13th Month Pay in the Philippines

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Php 1000 bill.

In the Philippines, 13th month pay is one-twelfth of the basic salary of an employee within a calendar year, to be paid to the employee not later than December 24 of that year.

Contents

Background

Presidential Decree No. 851, issued by President Ferdinand E. Marcos on December 16, 1975, mandated the payment of 13th month pay before December 24 of every year, by all employers to their employees receiving less than Php 1000 per month regardless of nature of employment. The stated purpose for the issuance was “so that they may properly celebrate Christmas and New Year.

Exceptions

The implementing rules of PD 851 provide that an employer may also give one-half of the 13th month pay before the opening of the school year and one-half in December. The exceptions were:

  • distressed employers or those who suffered substantial losses,
  • the government,
  • employers already paying 13th month pay or its equivalent,
  • employers of household helpers or those in the personal service of another, and
  • employers of those paid on purely commission, boundary, or task basis and those who are paid a fixed amount for performing a specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis.

Special Feature

A special characteristic of 13th month pay is that it is expressly considered not part of regular pay for purposes of computing overtime, premium pay, and contributions.

Amendments

On August 13, 1986, President Corazon Aquino removed the condition that only employees earning less than Php 1000 are entitled to 13th month pay. She made 13th month pay applicable to all rank and file employees regardless of salary, provided that they have worked for at least one month during the calendar year.

Citation

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