13th Month Pay Sample Computation of Employee in NCR who Resigned Before the Year Ends

13th Month Pay Sample Computation of Employee in NCR who Resigned Before the Year Ends

13th Month Pay is one of the mandatory benefits that should be given to covered employees. Under P.D. 851 all employers are required to pay all their employees, regardless of the nature of their employment, a 13th-month pay not later than December 24 of every year.

The question is should this cover all employees such as even those holding supervisory and managerial positions?

On August 13, 1986, President Aquino issued Memorandum Order No. 28 modifying P.D. 851 to the extent that all employers are required to pay all their rank-and-file employees a 13th month pay not later than December 24 of every year.

The 13th Month Pay Law, which provides the rules on the entitlement and computation of the 13th month pay, cannot be applied to a managerial employee, as the law applies only to rank- and-file employees. (Wuerth Philippines, Inc. vs. Ynson, G.R. No. 175932, February 15, 2012.)

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Further, the Supreme Court held in the case of Torres vs. Rural Bank of San Juan, Inc. (G.R. No. 184520, March 13, 2013) that pursuant to Memorandum Order No. 28, as implemented by the Revised Guidelines on the Implementation of the 13th Month Pay Law dated November 16, 1987, managerial employees are exempt from receiving such benefit without prejudice to the granting of other bonuses, in lieu of the 13th month pay, to managerial employees upon the employer’s discretion.

Thus, supervisors and managerial employees are not entitled to the 13th month pay benefit. The supervisors are disqualified if they fall within the meaning of “other officers and members of the managerial staff” under Article 82 of the Labor Code, as amended.

Hence, how should the 13th month pay is computed if an employee resigned before the end of the year?

Illustration:

Lodi Petmalu is an employee of Hanefna Company, Inc. based in NCR and is receiving a minimum wage. He was hired May 2, 2018. He reports to work from 8:00 a.m. to 5:00 p.m., Monday to Saturday. Thus, HR uses the 313 factor in computing the monthly equivalent of his pay. 

However, on April 30, 2019 he submitted his resignation letter intending to separate from the company effective May 31, 2019. He has a total of ten days of absence from January 2019 to the time of his resignation.

Based on payroll records, Lodi Petmalu received the following basic salary for the year 2019 :

Month                                     Absences                              Wage            

January 2019                       2                                              12,932.75

February 2019                     0                                              14,006.75

March 2019                           1                                              13,469.75

April 2019                             0                                              14,006.75

May 2019                              0                                              14,006.75

Total                                                                                       68,422.75

Problem:       Compute his 13th month pay

Formula for 13th Month Pay:           Total Basic Salary Earned During the Calendar Year / 12

Solution:

NCR Minimum Wage: PhP537.00

Factor: 313 days

Equivalent Monthly Rate:    PhP537.00 x 313 days / 12 months

PhP168,081.00 / 12 months

PhP14,006.75

Total Salary Earned Jan-May 2019: PhP68,422.75

13th Month Pay: PhP68,422.75 / 12

PhP5,701.90

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