Things You Need to Know About the 13th Month Pay in the Philippines

The best thing about December aside from the parties and gifts is that you will finally receive your 13th-month pay. Make a plan before spending but first see the frequently asked questions about your 13th-month pay.

What is the 13th month pay?

It is an additional and mandatory compensation given to employees in the Philippines, in accordance with employment law, usually at the end of a year for all rank-and-file employees who worked for at least a month, regardless of the nature of their job or how they receive their salary.

Is 13th-month pay taxable?

The amount received for the 13th-month pay is taxable in the instance that it reaches 90,000 pesos. It is per the TRAIN law wherein the tax exclusion rate is comparatively higher from last year that is 82,000 pesos. Visit wylliespears.com for your employment law questions.

When will I receive my 13th-month pay?

Your 13th-month pay should be given to you usually in December but not later than the 24th.

Why should I receive a 13th-month pay?

It is required under Presidential Decree No. 851 that all employers have to pay all their employees a 13th-month pay not later than December, 24 of every year.

What’s the difference between a 13th-month pay and a bonus?

13th-month pay is government-mandated so all employers cannot avoid paying or else they are held answerable by law. As for the bonus, it is basically from the employer’s big-heartedness to give. When a company pays a bonus, it shows that it cares for the welfare of its employees. In return, they are inspired to do better in their jobs. It also encourages loyalty from their employers.

Are managers entitled to a 13th-month pay?

The coverage of the 13th-month pay is the rank-and-file employees only. As far as those in the managerial position, it’s the company’s decision if they include them or not. So, if you are a manager, ask the Human Resource department about it, if not then ask for a bonus!

If I resigned or was terminated from my company, am I still entitled?

Yes, all those who voluntarily resigned or those terminated by the company are entitled to a 13th-month salary provided they worked for the employer or company for at least one month. The computation for their 13th-month pay is still the same.

When is the 13th-month pay given to resigned or terminated employees?

The 13th-month pay for resigned and terminated employees are usually given as part of their back or final pay. It is advisable to ask the Human Resource department when your pay is to be released. It usually takes about a month or two for it to be released based on the date of the employee’s resignation or termination.

Are government employees entitled to this pay?

Under PD No. 851, government employees are not included since this law is intended for the private sector to protect them from the ravage of worldwide inflation. The government has a separate benefit scheme for its employees.

How to compute your 13th-month pay?

The formula is Monthly Basic Salary x Employment Length ÷ 12 months.
Employees who worked for less than 12 months will earn a prorated 13th-month pay. For instance, if your basic monthly salary is PHP 25,000 and you began working starting October, your calculation for the 13th month should look like this:

(PHP 25,000 x 2 months) ÷ 12 months = PHP 4,166.67

Note that allowances or other monetary incentives such as the cash equivalent of your unused leaves, overtime compensation, premium pay, and night shift difference are not included in your basic monthly salary.

Are maternity leaves included in the computation?

No, maternity leaves are removed from the estimate for the 13th month. For example, if you missed two months as part of your maternity leave from your calendar year, you can only use the months in which you were present. Your computation could look like this, using the same example from earlier.

(PHP 25,000 x 10 months) ÷ 12 months = PHP 20,833.33

In the Philippines, the 13th-month pay rules were set so that the working Filipino class would celebrate Christmas and New Year properly. Even so, instead of splurging all your bonuses during the holidays, you can always take this opportunity to save more cash. Make sure you keep money from this additional pay so that you can still enjoy your future.

What shall I do if my 13th-month pay was not enough?

If you think your 13th-month pay would not be enough for your urgent expenses, then you can emergency borrow money from Robocash. It is a fast, easy, and reliable microloan option for Filipino citizens. All you have to do is go to the official website, fill-up the form, upload a valid government ID. As long as you are 21-70 years old, you will only need to wait for a few minutes to get your loan. Robocash approves more than 90% of the applications, which means that you are likely to get the right funds and make yourself happy at the final of the year. The good news is that for new clients the first loan Robocash gives out without interest. You can borrow from 1000 to 10000 pesos for 7 to 15 days. For the next loans, the amount will increase to 25000 pesos, and the term up to 30 days and interest will be charged. Despite how easy this is, all money loans must be returned on time, and this method can be used only in extreme cases.