With the removal of the salary ceiling, all rank and file employees become entitled to a 13th month pay regardless of the amount of their monthly basic salary (unless their employers are exempted from the application of PD 851).
Managerial employees are excluded from the coverage of the law.
Only basic salary is included in the computation of 13th month pay.
Allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night differential and holiday pay, and cost-of-living allowances, shall be excluded from the computation.
The payment may be demanded by the employee upon the cessation of employment.