As the year comes to end, working people look forward to receive the 13th month pay. If you’re an employee, how would you know if you’re receiving the right amount of 13th month pay?
Who shall receive the 13th month pay?
Pursuant to Presidential Decree 851, all rank and file employees, either working in private or government offices, irrespective on how they receive the salary, and have rendered at least one month are entitled to receive a 13th month pay.
The said benefit should be given to employees prior to December 24 of every year. Separated, resigned, or terminated employees shall also receive 13th month pay.
What is the computation of the 13th month pay?
The total amount of the 13th month pay shall not be less than 1/12 of the basic wage of an employee within the calendar year. If the employee has no tardiness and absences, the computation would be;
(Basic monthly salary) x (months worked) / 12 months = 13th month pay
However, basic salary does not include allowances, monetary benefits (overtime, night differential, premium, unused sick leave credits and vacation as well as holiday pay.
The 13th month pay is non-taxable provided that it does not go above Php82,000. Otherwise, if the total amount of such benefit exceeds the ceiling, it would be taxed. Employees who have worked less than 12 months are also entitled to receive 13th month pay.
Once you receive your 13th month pay you should be smart in spending the money. Keep in mind that it is your hard-earned money that’s why you should think twice before spending it.