During the Christmas and New Year holidays, people get together with their loved ones to celebrate. People are also expected to spend money on food and gifts, especially during the Noche Buena celebration on Christmas Eve. However, the Christmas season often strains the limited budgets of many Filipino families by adding an additional expense. During the holiday season, some even turn to borrowing money or lending jewelry.
By providing families with additional funds to spend on Christmas and New Year's Eve, the 13th month pay law seeks to address this issue. You can use your Christmas bonus and your 13th month's pay instead of spending a portion of your salary on gifts and other holiday expenses. Your regular pay should go toward things like food, rent, utility bills, transportation, insurance, tuition, and other essential household expenses. ,'_com-medrectangle-3','ezslot_11',191,'0','0'_('div-gpt-ad-_com-medrectangle-3-0');
We've created this guide to help you because we know that not everyone is familiar with the correct way to calculate the 13th month's pay. We have also provided a free 13th month pay calculator and spreadsheet, so don't worry if you can't do math. Simply enter the required data, and the calculation will be carried out for you automatically.
In accordance with Presidential Decree No. 1, rank-and-file employees in the Philippines are required to receive the 13th month pay as a mandatory benefit or compensation at the conclusion of the year. 851 was signed on December 16, 1975, by President Ferdinand Marcos.
Based on P.D. No. According to Republic Act No. 185, all Filipino employers are required to provide their employees with a 13th month's pay no later than December 24 of each year, regardless of the nature of their employment. One-twelfth (1/12) of an employee's annual base salary is the equivalent of the 13th month's pay. ,'_com-medrectangle-4','ezslot_9',192,'0','0'_('div-gpt-ad-_com-medrectangle-4-0');
The Christmas bonus, on the other hand, is a completely different kind of compensation that a company can give to its employees for helping to achieve certain goals and contributing to the success of the business. The 13th month pay is not the same as the Christmas bonus. The government and the law do not require employers to offer Christmas bonuses.
Employees have the option of splitting their 13th month's pay in half, with half due in the first half of the year (January to June) and the other half due in the second half.
The 13th month's pay is subject to income tax under the new TRAIN Law if it exceeds 90,000. Taxes will only be assessed on amounts in excess of 90,000. For instance, only ten thousand yen of your 13th month's pay is taxable.
Who Qualifies for a 13th Month Paycheck?
A 13th month's pay is required for only rank-and-file employees or workers who are not in managerial positions. However, managers can choose to receive a 13th month's pay from their employers. A managerial employee is someone who is in charge of hiring, firing, transferring, disciplining, and suspending employees.300,250],'_com-box-4','ezslot_7',193,'0','0'_('div-gpt-ad-_com-box-4-0');
If they worked for the company or employer for at least one month, employees who quit or were fired from their jobs are also eligible for a 13th month's pay. As part of their final pay, or back pay, resigned workers typically receive their 13th month's pay within one to two months of their resignation date.
Who Doesn't Qualify for a 13th Month Paycheck?
A 13th month's pay is not available to everyone. P.D. No. 3 Section 3 According to Section 185, all Filipino employers are eligible for the 13th month's pay, with the exception of the following:
Employers who are already paying their employees 13-month pay or more in a calendar year of its equivalent at the time of this issuance; Employers of household helpers and persons in the personal service of another in relation to such workers; Government-owned and controlled corporations, with the exception of corporations that operate essentially as private subsidiaries of the Government; Employers of workers who are paid solely on a commission, boundary, or task basis, as well as those who are paid a fixed amount for performing a specific work, regardless of the amount of time spent doing so, are covered by this issuance, with the exception of employers of workers who are paid on a piece-rate basis, in which case the employer is covered insofar as the workers are concerned.
This means that employees of government-owned and controlled corporations (GOCC) and institutions, departments, and agencies are not eligible for a 13th month's pay. The same is true for employees who are compensated on a commission basis (such as insurance agents and real estate brokers), contract workers, housekeepers, and freelancers.
P.D. No. Additionally, Section 185 permits distressed employers, which are currently experiencing significant losses, to withhold 13th-month pay from their employees without the prior approval of the Secretary of the Department of Labor and Employment (DOLE). However, distressed employers were not included in the list of exemptions when new guidelines were issued by former DOLE Secretary Franklin Drilon in 1986.300,250],'_com-banner-1','ezslot_8',194,'0','0'_('div-gpt-ad-_com-banner-1-0');
How is your 13th month's pay calculated?
You can ensure that you receive the legal compensation you are entitled to by knowing how to calculate your 13th month's pay.
Your monthly basic salary divided by your length of employment divided by 12 is the fundamental 13th month pay formula:
The term ""monthly basic salary"" refers to all remunerations or earnings paid to an employee by an employer or company for services rendered. The term ""monthly basic salary"" is multiplied by the length of employment, which is 12 months. The cash equivalent of unused vacation and sick leave credits, overtime pay, holiday pay, premium pay, and night shift differential are examples of monetary benefits that are not included in the basic or regular salary. The basic salary may also not include cost-of-living allowances, profit-sharing payments, and allowances and monetary benefits. ,'_com-large-leaderboard-2','ezslot_4',195,'0','0'_('div-gpt-ad-_com-large-leaderboard-2-0');
However, if the aforementioned salary-related benefits are regarded as a component of the employees' basic salary by individual or collective agreement, company practice, or policy, they may be included in the calculation of the 13th month's pay.
