The 13th month pay is a mandatory monetary benefit that employers must give to covered employees, equivalent to at least one-twelfth (1/12) of the basic salary earned by the employee within a calendar year. The key question is who is entitled. All rank-and-file employees are entitled to 13th month pay, regardless of the nature of their employment (whether probationary, casual, or regular) and regardless of the method by which their wages are paid, provided they have worked for at least one month during the calendar year; a resigned or separated employee is entitled to a proportionate 13th month pay for the portion of the year they worked. The law distinguishes rank-and-file from managerial employees: managerial employees, those vested with powers or prerogatives to lay down and execute management policies or to hire, transfer, suspend, lay off, recall, discharge, assign, or discipline employees, are not covered by the mandatory 13th month pay, though many employers grant it to them as a matter of policy. Other exemptions include employers already paying an equivalent (such as a 13th month or more by way of a Christmas bonus already given), the government and its instrumentalities (except government-owned or controlled corporations operating essentially as private subsidiaries), household or domestic helpers (who instead have their own 13th month benefit under the Kasambahay Law), and employees paid purely on commission, boundary, or task basis in certain cases. The 13th month pay must be paid not later than December 24 of each year. So all rank-and-file employees who worked at least a month are entitled to a proportionate 13th month pay, while managers and certain others are exempt.
The Benefit
The 13th month pay is a mandatory benefit equal to at least 1/12 of the basic salary earned in the calendar year, paid not later than December 24.
Who Is Entitled
All rank-and-file employees are entitled, regardless of employment status (probationary, casual, regular) or how wages are paid, as long as they worked at least one month in the year. A resigned/separated employee gets a proportionate amount.
Who Is Exempt
- Managerial employees (though often granted it by policy);
- Government and its instrumentalities (with exceptions);
- Kasambahay (covered by their own law); and
- Employers already paying an equivalent.
Practical Takeaways
- Rank-and-file employees with 1+ month of service are entitled;
- It is proportionate for those who resigned or joined mid-year;
- Managers and some others are exempt; pay by Dec 24.
Frequently Asked Questions
Who is entitled to 13th month pay? All rank-and-file employees who have worked at least one month during the calendar year, regardless of whether they are probationary, casual, or regular, and regardless of how their wages are paid.
Are managers entitled to 13th month pay? Managerial employees are not covered by the mandatory 13th month pay, though many employers grant it to them as a matter of company policy.
Do resigned employees get 13th month pay? Yes. A resigned or separated employee is entitled to a proportionate 13th month pay for the portion of the year they actually worked.
When must 13th month pay be paid? Not later than December 24 of each year. Employers may pay half earlier and the balance by December 24, depending on company practice.
This commentary is for general informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a licensed attorney.
If you have questions about your rights or options under Philippine law, our firm is available to assist. You may reach us via Viber or WhatsApp, call us at 0995 433 5550, or send an email to vivasnobles@gmail.com. We look forward to hearing from you.