Employees in the Philippines Receive An Extra Month’s Pay By Law

Employees in the Philippines look forward to Christmas more than most, thanks to their 13th month pay law. Under Presidential Decree No. 851, employers from the private sector are required to pay their rank-and-file employees a 13th month pay no later than December 24th each year. The 13th month pay is the equivalent of one month’s pay and is not to be confused with the “Christmas bonus” commonly practiced by local businesses. Another benefit is that the 13th month pay is not subject to taxes. The 13th month pay was designed to show appreciation and gratitude for the service rendered by their employees within the year. Employees of government agencies and any political subdivisions aren’t eligible for the 13th month pay, nor are part-time employees of private companies. Amazingly, employees who resign before December still get their 13th month pay. Needless to say, an extra payday couldn’t come at a better time than right before Christmas.