Before calculating the 13th month's pay, the salary equivalent for missed days or hours will be deducted from the basic salary if there are any absences, unpaid leaves, lates, or undertimes during the month.
The number of months worked in a year is called employment length. For instance, the duration of an employee's employment is ten months if they worked from February to November.
The 13th month's pay calculation does not take into account maternity leave. For instance, only the months during which an employee was present at work will be included in the calculation if she took two months of maternity leave. Even if the employee was compensated while on maternity leave, this still applies. ,'_com-leader-1','ezslot_6',196,'0','0'_('div-gpt-ad-_com-leader-1-0');
Let's say you worked for the company for a full year and received a monthly basic salary of $15,000. Your 13th month's pay is 15,000, according to the calculation.
15,000 divided by 12 months equals 15,000 Now, what if you have only been employed for less than a year? If that is the case, your 13th month pay will be based on how long you have worked for the company. If you have only been employed for nine months and earn a basic salary of 15,000 yen, your 13th month's pay will be 11,250 yen.
Your monthly basic salary may not be the same throughout the entire year because of absences, unpaid leaves, undertime, and other deductions. 15,000 divided by nine months equals 11,250. If you have these salary deductions, you can figure out your 13th month's pay by subtracting the deductions from your basic salary each month and adding up all of your monthly salaries to get your annual salary. Lastly, to determine your 13th month's pay, divide your total salary by 12.
We have provided an Excel spreadsheet and a 13th month pay calculator that you are free to use and share with anyone.336,280],'_com-large-mobile-banner-1','ezslot_5',197,'0','0'_('div-gpt-ad-_com-large-mobile-banner-1-0');
Make Use of Our Free Online 13th Month Pay Calculator Using our free online 13th month pay calculator, you won't have to Do It Yourself. Simply enter your monthly basic salary, minus any deductions (for unpaid leave, absences, undertime, etc.), for each month that you are employed. during the year, and then click the Calculate button to find out how much you get paid for the 13th month.
13th Month Pay Calculator To determine your 13th month's pay, enter your basic salary and monthly deductions.
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Note for data reset: After you click ""Calculate,"" the outcome will be displayed below.
Disclaimer: The information obtained by utilizing our online calculator is not and should not be construed as legal or financial advice. It is provided solely for illustrative purposes. We disclaim all responsibility for any alleged losses or liabilities resulting from the use of our online calculator.
Download Our Excel Spreadsheets for Your 13th Month's Pay If you prefer not to use our calculator, we also offer a free spreadsheet that will calculate your 13th month's pay based on your monthly basic salary and any deductions, if any. You can open the Microsoft Excel file or the Google Sheets file by clicking on any of the links below: 336,280],'_com-large-mobile-banner-2','ezslot_13',198,'0','0'_('div-gpt-ad-_com-large-mobile-banner-2-0);
13th Month Pay Spreadsheet Calculator Microsoft Excel Google Sheets After opening the spreadsheet in Excel and downloading it, click ""Enable Editing"" to edit it and add your own data. Simply fill in the appropriate fields for your basic salary, absences, and late or underpaid pay, if any. The totals and your 13th month's pay will be calculated automatically by the spreadsheet.
Click File > Make a Copy to create your own copy of the spreadsheet in Google Sheets. You can begin entering your data to calculate your 13th month's pay after creating a copy.
You can inquire about your HR department's methodology if there are any discrepancies or differences between your own calculation and your actual 13th month pay. It's possible that you didn't know about certain deductions or that you tallied them incorrectly.
Who is eligible to receive their thirteenth month's pay? Employees who have worked for at least one month and are not in managerial positions are eligible to receive their 13th month's pay. Who is unable to get their 13th month's pay? Government employees, housekeepers, and workers who are paid on a commission or per-task basis, such as freelancers, are excluded from receiving their 13th month's pay.580,400],'_com-leader-2','ezslot_14',199,'0','0'_('div-gpt-ad-_com-leader-2-0'); I manage people. Can I still get paid for the 13th month? If their company or employer decides to do so, managers and employees with managerial responsibilities can, in fact, receive their 13th month's pay. Can employees who have been fired or resigned continue to receive their 13th-month pay? Employees who have resigned or been fired are still eligible for their 13th month's pay. The amount is calculated from the employee's first day of work in a calendar year until their resignation or termination. Does my 13th month's pay have to be taxed? Your 13th month's pay will only be taxed if it is more than 90,000 yen under the TRAIN Law. This is higher than the previous rate of 82,000 yen for tax exemption. If I have not received my 13th month's pay, what should I do? All private employers are required to provide eligible employees with 13th month benefits or face administrative fees. Either by filling out an online form or calling the DOLE's 24/7 hotline 1349, you can report unethical employers.
Final Thoughts: The 13th month has been of great assistance to many Filipinos who are having difficulty meeting their financial obligations during these trying times. It gives families extra money for Christmas and New Year's Eve so they don't have to use their savings or household budget for gifts, parties, and other holiday expenses. 3336,280],'_com-leader-3','ezslot_17',600,'0','0'_('div-gpt-ad-_com-leader-3-0');
Utilizing our free 13th month pay calculator and spreadsheet, you can ensure that you receive the exact benefits that you are entitled to. If you think your friends might be interested in learning about their 13th month's pay, please feel free to share this article with them. Please leave a comment below if you have any questions or suggestions." - https://www.affordablecebu.com/