Aside from Jose Mari Chan’s inescapable voice during the holiday season, there’s another voice that asking all employers in the Philippines to give everyone their Christmas bonus and 13th-month Pay.
Have you received your year-end benefit already?
It’s time to understand more about computing your 13th-month Pay.
Keep reading to learn more.
Table of Contents
What is the 13th-Month Pay?
The 13th-month Pay is a significant financial benefit mandated by law for Filipino employees.
It provides an additional source of income during the holiday season, helping workers meet their financial needs and enjoy the festive period.
To ensure compliance with the regulations set by the Department of Labor and Employment (DOLE), employers must understand the guidelines and procedures for calculating and distributing the 13th-month Pay.
In this article, we will provide a comprehensive guide to the payment guidelines for the 13th-month Pay in 2023, as outlined by DOLE.
Understanding the Legal Basis
The payment of the 13th-month salary is mandated by Presidential Decree No. 851, also known as the “13th-Month Pay Law.” This law requires all employers in the Philippines to provide their employees with a 13th-month pay equivalent to at least 1/12 of their total basic salary earned within a calendar year.
Computation of the 13th Month Pay
To calculate the 13th month Pay, employers need to consider the following factors:
- Basic Salary: The 13th month Pay is based on an employee’s total basic salary, excluding allowances and benefits that are not considered part of the regular Pay.
- Length of Service: The 13th month Pay should be provided to all employees, regardless of their employment status, who have worked for at least one month during the calendar year.
- Proportional Amount: To calculate the 13th month Pay, divide the total basic salary earned in a year by twelve.
Formula
Total basic salary earned during the year ÷ 12 months = 13th-month Pay
Example: Let’s say an employee has a monthly basic salary of PHP 20,000 and has worked for the entire year. The calculation would be:
20,000 × 12 ÷ 12 = 20,000
so the 20,000 is your 13-month pay.
Take note: As per Asec. Benjo Benavides from the Department of Labor and Employment (DOLE), as mentioned during the WantedsaRadyo Program on News 5, “May mga employer po tayo na yung 13th-month pay ay mas mataas pa po dun sa itinatagda po ng Presidential Decree 851” In his statement, he clarified that this is happening because, during Christmas, some larger companies provide a 14th-month pay/15th-month pay or additional bonuses along with the regular 13th-month pay for their employees.
Payment Schedule of 13-Month Pay
DOLE recommends that employers should pay the 13th-month salary not later than December 24th of each year.
This ensures that employees receive their additional Pay before the Christmas holidays, allowing them to celebrate and meet their financial obligations during this festive period.
Exemptions and Exclusions
While the majority of employees are entitled to receive the 13th-month Pay, there are certain exemptions and exclusions to be aware of:
- Government and Public Sector Employees: Government personnel and those in the public sector, including those receiving pensions and gratuities, are not covered by the 13th-Month Pay Law.
- Microenterprises and Small Business Owners: Employers who fall under the category of microenterprises or small businesses, as defined by law, may be exempted from providing the 13th-month Pay. However, they are encouraged to voluntarily give such benefits to their employees.
Compliance and Reporting
DOLE requires employers to submit a report on their compliance with the 13th-Month Pay Law.
The report should include the total amount of 13th-month Pay distributed to employees and other relevant information.
This report is submitted online via www.reports.dole.gov.ph annually through the prescribed form provided by DOLE.
Among the details to be submitted are: name and address of the establishment, principal product or business, total employment, the total number of workers benefited, the amount granted per employee, the total amount of benefits granted, and name, position, and telephone number of the person giving the information.
Resolution of Disputes
In case of disputes or complaints regarding the 13th-month Pay, employees are advised to seek assistance from the DOLE Regional Office or the nearest DOLE field office.
These offices have the authority to resolve disputes and ensure compliance with the law.
Conclusion
The 13th-month Pay is a crucial benefit that plays a significant role in providing financial relief and enjoyment for Filipino workers during the holiday season.
By understanding and adhering to the payment guidelines set by DOLE, employers can demonstrate their commitment to fair labor practices and employee welfare.
It is essential for employers to calculate the 13th-month Pay accurately, distribute it on time, and fulfill their reporting obligations to maintain compliance with the law.
By doing so, employers contribute to a positive working environment and foster a sense of financial security and goodwill among their employees.
Frequently Asked Questions (FAQ’s)
What is the 13th-month pay rule in the Philippines?
The 13th-month Pay is a significant financial benefit mandated by law for Filipino employees.
It provides an additional source of income during the holiday season, helping workers meet their financial needs and enjoy the festive period.
Is 13th month pay and Christmas bonus the same?
The 13th month pay is mandatory by law, while the Christmas bonus is up to your boss. Therefore, you can expect to receive your 13th month pay, but it’s entirely up to your bosses whether they give you a Christmas bonus or not.
Can I still get 13th month pay if I resign?
Employees who have resigned, been terminated, or separated from their jobs are still entitled to receive their 13th month pay. However, the amount of pay they receive will be proportionate to the length of time they worked for the company during that year.
Who are not entitled to 13th month pay?
Government personnel and those in the public sector, including those receiving pensions and gratuities, are not covered by the 13th-Month Pay Law.
What are the rules for DOLE’s 13th month Pay?
The issuance emphasizes that the 13th-month pay must be given to all rank-and-file employees in the private sector, regardless of their position, job title, or employment status, as long as they have worked for at least a month during the year.
This benefit also extends to employees who are paid based on a piece-rate system, a fixed salary, or a guaranteed wage plus commission, those with multiple employers, those who have resigned, those who have been terminated, or those who have been on maternity leave and received salary differential.
The advisory also states that the minimum 13th month pay should not be less than one-twelfth (1/12) of the total basic salary that the employee has earned within the calendar year.
References
- DOLE: What is 13-month pay, Understanding the Legal Basis, Calculation of 13th-month pay, Payment Schedule, Exemptions and Exclusions, compliance and reporting, and Resolution of Disputes ( Workers should get 13th month pay on time – DOLE ) Retrieved Date: November 11, 2023
- Alamin ang dapat malaman sa inyong 13th month pay ayon sa DOLE. (n.d.). Www.youtube.com. Retrieved November 11, 2023, from https://youtu.be/yz4tVcGr4bE?si=1grnslsDy1eSRCQo