13th Month Pay
All employers are required “to pay their rank-and-file employees 13thmonth pay, regardless of the nature of their employment and irrespective of the methods by which their wages are paid, provided they worked for at least 1 month during a calendar year.” It must be given not later than December 24 of every year.
The 13th month pay is not to be less than 1/12 of the total basic salary earned by an employee in a calendar year. For the purpose of computing 13th month pay, the basic salary includes all remunerations or earnings paid by his/her employer for services rendered. It does notinclude allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night shift differential and holiday pay, and cost of living allowance (COLA).
However, these salary-related benefits should be included as part of the basic salary in the computation of the 13th month pay if these are treated as part of the basic salary of the employees, through individual or collective agreements.
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