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This article will show you how to calculate your 13 month salary in the Philippines. If you haven’t received your 13 month salary, you can always count on Robocash for a quick loan. You must be a Filipino citizen from 21 to 70 years old and provide 1 valid ID. And in 15 minutes the money will be in your pocket!

Key takeaways:

  • The 13th month pay is a source of extra income for employees who have shown loyalty to the company.
  • However, many employees do not understand how to calculate it.
  • In this article, we will show you an example of how to calculate your 13th month pay.
  • If you haven’t received your paycheck for month 13 you can always rely on Robocash for a quick loan.

How to Compute Your 13th Month Pay in the Philippines?

The 13th month pay in the Philippines is one of the most anticipated pays of the year. Contrary to popular belief, it is not a bonus. It is rather the right of an employee. Today, you will learn all you have to know about the 13th month pay and how to calculate your 13th month pay.

What Is 13th Month Pay in the Philippines?

The 13th month pay is a law. It is given to employees every December of the year. It is a mandatory benefit where the employer gives one month’s worth of salary to an employee.
The thing is that the 13th month pay is not always equal to a month of salary. It is calculated according to the number of months you have worked for your current employer.
Take note that the 13th month pay is only based on your basic income. It is not calculated based on your bonuses and employment allowances. The 13th month pay is only computed from the time that you were employed, so it can get confusing.
Do not worry, we will teach you how it is computed.

FAQ

  • Is 13th month pay prorated Philippines?
    Even when you leave the company, you are entitled to 13 months of salary . This is also known as 13-month pro rata pay, which is paid to a permanent employee who has worked less than 12 months.
  • Is 13th month pay taxable Philippines?
    The 13thmonth pay is exempt from tax, up to a limit of PHP 90,000 (US$1,778) and is mandatory.
  • What is the rule for 13th month pay?
    The required 13-month payment is due no later than December 24 of each year. An employer may give its employees half of the required 13 months' pay before the start of the regular school year and the other half by December 24 of each year.

How to Compute 13th Month Pay?

The 13th month pay is 1/12 of your salary. In essence, the 13th month pay is equivalent to your basic salary multiplied by the number of months you worked for the company.
The 13th month pay is given no later than the 24th of the month, which means that the employer will assume that you have worked the entire month of December to be able to compute it.
The formula for the computation of 13th month pay in the Philippines is the following:

(Basic salary x months worked) / 12 months

Let us say that your basic salary per month is ₱20,000. If you worked from September to December, then you have worked for 3 months.
The calculation will be the following:

₱20,000 x 3 months = ₱60,000;
₱60,000 / 12 = ₱5,000.

Your 13th month pay, not including your salary for the month of December, is ₱5,000. Remember that if your salary includes the allowance, bonuses and commissions, they are not part of the calculation.
In the next section, we will be calculating 13th month pay based on different scenarios.

Example of Calculation of 13th Month Pay for 2020

Earlier, we showed you the basic way of how to compute 13th month pay for 2020 in the Philippines. It is pretty much straightforward. But what if you have absences and leaves?
What we will compute in this section is an example for an employee who has earned different amounts in several months. This is called prorated 13th month calculation.
Let us take the scenario below:

January – ₱20,000
February – ₱20,000
March – ₱15,000
April – ₱25,000
May – ₱20,000
June – ₱13,000
July – ₱32,000
August – ₱19,000
September – ₱20,000
October – ₱13,000
November – ₱13,000
December – ₱20,000

The basic pay of this employee is ₱20,000 per month. On some occasions, the employee did not earn the full amount because he had unpaid absences. In some months, he earned more than ₱20,000 because he rendered overtime.
Take note that the salary presented is just the basic pay, and does not include other pays like bonuses, sales commissions, and others.

Now, the 13th month pay computation for 2020 is like this: simply add all the amounts, and then divide it by 12.

Our prorated 13th month pay calculator will show this result: ₱230,000 / 12 = ₱19,166.67

This method is used on how to compute 13th month pay with absences, even for 13th month pay where you have earned extra because of the overtime rate for 2020 in the Philippines .
Since the 13th month pay is computed by December 15, the assumption of the company is that you will work for the entire month of December.
If you want to calculate yours, you can search online for a website that has the calculator or software for computing 13th month pay.

