What Is 13th Month Pay?

The 13th month pay is a mandatory benefit under the 13th month pay labor code of the Philippines. It ensures that employees receive an additional month’s salary, providing financial relief during the holiday season.

As per DOLE 13th month pay guidelines, all rank-and-file employees who have worked for at least one month within a calendar year are entitled to this benefit, regardless of their employment status or how they are paid (monthly, weekly, or daily).

When is 13th Month Pay Given in the Philippines?

Employers must release the 13th month pay no later than December 24 each year. However, some companies choose to release it earlier or in two installments—one in mid-year and the other in December. Understanding when the 13th month pay is given in the Philippines helps employees plan their finances better.

How to Compute 13th Month Pay

Calculating the 13th month pay is straightforward. The formula is:

13th Month Pay = Total Basic Salary Earned in the Calendar Year ÷ 12

This computation excludes benefits like allowances, overtime pay, and other monetary incentives.

Prorated 13th Month Pay for Partial Employment

Employees who haven’t worked for the entire calendar year are still entitled to a prorated 13th month pay. The formula remains the same, but the total basic salary only includes earnings during the months worked.

How to Compute 13th Month Pay With Absences

Employees often ask how to compute 13th month pay with absences. Paid leaves are considered part of the basic salary, so they don’t affect the computation. However, unpaid absences reduce the total basic salary earned and subsequently lower the 13th month pay.

How Should It Appear on the Payslip?

A clear 13th month pay payslip format should include employee details, the total basic salary for the year, applicable deductions, and the final net 13th month pay. Transparency in the payslip builds trust and avoids potential disputes.

Why Payday Makes It Easy

Calculating and managing 13th month pay can be challenging for businesses. Payday offers automated tools that ensure accurate computations and compliance with DOLE 13th month pay guidelines, simplifying the process for employers and employees alike.

Contact Payday today to streamline your payroll process and ensure hassle-free 13th month pay management.

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