All About the 13th Month Pay and Why It’s the Best Gift for Your Filipino Remote Workers

It’s nearly the end of the year, which means that many people are preparing for the holidays. There are various holiday traditions and practices all over the world (like the monarch’s Christmas speech, for instance). However, are you aware about the 13th month pay practice?

If you are an SME owner who has a?remote team ?in the Philippines, you might want to continue reading this article. Read on to learn more about the 13th month pay and why it’s the best gift for your Filipino remote workers.

What is 13th Month Pay?

If we think about it, the 13th month does not exist in any calendar. So, why do companies have to pay for it?

The answer depends entirely on where your business is located.

In some parts of Europe (except for Germany, Italy, Spain, Portugal, and Austria) and Africa, 13th month pay is voluntary. This means that the business owners decide whether or not to grant their employees extra salaries.

However, in the Philippines (and in most Latin American countries), 13th month pay is mandated by law.?

How is it calculated? To get the 13th month pay, the annual basic salary must be divided by twelve, which roughly equates to an employee’s one-month basic salary.

Furthermore, the 13th month pay is pro-rated. The rates depend on the number of months or days an employee has worked within a calendar year. However, it should not be less than 1/12 of their total basic salary.

The 13th month pay is also not synonymous with a Christmas bonus, though the latter is given at the company’s discretion.

Who is Entitled to It?

Normally, rank-and-file and non-managerial employees can receive the 13th month pay. For executive or managerial positions, it’s up to the company.

Employees working on a commission basis or task basis (like independent contractors) may be exempted.

When is It Given?

In some cases, companies have two payouts: one in May or June and another in November or December.

Some businesses choose to release the first half of the 13th month pay in May or June so that workers can finance their children’s education. (The beginning of the new school year in the Philippines starts in June.)

The second one in either November or December is critical because Filipinos love celebrating Christmas.

It has been the country’s long-standing tradition to celebrate the holidays even as early as September.?

Generally, the 13th month pay should be given no later than December 25 of each year.

Why Should You Give Your Filipino Remote Workers 13th Month Pay?

Aside from the 13th month pay being mandatory, it is also of immense help to any employee.

As previously mentioned, clients can choose to not pay their independent contractors this. However, why should remote workers be exempted?

If you are an SME owner, this is a great opportunity to show appreciation towards your employees.

Overall, the 13th month pay is one approach to recognise your staff for all their hard work.

More than money, the idea of the 13th month pay is a form of gift-giving. It enables diligent Filipino remote workers to enjoy the fruits of their labour at the end of each year.

Somehow, it can be your way of paying things forward.

On that note, if you are a UK-based entrepreneur in need of talented and hardworking Filipino remote workers, Remote Staff can help you!?

After over 15 years in the industry, Remote Staff has garnered?an extensive pool of candidates ?and developed its own monitoring software. Curious??Call ?or schedule a callback today.