Photo from Unsplash | micheile henderson
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.
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:
13th month pay shall mean one-twelfth (1/12) of the basic salary of an employee within a calendar year. (Section 2, Rules and Regulations Implementing Presidential Decree No. 851)
The evident intention of Presidential Decree No. 851 is to grant an additional income in the form of the 13th month pay to employees not already receiving the same so as “to further protect the level of real wages from the ravages of world-wide inflation. (Jenny Agabon vs. National Labor Relations Commission, G.R. NO. 158693, November 17, 2004)
Computation of 13th Month Pay
Pursuant to Section 2 of the Rules and Regulations Implementing Presidential Decree No. 851 (13th Month Pay Law):
“Thirteenth-month pay” shall mean one-twelfth (1/12) of the basic salary of an employee within a calendar year.
Meanwhile, “basic salary” shall include all remunerations or earnings paid by an employer to an employee for services rendered but may not include cost-of-living allowances granted, profit-sharing payments, and all allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee.
The 13th-month pay mandated by Presidential Decree (P.D.) No. 851 represents an additional income based on wage but not part of the wage. It is equivalent to one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year. All rank-and-file employees, regardless of their designation or employment status and irrespective of the method by which their wages are paid, are entitled to this benefit, provided that they have worked for at least one month during the calendar year. If the employee worked for only a portion of the year, the 13th-month pay is computed pro rata. (Central Azucarera de Tarlac vs. Central Azucarera de Tarlac Labor Union-NLU, G.R. No. 188949, July 26, 2010)
To put it simply, take your total basic salary for the year and divide it by 12, then that is your proportionate 13th month pay.
Read also: Are employers liable for non-payment of 13th month pay?
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.
All rights reserved.