Guide on the 13th Month Pay Vs. Christmas Bonus Differences
The 13th Month Pay and the Christmas Bonus are usually mistaken for each other but they are extremely different in a lot of things.
Every December in the Philippines, countless Filipinos await for their 13th Month Pay and their Christmas Bonus. A combination of these two (2) extra pays is a huge opportunity for many individuals to finally pay off their debts.
Not everyone receives a 13th Month Pay. Not all employees also get a Christmas Bonus. However, these two (2) extra pays are sometimes mistaken despite their huge differences.
13th Month Pay Is Mandatory, Christmas Bonus Is Not
In the Philippines, the 13th Month Pay is mandatory as per the Presidential Decree No. 851. All employees, regardless of their status, who have worked in the company for at least one (1) month except for government employees and those who are commission-based, are entitled to receive the 13th Month Pay.
With regards to the Christmas Bonus, it is not mandatory. It depends on the willingness of the company or the employers to give their employees a Christmas Bonus. This is usually dependent on the performance of the company for the year.
13th Month Pay Can Be Computed, Christmas Bonus Can’t
While there is a computation in getting the 13th Month Pay which should not fall below 1/12th of the employee’s total basic salary, the amount of the Christmas Bonus is solely a prerogative of the company or the employer.
13th Month Pay, Christmas Bonus Are Both Taxable
The 13th Month Pay in the Philippines is taxable under the Tax Reform for Acceleration and Inclusion (TRAIN) Law if it goes beyond the non-taxable threshold limit of Php 90,000. In the case of the Christmas Bonus, it is only exempted from tax if it is performance-based and does not go beyond Php 10,000.
