In the Philippines, there exists a bonus called a “13th Month Pay”. This pay is when employers give their employees an extra month’s pay at the end of the year. By this time, you’ve probably already received last year’s pay. If not, you might want to check with your employer about your pay.
What is 13th Month Pay?
13th Month Pay is actually mandatory to pay in the Philippines. According to Presidential Decree No. 851, all rank-and-file employees who have worked for at least one month in a company are entitled to the 13th month pay, no matter what position.
How Do You Calculate Your 13th Month Pay?
To calculate your 13th month pay, take how much you’ve made this year from the company as a basic salary, and divide that by 12.
For instance, if you make around PHP 30,000 for 5 months, then you will receive PHP 12,500 as the 13th month pay.
Is it Taxable?
Yes, under certain conditions. If you made more than PHP 90,000 as a bonus, then you will be taxed.
When Will 13th Month Pay be Issued?
13th month pay will be issued by December 24th of every year.
What’s the Difference From a Bonus?
A bonus depends on the company, but a 13th month pay is government-mandated payment. Therefore, for bonuses, companies do NOT need to pay it, but they MUST pay the 13th month pay.
Do Terminated or Resigned Employees Receive the Pay?
Yes – They do receive and are eligible for the 13th month pay. Usually they are given with their last paycheck.
Do Government Employees Receive this Pay?
Unfortunately they are not eligible for this pay, along with freelancers, contractual workers, household helpers, and employees who are paid solely on commission and have no basic salary.
With this pay, the government wants the people to celebrate their Christmas and New Years properly. However, of course, some of these bonuses should be kept into savings.