13th-month pay & Christmas Bonus: What you need to know?

The13th-month pay and Christmas Bonus might be confusing for some. Are you eligible to receive one of the two or both? What is the difference and similarities between these two benefits?

During the month of December, employees enjoy benefits like the 13th-month pay and Christmas bonus. Both benefits are given by employers in a monetary form.


What is the difference between the 13th-month pay and Christmas Bonus?

The 13th-month pay is mandatory given to all employees by their employers as per P.D. 851. Presidential Decree 851 was passed and signed by the late President Ferdinand Marcos in 1976.

The decree mandates all employers to give their employees a 13th Month Pay before December 24 of every year. Failure to comply with will receive a violation.

While the Christmas bonus( also known as Company Bonus) is dependent on employers. It is not government-mandated and is given out of generosity. In addition, originally there is no fix date employers give the Company Bonus. They may choose to give it before, during or after December. But since it is commonly given during the month of December thus it is called a Christmas Bonus.

Who are eligible to receive the 13th-month pay?

The 13th Month Pay should be paid to all rank-and-file employees regardless of the nature of their employment and irrespective of the methods by which their wages are paid after at least one month of tenure with an employer. However, workers holding managerial positions are not entitled to it. Government employees, long with freelancers, contractual workers, employees who are paid solely on commission (real estate brokers, etc) are not included in the 13th-month pay as stated in PD 851.

Related  Region 3 Minimum Wage 2023

The 13th Month Pay shall not be less than one-twelfth of the total basic salary earned by the employee within a calendar year. Also covered by the payment of the 13th Month Pay are household helpers or “kasambahay”. 

Christmas Bonus & 13th Month Pay Computation

Since the Christmas bonus is voluntarily given by employers, it is up to the company as to how much they want to give their employers. However, for the 13th-month pay there is a standard computation to follow.

Monthly Basic Pay x Number of months of working with the company in the current year) / 12 Months = 13 Month Pay

For instance, your basic salary for a month is 10,000 and you start working by September, your 13th-month pay will be P2,500. See how it is computed below:

10,000 X 3/12= 2,500 (13th Month Pay)

Are resigned employees still eligible for 13th-month pay?

Yes, you are still eligible to receive the 13th-month pay (3) as long as you worked for at least a month. The company or employers should give it as part of the back pay.

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