Aside from food and gifts, what is another reason why you should be excited during the Christmas season? 13th month pay. It may not be a lot but the money you could get could help augment certain needs especially during this Season of Giving.
Here's what you need to know about 13th month pay:
What is 13th month pay?
13th month pay is a mandatory benefit given to all rank-and-file employees who worked for at least one year in the company. The sole purpose of this monetary benefit is to provide additional cash funds to Filipinos during Christmas and New Year.
It s the employer's prerogative on when to give it. Some give the benefit during the first week of December while others prefer before December 24. Regardless and as mandated by law, all employers must give this monetary benefit not later than December 24 of every year.
The good thing about 13th month pay is that it is not taxable as long as ithe amount you received plus other bonuses are less than P90,000.
What is included in the computation of this monetary benefit?
Your 13th month pay covers only your basic salary. This means any allowances and monetary benefits thar are NOT part of your monthly salary cannot be included in the computation.
That being said, what items are not part of your 13th month pay computation?
- Cash equivalent of unused vacation leaves
- Cash equivalent of unused sick leaves
- Overtime pay
- Any premium pay
- Night differential pay
- Holiday pay
- Cost of living allowance (COLA)
Nonetheless, there is an exemption. If any or all of the items enumerated were treated as PART of your basic monthly salary as stated in your employment contract, then these items will be included in the computation of your 13th month pay.
How do you compute for 13th month pay?
13th month pay is computed based on your 1/12 of your total basic salary within the calendar year.
For a clearer picture:
Annual Basic Salary (minus unpaid absences) / 12 months = 13th month pay
What is the difference between 13th month pay and Christmas bonus?
The main difference between the two is that 13th month pay is mandated by law while Christmas bonus is purely an employer's prerogative.
13th month pay must also be received by employees in the form of cash while Christmas bonus may be given either in cash or kind. To make it non-taxable, some employers provide Christmas bonus in the form of gift certificates or canned goods instead of cash.
What happens if your employer did not give 13th month pay?
First of all, that is NOT allowed. 13th month pay is a monetary benefit mandated by law, which means everyone must comply.
Second, you can file for an administrative complaint against your employer at the nearest DOLE office or DOLE office where the business is located. This way, appropriate measures will be taken and erring employers who do not comply with the law may be penalized.
Can resigned employees still get their 13th month pay?
The answer is yes, but with qualifications. Resigned employers may get their 13th month pay as a form of backpay IF they worked for the said employer for at least a month.
13th month pay is an excellent way to help you augment your needs especially during this season of giving. Still, this is not an excuse to splurge. There are several ways you can make the most out of this monetary benefit and this post will give you an idea on how to do it.