§ 13th-month pay is payable not later than December 24 of every year.
§ Not all employers are required to give their employees 13th-month pay. The exclusions are found in No.2 [d], Revised Guidelines on the Implementation of the 13th-Month Pay Law.
§ For an employee to be entitled, he must have worked for at least one (1) month during a calendar year.
§ Minimum 13th-month pay amount is one-twelfth (1/12) of the total basic salary earned within a calendar year.
§ Premium pay is not included in the 13th-monthy pay computation. Only basic salary. Except:
o When it comes to salary-related benefits
o If agreed upon in the Collective Bargaining Agreement (CBA)
o If the benefits are given due to company practice or policy
Commission that is in the nature of profit sharing is not part of 13th-month pay computation. Conversely, those which are regularly received should form part of the pay.
§ The employer should pay the difference for any amount given less than the mandate of the law.
§ Payment above the minimum does not exempt employer from paying the 13th-month pay.
§ Extras, casuals, employees paid on piece-work and seasonal employees are entitled to 13th-month pay. But OFWs are not entitled unless provided in the contract.
§ Managerial employees are not entitled to the benefits.
§ Separated employees who are covered and qualified are entitled to 13th-month pay pro-rata.
§ Overload pay should not form part of the 13th-month pay of teachers. Unless it forms part of the school policy.
§ 13th-month pay is part of the retirement benefits under Article 287 of the Labor Code.
§ 13th-month pay is exempted from tax.
Should absences without pay be deducted from the computation of the 13th month pay?
Since this benefit is based on the basic salary of the employee for the calendar year and we follow the "no work, no pay" rule, absences without pay will in effect have an impact on the employee's 13th month pay. Meaning, the employer has to compute the total basic salary paid to the employee in a calendar year and then get the 1/12 as 13th month pay.
The amount equivalent to absences without pay should not be deducted from the 13th month pay due the employee.