Group 5

12ABM6
Performance Task In Business Mathematics
Mrs. Veronica Rejuso
 13 th Month Pay

 is paid to employees according to different terms of
law or contract of employment. Mostly, it is
equivalent to one full monthly salary and paid in
December (the 12th month) around Christmas and is
traditionally called a Christmas bonus.
 A. Who are required to pay the
13th month pay?

 Under Presidential Decree No. 851, employers from
the private sector in the Philippines are required to
pay their rank-and-file employees a Thirteenth 13th
Month Pay not later than December 24 every year.
The 13th month pay is equivalent to one twelfth
(1/12) of an employee’s basic annual salary.
 B. What are the components of
"basic salary"?

 CTC is cost to company and the components are:
-Basic
-Total Variable Incentives
-HRA
-Perks and Benefits
-Conveyance
-Insurance Premiums
-Mobile/Telephone Expense Reimbursement
-Medical Reimbursement
-All allowances
-Leave Travel Allowance (LTA)
-Employer contribution of PF
-Employer Contribution towards ESI
 C. Are maternity leave benefits included in
the computation of the 13th month pay?


 No, maternity leave benefits are not included in the
computation of the 13th month pay.
 D. Is the 13th month pay
taxable?

 Pursuant to Republic Act 10653, the 13th month pay
and other benefits, including productivity incentives
and Christmas bonuses, not exceeding P82,000
provided to both government and private sector
employees are exempted from tax.
 Before RA 10653 was signed into law in February of
2015, only bonuses not exceeding P30,000 were
exempted from tax.
 
 DOF's initial proposal sought to remove this tax
exemption of bonuses, while exempting from income
tax those who are earning P250,000 and below a
year. The P250,000 tax-exempt income was supposed
to cover the P82,000 13th month pay exemption, the
P50,000 personal exemption, and the P25,000
deduction for each dependent of taxpayer
(maximum of four dependents).
 Now, under the revised proposal, those earning up
to P332,000 (P250,000 income plus P82,000 13th
month pay and other bonuses) will be tax exempt.
 
 If such tax scheme is enacted, 4.7 million or 83
percent of taxpayers will be exempted from income
tax, leaving 954,000 workers paying lower income
taxes. On the other hand, the "ultra rich," who
comprise 0.1 percent of taxpayers, will be taxed at a
higher rate of 35 percent.
 At present, 1.8 million workers, who are minimum
wage earners, are exempted from tax.
 E. Are resigned and separated employees
entitled to the 13th month pay?

 Yes. According to the labor code an employee who
has resigned or whose services were terminated
before the time for payment of the 13th month pay
us entitled to this benefit. in proportion to the length
of time he worked during the year, reckoned from
the time he started working during the calendar year
up to the time of his resignation or termination from
the service.
 
 Thus, if he worked only from January up to
September his proportionate 13th month pay should
be equivalent of 1/12 his total basic salary he earned
during that period. The payment of the 13th month
pay may be demanded by the employee upon the
cessation of employer-employee relationship. This is
consistent with the principle of equity that as the
employer can require the employee to clear himself
of all liabilities and property accountability, so can
the employee demand the payment of all benefits
due him upon the termination of the relationship.
 Examples

 Compute the 13th month pay of an employee who
receives P 10,000 basic salary per month.
 Solution:
 . P10,000 X 12
12
 =P10,000
 
 If an employee, who receives 10,000 basic salary per
month, resigns at the end of September and has
earned a total basic salary amounting to 90,000 for
that period during calendar year, what is his
proportionate 13th month pay?
 Solution:
 P10,000 X 9
12
= P7,500
 
 An employee earns a basic monthly salary of 85,000.
What part of his 13th month pay is taxable?
 Solution:
 P85,000 - P82,000 = P3000
 3000/85000
 = 3.5%
 Members

 Alfonso, Marvin S.
 Combras, Jhane
 Cruz, Mikaela
 dela Cruz, John Carlo O.
 Gegantoca, Mary Jane S.
 Inot, Hannah
 Legaspi, Peter
 Lumboy, Shanon Gabrielle A.
 Mañalac, Mark H.
 Talisay, Trisha Jocel
