Compute 13th month pay for a tax year
Payroll, then Special Runs, calculates 13th month pay per employee from months worked and total basic salary, shows the non-taxable and taxable parts, and generates the payroll run.
Steps
- Open Payroll in the sidebar and select Special Runs. The page is titled Special Payroll Runs.
- Choose the Tax Year.
- Select Calculate. The table lists each employee with Months Worked, Total Basic Salary, 13th Month Pay, Non-Taxable and Taxable Excess.
- Check the figures. Look closely at employees who joined or left during the year.
- Select Generate Payroll Run to create the run.
The rule behind the numbers
13th month pay is total basic salary earned in the calendar year divided by 12, and it is due on or before December 24. See the 13th month pay guide and the 13th month pay glossary entry.
Questions people ask
What does the calculation show for each employee?
Months worked, total basic salary, 13th month pay, the non-taxable part and the taxable excess.