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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE
- The thirteenth-month pay shall not be less than one-twelfth (1/12) of the total basic salary earned by an employee in a calendar year.
The Revised Guidelines on the Implementation of the 13th Month Pay Law states that:
“Amount and payment of 13th Month Pay
(a) Minimum of the Amount. — The minimum 13th month pay required by law shall not be less than one-twelfth of the total basic salary earned by an employee within a calendar year. xxx” (Item 4: Amount and Payment of 13th Month Pay, Revised Guidelines on the Implementation of the 13th Month Pay Law)
Such provision has been adopted and reiterated in 2022 Handbook on Workers’ Statutory Monetary Benefits, which provides that the thirteenth month pay shall not be less than one-twelfth (1/12) of the total basic salary earned by an employee in a calendar year.
The law says:
“The thirteenth-month pay shall not be less than one-twelfth (1/12) of the total basic salary earned by an employee in a calendar year.
The “basic salary” of an employee for the purpose of computing the thirteenth-month pay shall include all remunerations or earnings paid by his or her employer for services rendered. It does not include allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night shift differential and holiday pay, and cost of living allowance (COLA). However, these salary-related benefits should be included as part of the basic salary in the computation of the thirteenth-month pay if these are treated as part of the basic salary of the employees, through individual or collective agreement, company practice or policy.” (Thirteenth Month Pay, 2022 Handbook on Workers’ Statutory Monetary Benefits)
Further, Labor Advisory No. 23, Series of 2022 or the Guidelines on the Payment of Thirteenth-Month Pay provides that:
“The minimum 13th-month pay shall not be less than one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year. To illustrate:
(II. Amount of 13th Month Pay, Labor Advisory No. 23-22)
Related article: Who are the employers exempted from giving 13th month pay to their employees?
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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