What is 13th Month Pay?
13th Month Pay is a mandatory benefit provided to employees pursuant to Presidential Decree No. 851 which requires employers to grant 13th-month pay to all its rank and file employees.
13th-month pay shall be paid by the employer on or before December 24. There are instances that a half portion of the 13th month is released in the middle of the year and the other half in the latter part. Most of the companies release 100% of the 13th Month Pay starting from November to December.
Who is entitled to receive 13th Month Pay?
All rank-and-file employees who have worked for at least one (1) month during the calendar year, are entitled to receive 13th Month Pay pay regardless of the nature of their employment and irrespective of the methods by which their wages are paid.
How is the 13th Month Pay computed?
According to DOLE, the minimum amount that the employee should receive as 13th Month Pay shall not be less than 1/12 of the total basic salary earned by an employee within a calendar year.
How the 13th Month Pay is computed or the amount basis depends on the existing company policy. The employer has different salary-based options in computing an employee’s 13th Month Pay. These options include attendance elements such as tardiness, absences, OT, and holiday premium. The employer can consider these attendance elements as long as they adhere to DOLE’s minimum requirements on 13th Month Pay.
In Salarium, there four (4) different salary-based amount basis options to choose from that cover a company’s particular 13th Month Pay scenario: