly basic salary doesn’t include allowances or other monetary benefits such as the cash equivalent of your unused leaves, overtime pay, premium pay, and night shift differential.
Are managers eligible for a 13th month pay?
The 13th month pay law only covers rank-and-file employees, but it’s the company’s initiative if they want to give this yearly benefit to employees with a managerial position. If you’re a manager, make sure to confirm this with your office’s HR department.
If I resigned from my company, am I still eligible?
Yes, you will still receive your 13th month pay (3) as long as you worked for your employer or company for at least a month. The computation is still the same and the 13th month pay for resigned employees should be given as part of the back pay.
Unfortunately, they are not eligible, along with freelancers, contractual workers, household helpers, and employees who are paid solely on commission (real estate brokers, etc). As stated by Presidential Decree No. 851 Section 3, the 13th month pay law should apply to all types of employers except:
(b) The Government and any of its political subdivisions, including government-owned and controlled corporations, except those corporations operating essentially as private subsidiaries of the Government;
