How to Compute Your 13th Month Pay in Philippines?

It’s that time of the year again! Most of us are excited about Christmas celebrations, getaway vacations, and (of course) the 13th month pay! And why not? This means we are getting extra cash for Noche Buena, gifts to mga inaanak and a chance to make that planned vacation into reality.

What is 13^th Month Pay?

Yes, 13^th Month is the cash you get from your boss at the end of each year. But is it really a bonus you get out of your boss’ kind heart? The truth is, it is mandated under Presidential Decree No. 851 of the Philippine Labor Code.

The 13^th Month Pay is the one-twelfth (1/12) of the basic salary the employee received in a certain year. This includes those who are in probationary and prorated.

The question is, are you getting the right amount? Learn how to compute your 13th-month pay!

How to Compute 13th Month Pay

Here is how to calculate the 13^th month pay for those who are able to complete the year in their company from January to December.

Determine your basic salary for the whole year. This does not include allowances, overtime pay, and other monetary benefits. Let’s say your basic monthly salary is P20,000 from January to December.
Divide this year’s basic salary by 12.

P20,000 x 12 months = P240,000
P240,000 / 12 = P20,000 is your 13^th month salary
You will receive P20,000 as your 13^th month. This is provided that you have no salary deductions due to unpaid leaves, unauthorized absences, or tardiness.

How to Compute 13th Month Pay with Maternity Leave

Here is how you can calculate your 13th month pay even if you took a Maternity Leave.

Write down how much you receive each month to determine your basic salary for the whole year.
Divide this year’s basic salary by 12.

January – P20,000
February – P20,000
March – Maternity Leave
April – Maternity Leave
May – P20,000
June – P20,000
July – P20,000
August – P20,000
September – P20,000
October – P20,000
November – P20,000
December – P20,000
Total salary for the year: P200,000
P200,000 / 12 = P16,666.67 is your 13^th month salary

How to Compute 13th Month Pay for Resigned Employee

Have you already left your company? You are still entitled to receive a 13th month pay. Here’s how.

Determine your basic salary for the year. Let’s say you were hired on February 1, 2018, and effectively resigned on June 30, 2018. Your basic monthly salary is P20,000. You had perfect attendance all throughout your employment.
Divide your basic salary by 12.

February – P20,000
March – P20,000
April – P20,000
May – P20,000
June – P20,000
Total salary for the year: P100,000
P100,000 / 12 = P8,333.33 is your 13^th month salary

How to Compute 13th Month Pay for Contractual Employees

Contractual workers must assert their rights to 13th-month pay. After all, it is mandated by law that every employed worker hired for at least a month during the calendar year must receive it.

List your basic pay. Exclude any monetary benefits.
Divide this year’s basic salary by 12.

Let’s say you were hired in July with a salary of P512 a day. Your salary is based on your daily wage. Unfortunately, you had some absences and late time-ins. So there had been some salary deductions.

July: P10,240
August: P8,000
September: P10,240
October: P9,500
November: P8,000
December: P10,240
Total salary for the year: P56,220
P56,220 / 12 = P4,685 is your 13^th month salary

How to Compute 13th Month Pay with Salary Increase

Got a salary increase this year? Congratulations! How is 13th month computed? Below is a sample computation.

List your basic pay each month.
Divide your basic salary by 12.

January – P20,000
February – P20,000
March – P20,000
April – P20,000
May – P20,000
June – P20,000
July – P20,000
August – P25,000
September – P25,000
October – P25,000
November – P25,000
December – P25,000
Total salary for the year: P265,000
P265,000 / 12 = P22,083.33 is your 13^th month salary

How to Get Prorated 13th Month Pay?

You might have heard about it, but do you know what the pro-rated 13th-month meaning? An employee receives it when he/she joins or leaves the company throughout the year. If this is your case, you must calculate the 13th month by dividing your accrued salary by 12. Take note that it is not your total salary. Below is a sample of pro rata 13th-month pay.

Let’s say you earn P240,000 annually. But you will only work for four months until the 31st of December.

Multiply your basic monthly salary by the months you worked.
Divide the answer by 12.

September – P20,000
October – P20,000
November – P20,000
December – P20,000
Total salary for the year: P80,000
P80,000 / 12 = P6,666.67 is your prorated 13th month salary

13th Month Calculator

Though as simple as it may seem, computing the 13^th month’s pay could get confusing with unpaid leaves, the hiring date and length of employment. You can use a 13^th month pay calculator to give you an idea of how much you can get before the year ends. However, these calculators are not guaranteed to be specific. It only serves as a guide.

Facts About 13^th Month

We listed a brief summary of what to expect in your 13th month.

You must receive it on or before December 24 of each year as stated in the Labor Code. A lot of employers release their 13th-month pay in the first week of December to help their employees avoid the Christmas rush.
The 13th-month pay was mandated in 1975 for the sole purpose of helping Filipinos “properly” celebrate Christmas. It is undeniable that Christmas is a holiday Catholic Filipinos mostly look forward to.
The 13^th month’s pay is taxable only if it is higher than P82,000.
Not all employed Filipinos can have a 13^th month pay. Managers, government workers, housekeepers, persons in the personal service of another, and employees paid purely on commission, boundary, or task basis are exempted. Their employers have the sole discretion if they will give a 13th-month pay and Christmas bonus.

How to Use Your 13th Month Pay Wisely

Often, employees receive their 13th month pay before the year ends. That’s why it is usually spent during the holidays. Nevertheless, you don’t have to use it all up for that. Here are practical ways for you to utilize your 13th month salary.

#1 Invest It!

#2 Pay Your Bills

#3 Emergency Fund in Savings

#4 Buy Gifts for your Ina-anak or Loved Ones

Final Words

In a nutshell, the formula for 13^th month pay is finding how much basic salary you have received this year. Then, no matter how many months you have been employed in the company, you have to divide this year’s basic salary by 12.

Basic Salary This Year / 12 = 13^th month pay
And once you have received your most awaited 13th-month pay, do not get overly excited. It is the Christmas season, but it does not mean you have to spend your money in one go.

Be a smart spender! Don’t let your 13th month pay slip so easily.

RELATED ARTICLE: 10 Super Awesome Tips for a Well-Spent Christmas

Breathe deeply. Calm your excitement and list your needs versus your wants. Pay your bills, save up, start a business, and consider investing. Make this year’s Christmas holiday count for the next coming years! Take our online personal loan with low interest from Cash Mart Philippines.

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