13th Month Pay Computation in Final Pay
Overview
This article explains how the system computes 13th Month Pay when included in an employee's Final Pay — particularly in cases where the employee started late in the prior calendar year and was not included in the previous year's 13th month payout.
Frequently Asked Question
Q: Should the prorated 13th Month Pay for the prior year be included in the system-generated Final Pay computation?
A: No. The system only auto-computes 13th Month Pay for the current calendar year. Any prior year prorated amount must be added manually as a one-time adjustment.
How the System Computes 13th Month Pay in Final Pay
The system automatically computes 13th Month Pay for employees who have rendered at least one (1) month of service within the current calendar year.
The system-generated amount covers the period from January of the current year up to the employee's last day of service.
Example: Employee started on December 10, 2025, and was not included in the 2025 13th month payout. When this employee's Final Pay is processed in 2026, the system will only auto-compute the 13th Month Pay covering January 2026 up to the last day of employment. The prorated amount for December 2025 will NOT be auto-included.
Scenario Breakdown
|
Period |
Covered by System Auto-Computation? |
|---|---|
|
January 2026 – April 30, 2026 Last Day of Employment |
✅ Yes – automatically computed |
|
December 10, 2025 – December 31, 2025 |
❌ No – must be added manually |
How to Include the Prior Year's Prorated 13th Month Pay
If the prior year's prorated 13th Month Pay needs to be included in the Final Pay run, it must be added manually using the One-Time Adjustment feature.
Steps:
- Calculate the prorated 13th Month Pay for the applicable prior year period.
- Go to the employee's Final Pay run.
- Add the computed amount as a One-Time Adjustment.
- Refer to the guide: How to Set Up a One-Time Adjustment for a Specific Employee
Important Notes
- The system's 13th Month Pay auto-computation is limited to the current calendar year only.
- Prior year prorated amounts are not automatically carried over to the Final Pay.
- Always verify the employee's start date and last day to ensure the computation period is accurate.
- If a breakdown of the system-generated 13th Month Pay is needed, this can be provided upon request (note: files will be encrypted and the password sent via a separate communication).
Related Resources:
- How to Set Up a One-Time Adjustment for a Specific Employee
- Are All Rank-and-File Employees Eligible for 13th-Month Pay?
Need Further Assistance?
For additional questions or clarifications on Final Pay computations, explore Sidekick, your 24/7 guide for real-time product inquiries.