13th Month Pay
BenefitsFeaturedA mandatory benefit in the Philippines where employees receive an additional month's salary, typically paid before December 24th each year.
The 13th Month Pay is one of the most well-known mandatory benefits in the Philippines, established under Presidential Decree No. 851. This benefit requires employers to pay employees an additional month's salary, calculated based on the basic salary earned during the year.
Key Requirements:
- Must be paid on or before December 24th
- Calculated as 1/12 of the total basic salary earned during the year
- Required for all rank-and-file employees
- Pro-rated for employees who worked less than 12 months
This benefit is separate from any bonuses or other compensation and is considered a legal entitlement, not a discretionary benefit.
Examples
Full Year Employee
An employee earning ₱30,000 monthly would receive ₱30,000 as 13th month pay (₱30,000 × 12 ÷ 12 = ₱30,000)
Partial Year Employee
An employee who worked 6 months earning ₱25,000 monthly would receive ₱12,500 (₱25,000 × 6 ÷ 12 = ₱12,500)
Common Use Cases
- •Annual mandatory benefit payment
- •Year-end financial planning for employees
- •Compliance with Philippine labor law
- •Employee retention and satisfaction