Aside from Jose Mari Chan’s inescapable soothing voice, there’s another artist we Filipinos usually associate with during the holiday season: the exhilarating vocal prowess of Aegis. Specifically, when they emphatically ask all employers in the Philippines to give everyone their Christmas bonus and 13th month pay. Indeed, you should expect a lot of cash flow going straight to your bank account, courtesy of your 13th month. Have you received yours yet? It’s time to learn more about this year-end benefit, especially how to compute 13th month pay, and all other related concerns. See them below. The 13th month pay is an additional compensation given to employees in the Philippines, typically at the end of each year. It's a government-mandated employee benefitunderPresidential Decree No. 851.[1] Allrank-and-file employees who have worked for at least one month in a company are entitled to a 13th month pay, regardless of the nature of their employment and how they receive their wages. Rank-and-file employees in the private sector—regardless of position, employment status, and salary payment method—are entitled to the 13th month pay, as long as they've worked for at least one month during the calendar year. This is based on the latest guidelines from the Department of Labor and Employment (DOLE).[2] This means you can expect to receive this monetary benefit even if you're still a probationary employee working for at least one month for your current employer.What is 13th Month Pay?
Who is Eligible for This Mandatory Benefit?
13th Month Pay Computation in the Philippines for 2022
An employee's 13th month pay should be not less than one-twelfth (1/12) of their total basic salary within a calendar year, according to the DOLE guidelines. If you want to know how to compute your 13th month pay, just get the sum of the salary you've earned for the entire year and then divide it by 12 months.
Basic 13th Month Computation Formula
Looking for a 13th month calculator online? You might not need one because there's a simple formula from the DOLE that you can use to compute how much you'll receive:
13 month pay = Total basic salary earned during the year ÷ 12 months
What is Prorated 13th Month Pay?
Take note that this yearly benefit isn't automatically equivalent to your one-month salary. If you've worked for less than 12 months this year, your 13th month pay will be prorated. This means its computation will be based only on the months you've actually worked for the company.
The prorated 13th month pay computation usually applies to employees hired by a company in the middle or toward the end of the year, as well as those whose work is suspended for several months due to business closure during the pandemic.
How to Compute Prorated 13th Month Pay in the Philippines
Refer to the sample computation below from the DOLE when calculating your own 13th month pay for this year.
| Month | Status | Basic Salary |
|---|---|---|
| January | No absence | ₱14,006.75 |
| February | No absence | ₱14,006.75 |
| March | No absence | ₱14,006.75 |
| April | Company shutdown | No salary |
| May | Company shutdown | No salary |
| June | 5 days leave with pay | ₱14,006.75 |
| July | Company shutdown | No salary |
| August | Company shutdown | No salary |
| September | 10 days leave without pay | ₱8,836.75 |
| October | No absence | ₱14,006.75 |
| November | 1 day leave without pay | ₱13,469.75 |
| December | No absence | ₱14,006.75 |
Based on the table above, the employee's total basic salary for the year is ₱106,147.
Using DOLE's computation formula, here's how to calculate the 13th month pay:
₱106,147 ÷ 12 months = ₱8,845.58 (This is the proportionate or prorated 13th month pay the employee should receive).
Note: The 13th month pay computation doesn’t include allowances or other monetary benefits such as the cash equivalent of your unused leaves, allowances, overtime pay, premium pay, and night shift differential.
Go back to the main article:Holidays in the Philippines and Long Weekends Guide for 2021
13th Month Pay FAQs
1. Is 13th month pay taxable?
13th month pay is taxable if it exceeds ₱90,000. Courtesy of the TRAIN Law, this amount is relatively higher than the previous tax-exempt rate, which was ₱82,000.
Read more: Holiday Pay Rules and Computation for Employers and Employees in the Philippines
2. When will I receive my 13th month pay?
Under the law, rank-and-file employees in the private sector must receive their 13th month pay on or before December 24 of each year.
