9 Smart Ways You Can Spend Your 13th Month Pay this Year
Under Presidential Decree 851 also known as the 13th Month Law additional monetary benefit for employees from their employers must be given to enable a better Christmas and New Year celebration to the labor force.
According to www.payrollhero.ph all rank and file employees regardless of their designation or employment status who have rendered at least one month during the calendar year are entitled to a 13th month year. The 13th month pay shall be in the amount not less than 1/12 of the total basic salary earned by the employee within the calendar day.
In 2015 a higher tax exemption for 13th month pay was pushed. Employees whose 13th Month Pay is below 82,000pesos will not be taxed. However if your 13th Month Pay surpassed the 82,000pesos bench mark you need to pay 30% tax.
Basic salary includes the earnings paid by an employer to an employee for services rendered. This does not include allowance, monetary benefits or any amount outside the employee’s regular pay. For example Juan’s basic salary is 21,000pesos with 2,000 transportation and meal allowance. Only the 21,000pesos is considered in the computation of 13th month.
Here’s a sample of computation of 13th month pay based on different employee types:
1. Buy/Spend on your hobby
2. Reward Yourself
3. Take a trip or travel
4. Start a side hustle
Now is the best time to make a business idea come to life. You can use your extra cash to open up an online shop, a homemade goods business or a franchise of your favorite snack or treats. Or maybe you can try a buy and sell business that’s easy to operate. It doesn’t have to be big already. Just start with the money you have and make it grow through hard work and determination.
5. Invest for your future
Open other Mutual Fund or UITF account. I have reviewed a number of mutual fund and UITF you can choose from. Most of these accounts require 5,000pesos to 10,000pesos only as initial investment. Make sure to do your own massive research before investing. CLICK HERE to read my first impression posts on some of the best Mutual Funds and UITF accounts in the country today.
Open a St. Peter Life Plan. Last August I decided to invest in a life plan too just like my parents and I am glad to report to you that I’m done in my first year of paying. I have a detailed post on why I believe St. Peter Life Plan is an investment you can read here. In case you want to know more about St. Peter Life Plan or interested to invest too then send me a quick message at firstname.lastname@example.org I will forward to you the process on how to avail one.
6. Save on your Emergency Fund
You can also read my post on 11 Ways To Build an Emergency Fund from Scratch.
7. Pay-Off your debt
If you suffer from high-interest debts then this can be a good chance for you to finally be debt-free. Go pay debts that have long been giving you stress like credit card or 5/6 and make sure not to engage with debt anymore. You can read below posts on debt-management:
8. Get a Life Insurance
If you want your 13th month to be ultimately useful for your benefit then why not talk to a financial adviser today and get yourself a life insurance.
9. Buy gifts for your parents, family and friends
The essence of Christmas is expressing gratitude to the people around you so what a better way to spend you 13th month pay than buying some presents to them. I remember the Christmas in 2013 when I bought a sofa for our living room. I felt so much joy to be able to provide one for my family. Until today we are still using the sofa.
My eldest sister, on the other hand, bought a 21-inch flat screen TV for us which made everyone in the household happy. I suggest going to Lazada since they have a lot of gadgets and items for sale this season. You’ll definitely find one for each of your family member.
Final Notes from SavingsPinay
How about you? Did you get your 13th Month Pay already? How did you use it? Or How do you plan to spend your extra money?
Izza of SavingsPinay helps Filipinos bridge the financial literacy gap one content at a time by providing insights and tips on budgeting, saving, investing, side hustle and growing your net worth. Aside from this blog she also writes at www.izzaglinofull.com, a beauty and lifestyle blog for frugal Pinays and manages, www.izzagevents.com, a wedding and event business since 2011. For inquiries, topic suggestions or future collaborations email her at email@example.com