What is the 13th Month Pay? – Practical Advice

Welcome to another entry for the Practical Advice series. This is a series of tips and advice sharing what I know about outsourcing, particularly, outsourcing to the Philippines. 

The 13th Month Pay is something you hear often when planning to hire from the Philippines. What is it, exactly?

13th Month Pay-month pay is a benefit paid to employees in the Philippines each year. In Philippine labor laws, full-time employees  are entitled to receive an additional payment equivalent to one-twelfth of the employee’s basic salary for the relevant calendar year.

Yes, it’s a required benefit if you have a business in the Philippines. How about when you don’t have a business but you do have employees, are you still required to pay it?

That’s what I’m going to discuss in this video. I’m going to answer these questions:

  • Should you pay the 13th Month Pay?
  • When should you pay it?
  • Who should receive it?
  • How much is it?
  • Can you not pay it at all?

This video should clear things out about the 13th Month Pay for you.

This practical advice is one of many. Head on to our outsourcing education page to catch the whole series. You can also subscribe to our blog to be notified when new videos are published. Lastly, remember to subscribe to our YouTube channel too, we’ll be releasing new videos every 1st and 3rd Tuesday of the month.

This is also one of the things I cover in my new book, The Outsourcing Lever. It’s about how I have done outsourcing over the years. Get more information here.

And if you want to know about how real life business owners outsource to the Philippines, check out their reviews of Onlinejobs.ph. 

You can also check out How To Get A Referral To A Great VA In The Philippines and on how to get started on hiring Rockstar Virtual Assistants.

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About John Jonas

John Jonas is a long-time outsourcing expert and the creator of OnlineJobs.ph.

Since 2005, John has taught hundreds of thousands of entrepreneurs how to profitably delegate to VAs in the Philippines (and get their lives back in the process).

With help from his own VAs based in the Philippines, John has created an outsourcing empire that allows him to work 17 hours/week and to spend most of his time with his wife and 5 kids.

Find John at JohnJonas.com and Facebook.

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  1. DH says

    John – Great video.

    question …. further to paying the 13th month bonus in relation to when they were hired.

    My Filipino VA started in June. essentially 1/2 the year. I paid 1/2 of a month’s salary for the 13th month bonus. I didn’t really know about this until just recently and only saw this video now.

    would you pay the other half or let it be?


    • says

      Hi Derek,

      Thank you for your comment.

      If your worker started on June 2020, you can start from there. Since the calculation is (monthly basic salary x months rendered) / 12 months
      Example: 12,000 x 6 months (Jun 2020 to Dec 2020) / 12 months = 6,000 [13th month]

      Hope this helps

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