Also, the DOLE doesn't allow employers to request or apply for exemption or deferment of the 13th month payment.[3]
4. What is 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 your management decides to give everyone a bonus, then great! But your employer can also choose not to give you one.
Related reading:
- Are you Financially Prepared for Christmas?
- Christmas Shopping Tips: 10 Ways to Beat Impulse Buying These Holidays
5. Are maternity leaves included in the 13th month pay computation?
No. Maternity leaves are excluded from the computation for 13th month pay. For example, if you missed two months from the calendar year as part of your maternity leave, you should include only the months when you were present.
6. Are managers entitled to a 13th month pay?
The 13th month law covers only rank-and-file employees, but it's the company’s call 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.
7. If I resigned/was terminated from my company, am I still entitled?
Yes, resigned and terminated employees should still receive their 13th month pay,as long as they worked for the 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.[4]
8. When is the 13th month pay given to resigned/terminated employees?
A resignedor terminated employee's 13th month is usually given as part of their back pay or final pay. This might take a month or two upon the employee's resignation date. Make sure to check with your HR department to verify the release date.
9. Are government employees entitled to the 13th month pay?
Government workers are not eligible, along with freelancers, contractual workers, household helpers, and employees who are paid solely on commission (real estate brokers, etc.) under Presidential Decree No. 851 Section 3.
The said law states that the 13th month pay law should apply to all types of employers, except for the following:
(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;
(c) Employers already paying their employees 13 month pay or more in a calendar year of its equivalent at the time of this issuance;
(d) Employers of household helpers and persons in the personal service of another in relation to such workers; and
(e) Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing a 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 be covered by this issuance insofar as such workers are concerned.
However, this doesn't mean government employees get nothing during the holiday season. In fact, they receive two types of bonus each year: a mid-year bonus paid around June to July and a year-end bonus (also called 14th month pay and Christmas bonus) paid around November to December.
Each of these bonuses is equivalent to a one-month basic salary. Government employees are also entitled to a ₱5,000 cash gift, which is paid together with their year-end bonus.
Under the Salary Standardization Law (Republic Act 11466), these bonuses are given to regular, contractual, casual, full-time, and part-time employees in the government sector, from the President down to the lowest-paid janitor or clerk.
10. My employer has not paid my 13th month. What should I do?
You may call the DOLE 24/7 hotline at 1349 to report your employer's violation of the 13th month pay law. Alternatively, you may fill out the DOLE online query form.[5]
Final Thoughts
The 13th month pay rules in the Philippines were set so that the working Filipino class can “properly celebrate Christmas and New Year.” Now that you know how to compute it through this 13th month pay computation guide, take this opportunity to plan your expenses and save more money. Try not to splurge and spend it all in one go. As much as possible, keep it so that you still have money to spend in the future.
Sources:
- [1]Presidential Decree No. 851
- [2] Labor Advisory No. 18-21 Guidelines on the Payment of Thirteenth Month Pay (DOLE official website, 2021)
- [3] DOLE releases guidelines on payment of 13th-month pay for 2021 (Philippine News Agency)
- [4] Resigned employee can still get 13th month pay (Acosta, The Manila Times, 2014)
- [5] DOLE query form
FAQs
How do you calculate 13 month pay 2022? ›
This is the case in the Philippines, where the computation formula is: total basic salary / 12 = 13th month pay. In other words, it's equivalent to one month's salary of that year. The total basic salary does not include any bonuses or other monetary benefits received that year.
What is the formula for computing 13th month pay? ›The 13th Month Pay is computed based on 1/12 of the total basic salary of an employee within a calendar year, or basic monthly salary for the whole year divided by 12 months. By law, an employee's 13th-month pay cannot be less than 1/12th of their overall basic salary within a 12-month calendar year.
