13th-Month Pay in the Philippines: How to Compute the 13th-Month Pay? | guideph.com

 

The 13th-month pay is an added payment provided to employees at the end of the year. Nevertheless, the worth of the 13th-month pay depends on various variables as well as it normally resembles the value of a worker's monthly income.

But the question that boggles on the mind of every staff member is just how a specific firm computed their 13th-month pay. In this post, I will certainly try to answer the question of how to calculate the 13th-month pay here in the Philippines.

13TH-MONTH PAY: DEFINITION

Thirteenth-month pay indicates an advantage offered to a staff member amounting to one-twelfth (1/12) of the staff member's standard salary within a calendar year.

It is suggested by the Philippine labor laws as a compulsory advantage and need to not be puzzled with the "Christmas bonus" generally worked out in the regional business setup. The Christmas bonus is not an obligation, and can only be released upon a company's voluntary judgment. It is generally provided by employers to show appreciation and also thankfulness for the service rendered by their workers within a year. The 13th-month pay, on the other hand, is a requirement according to the law. Nevertheless, companies who fail to provide them by the end of the year go through legal query by the Division of Labor and also Work (DOLE).

WHAT COMPRISES A "BASIC SALARY"?

Standard income consists of all incomes of an employee paid by the employer for solutions rendered to the company (for objectives of computing the 13th-month pay). Nonetheless, the complying with should not be included in the computation of the fundamental salary:

• Cost-of-living allowances;
• Profit-sharing repayments;
• Cash equivalent of unaccustomed holiday as well as sick leave credit scores;
• Overtime pay;
• Premium pay;
• Night shift differential;
• holiday pay;
• All allowances and financial benefits which are not considered or incorporated as part of the routine or standard income of an employee.

WHO ARE ELIGIBLE TO RECIEVE THE 13TH-MONTH PAY?

1. Employees.

Employees in the private sector (all rank-and-file), regardless of their position, designation, or work status, and any approach through which their earnings are paid. (For the rank-and-file staff member to be covered, she or he must have helped at least one month during the calendar year.).

Managerial employees are NOT included in the 13th-month pay although some business still select to give the advantage.

( Managerial employees are employees whose agreement of work calls for or permits him or her to work with, transfer, promote, put on hold, let go, disregard, incentive, self-control or rate the grievances of other staff members, or to make direct recommendations on these matters to the employer.).

2. Employers.

All companies are needed to pay their rank-and-file employees 13th-month pay no matter the number of staff members they utilize.

( An employer is a person or organization that employs one or more people, especially for salaries or income. This could be a company, organization, federal government entity, firm, business, expert services company, non-profit organization, small company, as well as store.).

WHEN IS THE 13TH-MONTH PAY GIVEN?

Under Presidential Mandate No. 851, companies from the private sector in the Philippines are duty-bound to pay their rank-and-file employees a 13th Month Pay not behind December 24 each year. The 13th-month pay is equivalent to one-twelfth (1/12) of a staff member's fundamental yearly income.

A company, nevertheless, may provide the worker's half ( 1/2) of the 13th-month pay prior to the opening of the regular year as well as the continuing to be fifty percent on or prior to December 24 of every year.

HOW IS THE 13TH-MONTH PAY COMPUTED?

The quantity of the 13th-month pay shall not be less than 1/12 of the total basic salary gotten by the worker within a fiscal year.

Again, certain sorts of revenues are not included as a "fundamental pay" for objectives of calculating the 13th-month pay (stated above on the interpretation of "fundamental salary").

As an example, if you obtain vacation pay, unwell benefits, vacation benefits, premium for works performed on rest days and vacations, spend for routine vacations, evening differential, maternity leave advantages, overtime pay, or all allocations as well as monetary benefits which are NOT considered or integrated as part of the normal or basic wage, these profits will be omitted in the computation of your basic wage.

FORMULA  AND COMPUTATION

The formula is simply straightforward. You will certainly need to calculate all your salary or incomes (leaving out profits ruled out part of your basic income) within a calendar year and separate it by 12. The total amount is the equivalent 13th-month pay that needs to be paid to you by your company.

1. How to summarize or calculate your 13th-month pay if you have absences without pay/maternity leave/unpaid leaves/paid leaves/late record.

Take note that your 13th-month pay is not a taken care of amount representing 1/12 of your regular monthly standard pay. It is determined based upon the real number of days that you worked consisting of fallen leaves with pay.

2. Measuring or computing the 13th-month pay if there's a raise or salary differential.

The salary increase will be considered when calculating the 13th-month pay, supplied that the additional amount is just applied in the very first month the pay boost took effect and afterwards.

So as an example in November you got a raise of Php 1,000, your basic salary for November and December will certainly be Php 17,000, specifically. This quantity will then be included in your total basic salary made during the year.

3. Computing 13th-month spend for resigned workers or separated/terminated employees.

Resigned or separated workers are still qualified to receive the 13th-month pay.

Sec. 6 of the Changed Standards on the Implementation of the 13th-Month Pay Legislation offers that even if you have actually surrendered from your task or was terminated, you are still entitled or eligible to receive the 13th month-pay symmetrical to the amount of time you worked throughout the year, about from the moment you began functioning during the calendar year up to the moment you resigned or terminated from the solution.

As an example, you worked only from January to September. Your basic revenue during the stated period will certainly be added and also after that divided right into 12. The amount after separating is your proportionate 13th-month pay.

4. Computing the 13th-month pay for Lack Without Leave or AWOL staff members or staff members with indefinite leave.

AWOL staff members as well those under indefinite leave are entitled or qualified to the 13th-month pay supplied these staff members have actually helped at least one month during a fiscal year.

For example, if you helped 3 months and went into uncertain leave after, you will certainly be qualified to a prorated 13th-month pay.

As some might say, the 13th-month pay is an expected pay waited by lots of employees since they can have an additional repayment which is prompt as well as relevant throughout the end of the year for Xmas event or on the mid-year for the registration of their children.

I hope I have actually answered the question that boggles your mind on how to compute your 13th-month pay.