Computation of 13th Month Pay

1. Computation

These are the steps on how to compute for the 13th month pay.

The following are the assumptions:

1) The employee’s daily wage rate is Php1,000.00;

2) The workweek is 6 days a week; and

3)There is one rest day per week.

a. Complete basic salary earned in a year

If covered employees have complete attendance in a year, then their 13th month pay is computed as follows:

MonthsWorkdaysServices RenderedBasic Salary Earned (Php)
January27Complete attendance27,000.00
February24Complete attendance24,000.00
March26Complete attendance26,000.00
April26Complete attendance26,000.00
May26Complete attendance26,000.00
June26Complete attendance26,000.00
July27Complete attendance27,000.00
August27Complete attendance27,000.00
September26Complete attendance26,000.00
October26Complete attendance26,000.00
November26Complete attendance26,000.00
December26Complete attendance26,000.00
Total Basic Salary Earned in a Year314,000.00
Formula:
Total basic salary earned during the year / 12 months = proportionate 13th mo. pay
Sample computation:
Php314,000.00 / 12 = Php26,166.17

b. Incomplete basic salary earned in a year

If covered employees have incomplete attendance in a year, then their 13th month pay is computed as follows:

MonthsWorkdaysServices RenderedBasic Salary Earned (Php)
January27Complete attendance27,000.00
February241 day absence23,000.00
March26Complete attendance26,000.00
April26Complete attendance26,000.00
May262 days absence24,000.00
June26Complete attendance26,000.00
July27Complete attendance27,000.00
August271 day leave with pay26,000.00
September26Complete attendance26,000.00
October26Complete attendance26,000.00
November262 days leave with pay24,000.00
December26Complete attendance26,000.00
Total Basic Salary Earned in a Year307,000.00
Formula:
Total basic salary earned during the year / 12 months = proportionate 13th mo. pay
Sample computation:
Php307,000.00 / 12 = Php25,583.33

Basic salary is defined as ‘all remunerations or earnings paid by an employer to an employee for services rendered.’ (Rules and Regulations Implementing P.D. 851, Section 2(b). The key words in the definition are “for services rendered.”

Thus, during absences, the employee does not earn any salary. In the above example, the employee could have earned Php24,000.00 in February because there were 24 workdays. However, due to a 1-day absence, the employee was only able to earn Php23,000.00. The same goes for the month of May wherein the employee had 2 absences and thus was only able to earn Php26,000.00.

As for leave with pay, the employee may have received pay for the day of absence because of a leave credit, and not for services rendered. Thus, by definition, the amount paid to the employee is not part of basic salary earned. To be clear, the employee did not perform any service or rendered work to be entitled to the pay during the leave with pay, which is a requirement for basic salary earned. (See: San Miguel Corporation (Cagayan Coca-Cola Plant) v. Inciong, G.R. No. L-49774, February 24, 1981; St. Michael Academy v. NLRC, Bolosiño, G.R. No. 119512, July 13, 1998; Central Azucarera de Tarlac v. Central Azucarera de Tarlac Labor Union-NLU, G.R. No. 188949, July 26, 2010)

NB: The 2023 DOLE-BWC Handbook takes a different approach. For leave with pay, the employee’s monthly salary is not reduced, instead it is as if the employee has rendered service. For example, in the month of June, the employee receives a full month’s salary despite 5 days leave with pay, i.e.., the employee did not render service for 5 days.

Related

13th Month Pay

Cases: 13th Month Pay

Similar Posts