Even when you leave a company, you’re entitled to your 13th month pay. The 13th month pay shall be in the amount not less than 1/12 of the total basic salary earned by the employee within the Calendar day. The 13th month pay shall not be less than 1/12 of the total basic salary earned by an employee within a calendar year. While this is a measure that is unopposed by the working population, it isn’t the case for the businessmen running the private business sector in the Philippines. https://www.globalization-partners.com › blog › what-is-13th-month-pay For the most part, the 13th month pay covers only the basic salary of an employee. How to compute your 13th month pay. 12/12 X PHP20,000 = PHP20,000 Six months: 6/12 X PHP20,000= PHP10,000 The holidays may be a good time to take a break and unwind. However, if these benefits are treated as part of the basic salary in the employee’s contract or agreement, then they shall be included in the computation of the employee’s 13th-month pay. An employer, however, may give to his or her employees one-half (1/2) of the 13th month pay before the opening of the regular school year and the remaining half on or before December 24 of every year. 10 or the act that provides 14th month pay to government and private sector employees regardless of the employees’ status of employment. An employer, however, may give to his or her employees one-half (1/2) of the 13th month pay before the opening of the regular school year and the remaining half on or before December 24 of every year. How to Compute 13th Month Pay? But to put it simpler, the formula is to get your annual basic salary (basic salary times months rendered), deduct your unpaid absences, then divide it into 12. Monthly Basic Salary x Employment length 12 months . While it may sound complicated, once you understand the basics of 13th-month pay and the labor laws in your employee’s host country, it isn’t too challenging. 20,000 x 4 = 80,000 12 = 6,666.67 . This includes your basic pay and your paid leaves, including sick leave, maternity leave, and vacation leaves. Here are some simple yet useful tips on how to compute your 13 th month pay for the upcoming Christmas season.. Before you start with the math, the first thing you need to know is exactly what is included and excluded in the computation of your 13th month pay: 13th month computation inclusions. In a nutshell, the 13th-month pay is your basic annual salary divided by the number of months you rendered within the year. 13th Month pay vs Christmas Bonus. Wiser Ways to Spend 13th Month Pay. So how do you compute for 13th month pay? Here are some useful tips on how to compute the most-awaited payment: Gather all your pay slips for that year. Tally the total amount you have received. 13th month pay is equal to the Total basic salary EARNED during the year divided by 12. The 13th Month Pay, as provided by Presidential Decree no. The computation of the basic salary does not include allowances and monetary benefits that are not considered or integrated as part of the employee’s regular compensation. Thirteenth Month by Sweldong Pinoy is a tool for Filipinos in computing their 13th-month pays. The Tax Reform Acceleration and Inclusion Law or TRAIN Law was passed in... Business Downturn Due to the Pandemic. of the 14-month pay to workers. Recommended to you based on your activity and what's popular • Feedback The length of time is proportional a.) How to compute for 13th month pay? Put a good sum in your savings account. How to compute 13th-month pay if there’s a salary increase or salary differential. Before we tackle its computation, let’s define first the variables involved: 13th month and basic salary. The general formula is: 13th Month Pay = Total Basic Salary of the Year ÷ 12 For employees, it is highly encouraged to report such a case at the nearest DOLE office. If you are a new employee or this is the first time that you are about to receive a 13th month pay, the amount of your 13th month pay is equivalent to 1/12 of your “ total basic salary received ” in the whole calendar year. In these cases, the best practice is simply to divide the target annual guaranteed earnings by 13 and save the 13 th payment for when the bonus is due. For Filipinos, this is the month to look forward to. 851. It’s the equivalent of a monthly basic salary and is computed pro-rata according to the number of months that the employee has worked in a calendar year. How to Compute the 13th Month Pay. Follow These 6 Steps When Laying Off an Employee, Everything You Need To Know About Transformational Leadership Style and How You Can Implement It, 26 Characteristics of a Great Leader That Will Define Your Victory, 5 Reasons Why You Should Show Empathy in Leadership, The 6 Stages of Employee Life Cycle to Help You Get It Right. This is the simplest way on how to compute your 13th-month pay. An employer who fails to pay the 13th-month benefit can be subjected to administrative cases. However, it does not include the following: Generally, 13th month pay is computed based on 1 ½ of your total basic salary for the whole calendar year. Here is the basic 13th month pay formula in the Philippines. Annual Basic Salary (minus unpaid absences) /12 months = 13th month pay. He added that Dole would need to study the bill before indicating its position, which would also depend on the result of consultations. He added that Dole would need to study the bill before indicating its position, which would also depend on the result of consultations. DepEd Announced Christmas Break For Public Schools, The Basics Of Social Security System (SSS) That You Need To…, Length of employment for the calendar year (by December 31), Total annual income (minus unpaid absences). Only the amount in excess of the ceiling is taxed. Aside from 13th pay, another benefit to enjoy during December is the “Christmas bonus”. It may be computed pro-rata according to the number of months within a year that the employee has rendered service to the employer. Useful Tips on How To Compute Your 13th Month Pay. According to the law, the 13th-month pay should be provided to the employees on or before December 24 of each year. Rank-and-file employees are those who are not considered managerial employees. But above all that, nothing makes us more excited — especially employees — than our 13th month pay. "The number of days na hindi sila nakapasok, whether it is voluntary or involuntary, will have to be deducted in the computation of the 13th month pay," he said in a media briefing. WHAT IS 13TH MONTH PAY? Unlike the 13th-month pay which will be paid at the end of the year, this shall be paid on or before May 31st of each year in anticipation of school enrollment of the employees’ dependents. However, the computation will vary depending on your salary and length of service for the whole calendar. It may be computed pro-rata according to the number of months within a year that the employee has rendered service to the employer. WHAT IS 13TH MONTH PAY? Basically, the amount of the 13th-month pay is 1/12 of the employee’s annual salary. Senate President Vicente Tito Sotto filed a bill that will mandate employers in the government and private sectors to provide 14th-month pay to their employees, regardless of the employees’ status of employment. How to compute the 13th Month Pay. The 13th-month pay is computed based on 1/12 of the total basic salary of an employee within a calendar year, or your basic monthly salary for the whole year divided by 12 months. 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