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Useful Facts about the 13th-Month Salary in the Philippines

There are many questions about the 13th month pay in the Philippines, and we deemed it best to address some of those common questions here.

When should I get the 13th month pay? – It has to be distributed to the employees no later than the 24th of December.

Can I still get 13th month pay if I resign? – Yes, you are entitled to get this, and the 13th month pay will be given to you as part of your backpay.

How much is the 13th month pay of the employee? – The calculation is the same; but of course, the total salary that will be divided by 12 is lesser since you have resigned.

Who has the right to get a 13th month pay? – Every employee who has been an employee for at least one month before the 13th month pay distribution is entitled regardless of rank or pay grade.

What is a basic salary? – Basic salary is your base rate that is your entitlement. It does not include commissions and bonuses.

So far, these are the most frequently asked questions about the 13th month pay. If you have other questions, we suggest that you direct them to your HR or your finance or payroll department, especially if you have a dispute.

The Best Ways to Spend Your 13th Month Pay

Here are some of the best ways to spend your 13th month pay in the Philippines:

1. Buy gifts – 13th month pay is typically used to buy gifts for children and other loved ones. Yes, you can splurge, but do not use all of it. It is also common for 13th month pay to spend it on gadgets such as new phones and tablets.

2. Invest – you can use your 13th month pay to invest in financial vehicles such as mutual funds and the stock market. This is the best time of the year to stock up on your investment and let your money grow.

3. Save as cash – the last thing you can do is just to save it as cash in your bank account. After all, if you have lived for 12 months with no extra money, you can do the same during the holidays.

There is really no right or wrong way to spend your 13th month pay. It is money that you earned, and you have all the right to spend it the way you want to. However, it is still sound financial advice to leave some and invest this money so it can grow.

What to Do if You Don’t Get 13th Month Pay

If you did not get a 13th month pay, you need to file a report to the Department of Labor and Employment or DOLE.
The 13th month pay is a mandatory benefit. In fact, the Philippine Senate is now advancing the 14th month pay. All employees are entitled to get a 13th month pay, provided that they have worked at least one month in the company.

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Emergency Loan in RoboCash

If you did not get your 13th month pay, or if your salary plus your 13th month pay are not enough, you could always get a loan, so you do not have to spend Christmas with no money. One thing you could look at is Robocash. It is an online establishment that offers loans to those who qualify.

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To be able to apply, you must meet certain requirements. Here are the requirements of Robocash:

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  • You must be between 21 and 70 years of age.

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About 14th month pay computation in the Philippines

Apart from the 13th wage in the Philippines has a Senate bill that proposes a mandatory 14-month wage for all workers. The author of the bill wants the 14th month pay approved for all officially employed Filipinos. Regardless of employment status, workers in public and private companies will be paid their 13-month salaries no later than June 14 and their 14th month salaries no later than December 24.

And how to compute 14th month pay? The calculation of pay for month 14 is the same as for month 13. The minimum wage for the 14th month is at least half of the employee’s total basic pay. Under the 14th month pay law the bonus will be available to all employees who have been with the company for at least one month during the calendar year.

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Written by: Sean Martin D. Plantado

Author pages:
Sean Martin Plantado is the head of Customer Care Dept. and Online Sales Dept. of Robocash Finance Corp. creating articles, blogs, and other learning mediums that helps Filipinos struggling on their financial literacy. Sean also loves Cycling, Photography, Cinematography, Online gaming, Fine Arts, and dreams of becoming a Doctor of Veterinary Medicine.

Reviewed by: Rafael Hular

Author pages:
Rafael “Raffy” L. Hular is, the Finance and Accounting Manager. of Robocash Finance Corp., monitoring and controlling the flow of cash that comes in and out of the company to meet the company’s business needs, preparing the financial reports and analysis of income and expenses, and monitoring tax compliance.  Raffy loves reading Japanese comics called manga and watching Japanese animated cartoon series. He dreams of establishing his own Accounting and Auditing Firm and teaching in a University.