When must the 13th month pay be computed and given to employees?

The requirement to compute and award the 13th month pay to employees by December 24 each year is based on labor laws that govern employee compensation in various regions, particularly in countries such as the Philippines where this practice is legally mandated. This payment is essentially an additional month’s salary that is typically allocated to employees as a bonus for their service during the year.

Providing this pay by December 24 aligns with the holiday season, making it a customary period for employees to receive this financial benefit. It serves both as a reward for their hard work and a support during the festive period, thus reinforcing employee satisfaction and morale.

In contrast, other timing options such as the end of the fiscal year, the end of an employment contract, or an employee’s work anniversary do not align with the specific legal requirements and traditions surrounding the 13th month pay, which is tied explicitly to the end of the calendar year. This understanding is crucial for HR professionals as they ensure compliance with labor laws and maintain positive employee relations.