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    13 Month Pay

    Uploaded by

    Nielle Bautista
    The document summarizes Philippine labor laws regarding 13th month pay, which is a mandatory benefit equivalent to one month's basic salary that all private sector employees must receive by December 24 each year. It covers all employees who worked for at least one month and explains how to calculate the amount based on an employee's total basic annual salary. Employers may release it in installments as long as it is fully paid before the December 24 deadline. Failure to provide it can result in legal action from the Department of Labor and Employment.

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    © All Rights Reserved
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    13 Month Pay

    Uploaded by

    Nielle Bautista
    32 views12 pages
    The document summarizes Philippine labor laws regarding 13th month pay, which is a mandatory benefit equivalent to one month's basic salary that all private sector employees must receive by December 24 each year. It covers all employees who worked for at least one month and explains how to calculate the amount based on an employee's total basic annual salary. Employers may release it in installments as long as it is fully paid before the December 24 deadline. Failure to provide it can result in legal action from the Department of Labor and Employment.

    Original Title

    13-Month-Pay

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    The document summarizes Philippine labor laws regarding 13th month pay, which is a mandatory benefit equivalent to one month's basic salary that all private sector employees must receive by December 24 each year. It covers all employees who worked for at least one month and explains how to calculate the amount based on an employee's total basic annual salary. Employers may release it in installments as long as it is fully paid before the December 24 deadline. Failure to provide it can result in legal action from the Department of Labor and Employment.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    32 views12 pages

    13 Month Pay

    Uploaded by

    Nielle Bautista
    The document summarizes Philippine labor laws regarding 13th month pay, which is a mandatory benefit equivalent to one month's basic salary that all private sector employees must receive by December 24 each year. It covers all employees who worked for at least one month and explains how to calculate the amount based on an employee's total basic annual salary. Employers may release it in installments as long as it is fully paid before the December 24 deadline. Failure to provide it can result in legal action from the Department of Labor and Employment.

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    13th Month Pay

    RANK AND FIILE


    UNDER PRESIDENTIAL DECREE NO. 851
    Employers from the private sector in the Philippines are required to
    pay their rank-and-file employees a Thirteenth 13th Month Pay not
    later than December 24 every year. The 13th month pay is equivalent
    to one twelfth (1/12) of an employee’s basic annual salary.
    It is prescribed by Philippine labor laws as a mandatory benefit
    and should not be confused with the “Christmas bonus”
    commonly practiced in the local business setting.
    The 13th month pay, on the other hand, is required by law and
    employers who fail to provide them by the end of the year are
    subject to legal scrutiny by the Department of Labor and
    Employment (DOLE).
    COVERAGE
    All employers are required to pay their rank and file employees thirteenth-month pay,
    regardless of the nature of their employment and irrespective of the methods by which their
    wages are paid, provided they worked for at least one (1) month during a calendar year.

    Monetary compensations such as the following may not be regarded as part of the
    computation for this mandatory benefit:
    cost-of-living allowances;
    profit-sharing payments;
    cash equivalent of unused vacation and sick leave credits;
    overtime pay;
    premium pay;
    night shift differential;
    holiday pay; and
    other allowances and monetary benefits not considered part of an employee’s basic
    salary.
    However, if some or all of the items enumerated in the list above are treated as part of the
    basic salary, then they shall be included in the final computation.
    FORMULA AND COMPUTATION

    Total basic salary earned during the year


    = 13th Month Pay
    12 months

    Illustration: Using the basic wage in the National Capital


    Region at P570.00 (from January 1, 2023 to July 15, 2023) and
    P610.00 (from July 16, 2023 to December 31, 2023) per day
    and a six-day workweek or an equivalent Monthly Basic
    Salary of P14,820 and P15,860, respectively, to wit:
    FORMULA AND COMPUTATION
    JANUARY no absence P14,820
    FEBUARY no absence P14,820
    MARCH 1 day leave w/pay P14,820
    APRIL no absence P14,820
    MAY no absence P14,820
    JUNE 2 days leave w/o pay P13,600
    JULY 1-15 no absence P7,410
    JULY 17-31 no absence P7,930
    AUGUST 3 days leave w/o pay P15,860
    SEPTEMBER 1 day leave w/pay P15,860
    OCTOBER no absence P15,860
    NOBEMBER no absence P15,860
    DECEMBER 5 days leave w/out pay P12,810
    TOTAL BASIC SALARY EARNED FOR THE YEAR = ?
    FORMULA AND COMPUTATION
    JANUARY no absence P14,820
    FEBUARY no absence P14,820
    MARCH 1 day leave w/pay P14,820
    APRIL no absence P14,820
    MAY no absence P14,820
    JUNE 2 days leave w/o pay P13,600
    JULY 1-15 no absence P7,410
    JULY 17-31 no absence P7,930
    AUGUST 3 days leave w/o pay P15,860
    SEPTEMBER 1 day leave w/pay P15,860
    OCTOBER no absence P15,860
    NOBEMBER no absence P15,860
    DECEMBER 5 days leave w/out pay P12,810
    TOTAL BASIC SALARY EARNED FOR THE YEAR = P179,290
    FORMULA AND COMPUTATION

    TOTAL BASIC SALARY EARNED FOR


    THE YEAR = P179,290

    P179,290
    12 months
    = ?
    FORMULA AND COMPUTATION

    TOTAL BASIC SALARY EARNED FOR


    THE YEAR = P179,290

    P179,290 P14,940.83 is the


    =
    12 months 13th Month Pay
    FORMULA AND COMPUTATION

    Monthly basic salary x Length of employment


    = 13th Month Pay
    12 months

    Illustration: PRORATED (Perfect attendance, hindi


    nagtrabaho ng buong taon)
    Monthly basic salary = P20,000
    Length of employment = 6 M0nths
    FORMULA AND COMPUTATION

    Monthly basic salary x Length of employment


    = 13th Month Pay
    12 months

    P20,000 x 6 Months
    = 12 months

    = P10,000 is the
    13th Month Pay
    COVERAGE
    Moreover, an employer is given the prerogative to release the
    13th month pay in installments of two (2) to whichever
    number that is convenient to satisfy the condition that the
    mandatory benefit be given before December 24 every year.
    By practice, many companies maintain two installments, first
    in May and then in December, where the first fifty percent
    (50%) is given as an aid for employees to prepare for the
    opening of the regular school year in June.
    Thank you!

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