13th-month pay 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.
Can the employer withhold payment of 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 P90,000. Only the excess amount is taxable. In 2015, the allowable exclusion from gross income, in terms of 13th month pay and other benefits, was increased from P30,000 to P82,000 under Republic Act No. 10653 (see also BIR Revenue Regulation No. 3-2015). This amount was again increased to P90,000 under Republic Act No. 10963, also known as the Tax Reform Acceleration and Inclusion (TRAIN) Law.
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I worked in an international NGO. I resigned effective Oct 30, 2009 w/c was accepted by my boss. On Oct 30, they didn’t release my pay for oct 15-30. I am not anymore interested in it but I am for my pro-rata 13th month pay. When I inquired about it, my former boss replied in a traceable mail informing me that she is willing to release 50% of my 13th month but the other half will only be released upon submission of handover documents and a report which I volunteered to do before my resignation, but since I have submmitted my resignation, I was not able to do. Is it right for my boss to withhold half for my 13th month on the said ground?
Me and my co-employees had been receiving our 13th month pay for the past eight years (from one of us with longest tenure)in whole or equivalent to 1 month salary (i.e basic salary as per contract plus allowances). Now the management decided to change the computation based on actual earned salary plus allowances (considering the absences and lates of the employees). This would mean that some of us (i.e those which have already used up their allowed leaves and with excess leaves) will receive a lesser amount compared to the previous years. Is this acceptable? Does this not fall unnder the category of “reduction of benefits) for the employees?
Company made our 13 month pay included on the mid pay this December which is always a taxable payslip but the 13 month was included in the tax which is not suppose to be. Company stated that threshold was the reason for this since we had a performance bonus last year but was given by February this year which they did not deduct any tax. I think this should not be the case as 13 month is not subject to tax or inclusive of regular pay tax withholding. Kindly enlighten us on this
Company made our 13 month pay included on the mid pay this December which is always a taxable payslip but the 13 month was included in the tax which is not suppose to be. Company stated that threshold was the reason for this since we had a performance bonus last year but was given by February this year which they did not deduct any tax. I think this should not be the case as 13 month is not subject to tax or inclusive of regular pay tax withholding. This type of strategy shows desperate moves of the company.
I notice in my 2316 that 13th month and other bonuses are in the single field. ( 13th mnth pay and other bonuses are sum up )
I think 13th month pay is taxable.
May I ask advice on what to do if 13th month pay and other bonuses are counted as one? If it says that it should be separated from any other bonuses.
Thanks
Are the employers allowed to deduct tardiness, undertimes and absences from the 13th month pay? Thanks!
Our employees are diducting our absences and tardiness in our 13th month pay
Ive been with the company since August of this year. Are we entitled to get a 13th Month pay even if our company was just registered in the Philippines last September? (Back then, its listed as a Philippine Based US Company). I need your opinion on this matter since we’ve been hearing that they’re not gonna give us the said benefit.Please also note that we still haven’t signed any type of contract up to this point. Hoping to hear from you. Thanks
QUESTION
hi there, we were given an employee communiction by our company on how they will be computing our 13th month. In the said communication, it was indicated that “Employees who have been on PLA (Prolong Leave of Abences), VTO or Leave Without Pay (LWOP) in 2010 shall receive a pro-rated 13th Month Pay” is there such a law that will allow a private company to have the 13th month pro rated? i understand if for an instance you get hired mid year of that year technically your 13th monthly will automatically be pro rated but what if youve been part of the company within that year like youve completed the 12 months will it still be pro rata?
the formula that was provided above “(basic monthly pay/12) x (number of months actually worked).” is that the standard formula that government and private company should comply with? because we were given a different one, they computed it this way Base Pay for the month x number of days in Service during the year /365 Days. if your work schedule is 5days in a week and have 2 days off, is it justifiable to over it with 365 days?
I will really appreciate your feedback about my inquiry. Feel free to leave me a message. Thanks
Sir Good am!. Just inquiring and hoping to find answers here. Sir we have just received our 13th and 1.5 months bonus recently. However, we were surprised because there were deductions in our bonus known as LWOP or leave without pay..I made an inquiry to our HR and they confirmed such deductions…My questions are, it is legal in the Labor Laws? Other companies were doing the same practice? More so, the according to HR, our LWOP has an effects also in our retirement benefits. These LWOP will be deducted to our separation pay? Is this also correct? I glanced again our existing CBA, however, i never found any provisions with regards to my inquiries.
Thank you and hoping for your response…Good day!