How to Add Manually Computed 13th Month Pay via Adjustment Run?

Overview

If your organization uses its own internal policy and prefers to manually compute employees' 13th Month Pay outside the system, you can upload the computed amounts through an Adjustment Run in Payroll.

This method allows you to record and process manually computed 13th Month Pay while ensuring the correct taxable and non-taxable portions are reflected in payroll.

Prerequisites

• The 13th Month Pay has already been computed manually.
• You have Payroll Administrator access.
• You have identified the employees who will receive the 13th Month Pay.

Steps to Add Manually Computed 13th Month Pay

Step 1: Create an Adjustment Payroll Run

1. Navigate to Payroll.
2. Create a new Adjustment Payroll Run.
3. Enter the necessary payroll run details and save.

Step 2: Include Eligible Employees

1. Add all employees who are entitled to receive the 13th Month Pay.
2. Review the employee list to ensure all recipients are included.

Step 3: Add the 13th Month Pay Adjustment

1. Create a one or two One-Time Adjustments for each employee, depending on whether the amount exceeds the non-taxable threshold.
2. Select the appropriate adjustment type:
• 13th Month Pay Non-Taxable
• 13th Month Pay Taxable

Important: The first ₱90,000 of the 13th Month Pay is classified as non-taxable. Any amount exceeding ₱90,000 must be recorded as taxable.

Sample Computation

Scenario:
Employee's computed 13th Month Pay = ₱100,000

Explanation:

• The first ₱90,000 is classified as Non-Taxable.
• The excess ₱10,000 is classified as Taxable.

Best Practices

• Verify your manual computation before uploading the adjustments.
• Ensure the correct adjustment type is selected to avoid tax reporting discrepancies.
• Review the payroll register after processing to confirm that the amounts were posted correctly.

Frequently Asked Questions (FAQ)

Q: Can I upload all employees' 13th Month Pay through an Adjustment Run?
Yes. Simply include all eligible employees in the Adjustment Payroll Run and add the corresponding adjustment amounts.

Q: What happens if the 13th Month Pay exceeds ₱90,000?
Any amount above ₱90,000 should be entered as 13th Month Pay Taxable.

Q: Can I use this process even if the system's automatic 13th Month computation is not used?
Yes. This process is specifically designed for organizations that prefer to use their own manual computation based on internal policies.

If you need help or have questions, feel free to contact our support team.