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

The 13th-month pay is an extra repayment provided to employees at the end of the year. Nevertheless, the value of the 13th-month pay relies on different variables and also it generally mimics the value of a staff member's month-to-month wage.

However the question that boggles on the mind of every employee is how a specific business computed their 13th-month pay. In this post, I will certainly try to respond to the concern of just how to calculate the 13th-month pay right here in the Philippines.

13TH-MONTH PAY: DEFINITION

Thirteenth-month pay means a benefit provided to a worker amounting to one-twelfth (1/12) of the worker's standard wage within a calendar year.

It is recommended by the Philippine labor regulations as an obligatory benefit as well as must not be perplexed with the "Christmas bonus" frequently worked out in the local business setup. The Xmas bonus offer is not an obligation, as well as can only be released upon an employer's volunteer judgment. It is typically offered by companies to show appreciation and also thankfulness for the service made by their workers within a year. The 13th-month pay, on the other hand, is a need according to the legislation. However, employers who stop working to give them by the end of the year are subject to lawful questions by the Division of Labor as well as Employment (DOLE).

WHAT COMPRISES OF A "BASIC SALARY"?

Basic salary includes all earnings of a worker paid by the company for services rendered to the company (for objectives of calculating the 13th-month pay). However, the adhering to should not be consisted of in the calculation of the standard salary:

• Cost-of-living allowances;
• Profit-sharing payments;
• Cash equivalent of unaccustomed vacation and sick leave credits;
• Overtime pay;
• Premium pay;
• Night shift differential;
• Holiday pay;
• All allowances and also financial benefits which are not considered or integrated as part of the regular or fundamental income of a staff member.

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

1. Employees.

Employees in the private sector (all rank-and-file), despite their setting, classification, or employment status, and also any type of technique whereby their incomes are paid. (For the rank-and-file employee to be covered, she or he should have worked for at least one month throughout the fiscal year.)

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

(Managerial employees are workers whose contract of work needs or allows him or her to employ, transfer, advertise, put on hold, dismissed, disregard, reward, self-control or consider the grievances of other staff members, or to make straight referrals on these matters to the company.)

2. Employers.

All employers are required to pay their rank-and-file employees 13th-month pay despite the number of staff members they utilize.

(An employer is a person or service that employs several individuals, specifically for earnings or wage. This could be an organization, organization, government entity, agency, business, professional services firm, charitable organization, small company, and 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 staff members a 13th Month Pay not behind December 24 yearly. The 13th-month pay amounts one-twelfth (1/12) of a worker's fundamental annual wage.

An employer, nonetheless, might offer the worker's one-half ( 1/2) of the 13th-month pay before the opening of the regular year and also the continuing to be fifty percent on or prior to December 24 of each year.

HOW IS THE 13TH-MONTH PAY COMPUTED?

The amount of the 13th-month pay shall not be less than 1/12 of the complete standard salary gotten by the employee within a fiscal year.

Once more, certain types of profits are not included as a "basic pay" for purposes of calculating the 13th-month pay (mentioned above on the interpretation of "basic salary")

As an example, if you receive vacation pay, ill advantages, vacation advantages, costs for works done on rest days and holidays, pay for normal holidays, night differential, maternity leave benefits, overtime pay, or all allowances and also financial benefits which are RULED OUT or incorporated as part of the normal or fundamental income, these profits will be omitted in the calculation of your basic wage.

FORMULA AND COMPUTATION

The formula is just simple. You will certainly need to calculate all your income or profits (omitting incomes not considered part of your basic salary) within a calendar year and also separate it by 12. The total is the comparable 13th-month pay that should be paid to you by your company.

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

Remember that your 13th-month pay is not a repaired amount representing 1/12 of your monthly basic pay. It is computed based on the actual variety of days that you functioned consisting of leaves with pay.

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

The salary increase will certainly be taken into consideration when computing the 13th-month pay, supplied that the additional amount is just used in the initial month the pay increase worked and after that.

So for example in November you got a salary increase of Php 1,000, your basic wage for November and December will certainly be Php 17,000, specifically. This quantity will certainly after that be included in your overall fundamental income gained during the year.

3. Computer 13th-month pay for resigned workers or separated/terminated workers.

Resigned or divided employees are still eligible to obtain the 13th-month pay.

Sec. 6 of the Modified Standards on the Application of the 13th-Month Pay Legislation offers that even if you have actually surrendered from your task or was ended, you are still qualified or qualified to get the 13th month-pay symmetrical to the amount of time you worked throughout the year, around from the time you began working throughout the fiscal year approximately the time you surrendered or terminated from the service.

For instance, you worked just from January to September. Your basic income throughout the stated period will be added and also after that split into 12. The amount after dividing is your proportionate 13th-month pay.

4. Computing the 13th-month spend for Lack Without Leave or AWOL employees or workers with uncertain leave.

AWOL workers too those under indefinite leave are qualified or qualified to the 13th-month pay provided these staff members have actually worked for at least one month during a calendar year.

For instance, if you helped three months and also went into indefinite leave after, you will certainly be entitled to a prorated 13th-month pay.

As some may state, the 13th-month pay is an anticipated pay waited by lots of workers because they can have an extra settlement which is timely as well as pertinent during the end of the year for Christmas celebration or on the mid-year for the enrollment of their children.

I wish I have responded to the inquiry that boggles your mind on how to compute your 13th-month pay.