How is 13th month pay and bonus calculated? ›Computation of 13th month pay based on employment status
Per the presidential decree, the 13th month pay is equivalent to one month's salary or 1/12 of a worker's annual salary. This applies to rank-and-file employees with more than one year of tenure in a company.
13th Month Pay = Total Annual Salary / 12
Here are the following items that are excluded from an employee's Total Annual Salary: Late deductions. Absences or unpaid leaves. Cost-of-living allowances (COLA)
The thirteenth month, placed between February and March, would be called Vern, due to its proximity to the vernal equinox and the beginning of spring. (Later versions of the bill dropped the name Vern and replaced it with the month of “Liberty.”)
Is year end bonus and 13th month pay the same? ›The key similarity that Christmas bonus and 13th month pay have is that they are both monetary benefits given out by employers to their employees. The key difference is that one is mandated by law, specifically Presidential Decree No. 851, and the other is by choice of the employers.
How is 13th month pay computed in the Philippines? ›An employee's 13th month pay should be not less than one-twelfth (1/12) of their total basic salary within a calendar year, according to the DOLE guidelines. If you want to know how to compute your 13th month pay, just get the sum of the salary you've earned for the entire year and then divide it by 12 months.
How do you calculate prorated 13th month pay in the Philippines? ›To put it simply, assuming you have no absences and tardiness, the amount you will get will be your monthly salary multiplied by the number of months you have worked for the company divided by 12.
Is night differential included in 13th month pay? ›13th Month Pay shall not be less than 1/12 of the total basic salary earned by an employee within a calendar year. *Basic Salary does not include overtime pay, premium pay, night shift differential, holiday pay and other allowances and monetary benefits not considered part of an employee's basic salary.
How much is the Christmas bonus 2022? ›As a one-off payment, recipients will receive £10 - the bonus will also not affect any other benefits. The DWP is yet to confirm the exact date when the payment will be made, but it generally lands in peoples' bank accounts in the first week of December.
How is salary calculated? ›
Determine the actual number of hours worked. Multiply the number of hours worked by the hourly wage. If there is overtime, multiply the number of overtime hours worked by the overtime pay rate. Add regular pay and overtime pay together to find the gross pay for that pay period.
How is salary calculated in the Philippines? ›- (Basic Monthly Salary x 12) / (Total Working Days in a Year) = DAILY RATE.
- Important: The total working days in a year (TWD) may vary from one employee to another. ...
- Basic Salary: ₱ 23,000.
- Total Working Days in a Year: 261. ...
- (23,000 x 12) / (261) = ₱ 1,057.47.
According to the rules implementing the 13th-month pay law, employers must grant 13th-month compensation to all their rank-and-file employees no later than 24th of December.
How is monthly salary calculated? ›Simply take the total amount of money (salary) you're paid for the year and divide it by 12. For example, if you're paid an annual salary of $75,000 per year, the formula shows that your gross income per month is $6,250.
What is a basic salary? ›A basic salary is the amount of money you earn before any add-ons or deductions. One may earn a certain amount and then get dividends from shares or overtime remuneration. Those at a junior level usually take a higher percentage of their basic salary compared to those at senior level.
How does the 13 salary work? ›What does 13th month salary mean? A 13th month salary—also known as 13 month pay—is an extra paycheck that is typically equal to one month's salary. It is paid in addition to your employee's annual salary. This tradition started in the Philippines in the 1970s and has since spread to other countries.
How do you calculate monthly payroll? ›Divide the employee's or department's total yearly pay by the number of pay periods. If your pay dates are weekly, divide the number by 52. If you pay biweekly, divide by 26. For semi-monthly or monthly payroll, use the number 24 or 12, respectively, in your division calculation.
How do you calculate monthly salary? ›Multiply your hourly wage by how many hours a week you work, then multiply this number by 52. Divide that number by 12 to get your gross monthly income.
How do you calculate your monthly salary? ›To convert to annual income:
Daily: Multiply by 200. Weekly: Multiply by 50. Monthly: Multiply by 12.