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How to Compute Your 13th Month Pay in Philippines?

Filled under: Career Lifestyle 
How to Compute 13th Month Pay

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 13th Month Pay?

Yes, 13th Month Pay 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 13th 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 13th month pay for those who are able to complete the year in their company from January to December.

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

P20,000 x 12 months = P240,000

P240,000 / 12 = P20,000 is your 13th month pay

You will receive P20,000 as your 13th month pay. 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

  1. Write down how much you receive each month to determine your basic salary for the whole year.
  2. 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 13th month pay

How to Compute 13th Month Pay for Resigned Employee

  1. Determine your basic salary for the year. Let’s say you are hired on February 1, 2017 and effectively resigned on June 30, 2017. Your basic monthly salary is P20,000. You had perfect attendance all throughout your employment.
  2. 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 13th month pay

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.

  1. List your basic pay. Exclude any monetary benefits.
  2. 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 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 13th month pay

How to Compute 13th Month Pay with Salary Increase

Got a salary increase this year? Congratulations! This is how to compute your 13th month pay.

  1. List your basic pay each month.
  2. 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 13th month pay

13th Month Pay Calculator

Though as simple as it may seem, computing the 13th month pay could get confusing with unpaid leaves, the hiring date and length of employment. You can use a 13th 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 13th Month Pay

  • 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 13th month pay is taxable only if it is higher than P82,000.
  • Not all employed Filipinos can have a 13th 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.

Final Words

In a nutshell, the formula for 13th 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 to 12.

Basic Salary This Year / 12 = 13th 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: 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!

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