13th month pay

Sahora computes each employee's 13th month pay from the payrolls of the year and adds it to the payroll you choose. This guide shows how.

How it is computed

• 13th month pay is the basic salary earned in the calendar year divided by twelve, less any 13th month already given.
• Basic salary here is basic pay less unpaid absences and lates. Overtime, premiums, night differential, holiday pay and allowances don't count, unless your company chooses to count them (see below).
• Pay from earlier in the year that is on file from before Sahora counts too.
• It is tax-free up to ₱90,000, counted together with bonuses and other benefits for the year. Anything above that is taxed.
• The date it must be paid by is in your filing calendar (Reports → Filing calendar).

What counts is set by the owner:

• Company setup → Payroll settings → 13th month pay basis adds kinds of pay the company treats as part of the wage.
• A pay item set as Part of the basic salary for 13th month pay (under Allowances and benefits) is counted too. See Allowances, benefits and bonuses.

Compute it and add it to a payroll

1. Open Payroll → 13th month pay.
2. Under Pay it in, choose the open pay period you will pay it in. Sahora suggests the first open December period.
3. Under Count salary up to, choose:
   • December 31 (estimate the rest): salary not yet in an approved payroll is estimated up to the end of the year at the current rate with full attendance. The first payroll of next year settles the difference by itself: paid if short, deducted if overpaid.
   • The end of this period: only approved payrolls and earlier pay on file are counted.
4. Click Show.
5. Check the table: for each employee, the basic salary, the amount divided by twelve, what was Already given and what is left To pay.
6. Click Add to payroll. This adds a one-time "13th month pay" item for each employee in that period.
7. Compute that period's payroll as usual (see Computing a payroll).

If you change something and add it again, the button reads Replace in payroll: it replaces what was added before.

Managerial employees

The law covers rank-and-file employees. Employees ticked as Managerial employee on their record appear under Managerial employees and are not paid unless you choose to. Tick the ones your company chooses to pay, then click Update.

Downloads

• Download this computation and the monthly ledger (Excel) for your files.
• Print (PDF): choose a department, a branch or some employees, then Summary or Detail per employee.

What can go wrong

• "No open payroll period this year." Create the period you will pay it in under Attendance (see Creating pay periods).
• "This period's payroll has been submitted or approved; choose another period to pay it in." Pick an open period whose payroll is still a draft.
• 'The "13th month pay" item is missing from Company setup.' or the item is inactive: reactivate the 13th month pay item under Company setup → Allowances and benefits.

Good to know

• Employees who left before the chosen period get their 13th month pay in their final pay (see When an employee leaves).
• Adding it to a payroll is for Owner / Management and payroll officers.