13TH-MONTH PAY IN THE PHILIPPINES: HOW TO COMPUTE 13TH-MONTH PAY? | GUIDEPH

The 13th-month pay is an additional payment given to representatives toward the year's end. Be that as it may, the estimation of the 13th-month pay relies upon different components and it, for the most part, mimics the value of an employee's monthly pay. 

However, the inquiry that boggles on the mind of each employee is the manner by which a specific company computed their 13th-month pay. In this article, I will try to respond to the topic of how to compute the 13th-month pay here in the Philippines. 

13TH-MONTH PAY: DEFINITION

13th-month pay implies an advantage given to a worker adding up to one-twelfth (1/12) of the employee's essential salary inside a schedule year. 

It is suggested by the Philippine labor laws as a required advantage and ought not to be mistaken for the "Christmas Bonus" ordinarily practiced in the local business setting. The Christmas Bonus isn't an obligation, and must be released upon an employer' intentional judgment. It is normally given by employers to show thankfulness and appreciation for the administration rendered by their workers inside a year. The 13th-month pay, then again, is a prerequisite as indicated by the law. Be that as it may, bosses who neglect to give them before the year's over are dependent upon lawful request by the Department of Labor and Employment (DOLE). 

WHAT COMPRISES A “BASIC SALARY”?

Basic salary incorporates all profit of a worker paid by the employer for administrations rendered to the organization (for reasons for registering the13th-month pay). Be that as it may, the following should not be remembered for the calculation of the fundamental salary:

• Average cost for basic allowances;
• Benefit sharing installments; 
• Cash equivalent not used to travel and sick leave credits; 
• Overtime pay; 
• Premium compensation; 
• Night shift differential; 
• Holiday pay; 
• All allowances and money related advantages which are not thought of or incorporated as a major aspect of the normal or essential salary of an employee.

WHO ARE ELIGIBLE TO RECEIVE THE 13TH-MONTH PAY?

1. Employees 

Employees in the private segment (all majority), regardless of their position, assignment, or business status, and any strategy by which their wages are paid. (For the typical employee to be secured, the person in question more likely than not worked for at any rate one month during the schedule year.) 

Managerial employees are excluded from the 13th-month pay although a few organizations despite everything decide to give the benefit.

(Managerial employees are workers whose agreement of business requires or allows the person in question to enlist, move, advance, suspend, lay off, excuse, prize, teach or declare the complaints of different employees, or to make direct suggestions on these issues to the business.) 

2. Employers

All employers are required to pay their typical workers 13th-month pay notwithstanding the quantity of employees they utilize. 

(An employer is an individual or business that utilizes at least one individual, particularly for wages or compensation. This could be an association, establishment, government element, organization, institution, proficient services firm, non-benefit affiliation, independent business, and store.) 

WHEN IS THE 13TH-MONTH PAY GIVEN?

Under Presidential Decree No. 851, businesses from the private part in the Philippines are compelled by a solemn obligation to pay their average workers a 13-th Month Pay not later than December 24 consistently. The 13th-month pay is comparable to one-twelfth (1/12) of a worker's essential yearly compensation. 

A business, be that as it may, may give the worker's one-half (½) of the 13-month pay before the opening of the normal year and the staying half prior to December 24 of consistently. 

HOW IS THE 13TH-MONTH PAY COMPUTED?

The amount of the 13th-month pay will not be under 1/12 of the complete essential compensation gained by the representative inside a schedule year. 

Once more, specific kinds of profit are excluded as a "basic pay" for reasons for processing the 13th-month pay (referenced above on the meaning of "basic salary"). 

For instance, on the off chance that you get holiday pay, sick advantages,  benefits, premium for works performed on rest days and holidays, pay for regular holidays, night differential, maternity leave benefits, additional time pay, or all recompenses and financial advantages which are NOT thought of or coordinated as a component of the regular or basic salary, these profits will be avoided in the calculation of your basic salary.

FORMULA AND COMPUTATION

The formula is simply basic. You should compute all your pay or income (except profit not thought about a piece of your basic pay) inside a schedule year and separation it by 12. The total is the comparable 13th-month pay that must be paid to you by your employer.

1. Step by step instructions to summarize or process your 13th-month pay in the event that you have unlucky details without pay/maternity leave/unpaid leaves/paid leaves/late record. 

Observe that your 13th-month pay is anything but a fixed sum comparing to 1/12 of your monthly basic pay.  It is determined dependent on the real number of days that you worked including leaves with pay. 

2. Estimating or registering the 13th-month pay if there's a compensation increment or pay differential. 

The pay increment will be considered when registering the13th-month pay, given that the extra sum is just applied in the primary month the boost in salary produced results and from that point. 

So for instance in November you got a pay increment of Php 1,000, your essential compensation for November and December will be Php 17,000, respectively. This sum will at that point be added to your total basic pay earned during the year. 

3. Computing 13th-month pay for resigned employees or isolated/terminated employees.

Resigned or separated employees are as yet qualified to get the13th-month pay. 

Sec. 6 of the Revised Guidelines on the Implementation of the 13th-Month Pay Law provides that even if you have resigned from your job or was terminated, you are still entitled or eligible to receive the 13th month-pay in proportion to the amount of time you worked during the year, approximately from the time you started working during the calendar year up to the time you resigned or terminated from the service.

For instance, you worked only from January to September. Your essential salary during the said period will be included and from that point partitioned into 12. The sum after dividing is your proportionate 13th-month pay. 

4. Processing the 13th-month pay for Absence Without Leave or AWOL workers or representatives with inconclusive leave. 

AWOL employees also those under indefinite leave are qualified or eligible for the 13th-month pay gave these workers have attempted to in any event one month during a schedule year. 

For example, on the off chance that you labored for a quarter of a year and went into indefinite leave after, you will be qualified for a customized 13th-month pay. 

As some may state, the 13th-month pay is a foreseen pay held up by lots of employees since they can have an additional payment which is ideal and important during the year's end for Christmas festivity or on the mid-year for the enrolment of their children.

I trust I have addressed the inquiry that boggles your psyche on the most proficient method to process your 13th-month pay.