How to compute 13th month pay?

By Milky P. Sanchez, CPA

Christmas season is just being around the corner and it is this time of the year for 13th month pay and Christmas bonus. You might be imagining about Christmas shopping, feasting on your favorite restaurant with your friends and love ones, or going to a travel. And you might be probably wondering how much it is that you will receive to spend or save on your planned holidays? Here is a sample computation of 13th month pay based on labor advisory 12-2013 of DOLE to guide you.

(Total basic salary earned in a year)/12mos = proportionate 13th month pay

Using a monthly basic salary of 11,372.33:

 
January No absence P11,372.33
February No absence P11,372.33
March 1 day leave w/ pay P11,372.33
April No absence P11,372.33
May 2 days leave w/pay P11,372.33
June 2 days leave w/pay P11,372.33
July No absence P11,372.33
August 2 days leave w/pay P11,372.33
September On maternity leave No salary
October  On maternity leave  No salary
November  No absence  P11,372.33
 December  5 days leave w/o pay  P9,192.33
Total basic salary earned for the year  P111,543.33

 

P111,543.33/12mos = P9,295.28 is the proportionate 13th month pay

To further your understanding, here are the facts about 13 th month pay:

  • 13 th month pay is mandatory. It is based on Presidential Decree No. 851. And should be given on or before December 24 of every year. However, employer has the option to give half of it on or before the opening of the regular school year and the remaining on or before December 24 of every year.
  •  The employees entitled to 13th month pay are rank and file employees who have worked at least one month in a year, regardless of position, designation, or employment status, irrespective of the method of payment of wages. This includes employees paid on a piece rate basis, those with multiple employers (13th month pay should be received from all his employers), private school teachers, and resigned or separated employees (for their proportionate 13th month pay meaning if an employee worked from January up to September with 10,000 monthly basic salary, he should be paid a proportionate 13th month pay of (10,000×9)/12 = Php7,500).
  • The employers that are exempted from giving 13th month pay are the government and any of its political subdivisions including GOCCs, employers already paying their employees a 13th month pay or more in a calendar year or its equivalent, employers of household helpers and persons in the personal service of another, employers of those who are paid on a 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 for workers on a piece rate basis.
  • 13th month pay including other benefits such as Christmas bonus and other incentives is tax exempt up to Php82,000.

Advance Happy Holidays!

Source: Labor Advisory 12-2013, PD 851 and its revised guidelines, RR 3-2015

Disclaimer: This article is published for general information only and does not substitute expert’s opinion.
Any recent issuances or rulings may cause this article inaccurate or obsolete at a whole or partially.