13th Month Pay Basics in 2019
‘Tis the season to be jolly, they say – the holiday season brings the best of things, including the most anticipated 13th month pay. In the Philippines, companies tend to give their employees with what’s called a 13th month pay. It’s a form of gratitude and support of the companies toward their employees for their hard work during the year. But there are many details involved in this gesture – some of which will be discussed for clarity in this blog.
Without further ado, here’s all the basic stuff you should know about the 13th month pay.
What is the 13th month pay?
It’s a form of payment given out to all rank-and-file employees, regardless of their employment status and the way they are paid, who have worked for at least one month during the year.
What is a rank-and-file employee?
A rank-and-file employee is an employee who does not have managerial duties such as hiring or suspending other employees.
How much is the 13th month pay?
It must be at least one-twelfth (1/12) of the total basic salary earned by a rank-and-file employee for the year. It does not include allowances and other cash benefits, which are not part of an employee’s basic salary.
When is the 13th month pay given out?
Eligible employees who have rendered at least one month of work during the year should receive their 13th month pay on or before 24 December of the same year.
Which employers are not eligible to give out 13th month pay?
The government, companies that run a similar payment scheme, persons in the personal service of another, and companies paying their employees on a purely commission, boundary, or task basis are exempted from giving out 13th month pay.
I’m working for multiple employers. Am I still eligible to receive 13th month pay?
As long as your employer isn’t exempt, you will receive your 13th month pay from each of your employers, as long as you have worked for at least one month for every eligible employer during the year.
I resigned from my employer before the year ends. Am I still eligible to receive 13th month pay?
You’ll receive your 13th month pay based on the length of time you’ve worked during the year. For example, if you resigned last September and you’ve been with the company since January, you should receive one-twelfth (1/12) of your total basic earnings from January to September of the current year only.
I got separated from my employer before the year ends. Am I still eligible to receive 13th month pay?
You’ll receive your 13th month pay based on the length of time you’ve worked during the year. For example, if you were separated from your company last September and you’ve been with the company since January, you should receive one-twelfth (1/12) of your total basic earnings from January to September of the current year only.
Is my 13th month pay taxable?
As long as the value of your 13th month pay does not exceed ninety thousand Philippine pesos (Php 90,000), it is not taxable.