Everything An Employee Must Know About 13th Month Pay

Since it is the season of 13th month pay, we thought it would be helpful to answer frequently asked questions about 13th month pay.

I resigned. Do I get 13th month pay?

You are still owed 13th month pay even if you resigned in the middle of the year.

I’ve noticed that some people hold off resigning until the end of the year because they fear that they’ll forfeit their 13th month pay.

That isn’t true. You are still owed a proportionate 13th month pay meaning you will be paid according to the number of months you actually worked for the company. If you worked for 2/3 of the year, you should get 2/3 of your salary as 13th month pay.

I got fired. Do I get 13th month pay?

Yes, you are still owed 13th month pay in proportion to the months you worked.

I’m on probation. Do I get 13th month pay?

Yes, the law does not distinguish between probationary and regular employees when it comes to 13th month pay.

What is the legal basis for 13th month pay?

The legal basis is Presidential Decree No. 851 which requires employers to pay employees a 13th month pay.

Who are legally required to receive 13th month pay?

Under the law, only rank-and-file employees are entitled to 13th month pay provided they worked at least 1 month in the company. Fortunately, it is common business practice that employers also offer 13th month pay to managerial employees.

When should you receive your 13th month pay?

It should be paid no later than December 24 of the same year.

What happens if my company does not pay 13th month pay?

You can report them to DOLE through hotline 1349.

What is the computation for 13th month pay?

It is computed as your basic salary earned over the entire calendar year divided by 12.

A sample computation is provided below for a hypothetical worker earning P20,000 per month. There were 2 months where she was on leave without pay.

She shall have earned a total basic of Php 200,000 over the course of 10 months where she actually worked which shall be divided by 12 months.

Php 20,000 per month multiplied by 10 months of actual work divided by 12 months= Php 16,666.66

She is then entitled to a 13th month pay of Php 16,666.

What is the tax treatment of 13th month pay?

Under the TRAIN Law, it is tax exempt up to Php 90,000.

Why do other companies give 14th, 15th, and 16th month pay?

Only 13th month pay is required by law. 14th, 15th, and 16th month pay are an additional benefit that employers may offer in order to entice employees to stay.

Is 13th Month Pay same as a Christmas bonus?

No, even if they are commonly both given at the end of year, it is only 13th month pay which is required by law. Christmas bonus is a voluntary benefit given by employers to employees. However, if this is customarily given, it may not be taken away as it may be considered diminution of benefits under the law.

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