How To Calculate The 13th Month Payment In The Philippines

In the Philippines, there is a law that says Filipino employers must pay their employees a bonus that is equal to one month's salary. This law is called the 13th Month Pay Law.

This law only pertains to businesses that operate in the Philippines, so technically, you don't have to worry about it if you're just hiring a virtual assistant (and you live outside the Philippines).

However, I highly highly recommend that you pay your virtual assistant this yearly bonus. Here's why:

1. It's the right thing to do... The 13th Month Pay Law has been around since the 1970's, so Filipinos have come to expect it and they plan around receiving it. According to my virtual assistants, they use this bonus money to buy Christmas gifts for their family and to pay end-of-year bills. (Since they buy Christmas gifts with this money, I recommend sending the 13th month pay in early December... you're VA will surely appreciate it).
2. It's a great way to build loyalty and show your VA that you care about them... and that extra loyalty typically results in your VA working harder for you and sticking around longer.
3. You'll be able to attract more applicants and better applicants for your job if you mention in your job description that you honor the 13th Month Law.

Now that we know what the 13th Month Pay Law is, let's talk about how to calculate it.

If your VA has worked for you for an entire year, you simply send them a bonus equal to one month's salary (in addition to their standard December payment).

If you hired your VA in the middle of the year, things get a little more tricky because you actually prorate the bonus payment. So if you hired your virtual assistant at the beginning of July, you would only have to pay a bonus for the 6 months they worked.

Assuming you pay them $400 per month, you would multiply $400 by 6 (months) and then divide that number by 12.

So $400 x 6 = $2,400 ...
$2,400 / 12 = $200 Bonus Payment

Pretty simple right?

As you can see, the bonus payment isn't a lot of money, but it makes a huge difference for your virtual assistant... which is why I consider the 13th month payment to be mandatory for anybody that has Filipino virtual assistants.

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