What is 13th-month pay that people are talking about?
In the Philippines, locally hired employees are given one additional month’s worth of salary that employers pay and release on or before the 24th of December. It is a form of bonus or incentive mandated under the prevailing labor laws of the Philippines.
Are you obliged to give out 13th-month pay to your staff that you hire on VirtualStaff.ph?
The answer is NO.
When you hire staff on VirtualStaff.ph, whether part-time or full-time, they are not deemed an “employee” under the labor code laws of the employee/employer relationship.
Why is it not an employee/employer relationship in the legal sense of the word?
This is because you are not a Philippine-based employer or a Philippine company. As long as you’re an employer outside of the Philippines, you will have NO LEGAL RESPONSIBILITY under the labor code laws.
This means you won’t be responsible for employee taxes, maternity pay, the 13th month, or any other such thing.
The worker/staff will be the one who is responsible for filing their tax and handling their local compliance. They are classified as “independent contractors” by the Philippine tax authorities from a legal sense.
To be 100% clear on the 13th month
You are not obliged under Philippine laws to pay this incentive if you’re an employer/business not based in the Philippines. However, your staff would appreciate it if you offered to pay this, or a similar type of Christmas bonus that you feel is right.
This decision, of course, is entirely up to you. If you want to pay this, click “Pay Bonus” inside your employer dashboard and pay the staff the bonus from within the VirtualStaff.ph platform.
Generally, you’d pay the equivalent of what you pay your staff monthly. E.g., if you pay a $4.00 per hour salary ($160 per week) and your staff works 160 hours per month. Do 160 x $4.00.
Create your own Christmas bonus and keep it simple?
Instead of “13th month”, offer your staff a Christmas bonus that you feel is fair and just. We guarantee that your staff will greatly appreciate this, and it will help cement a tremendous long-term working relationship.