Department of Labor and Employment(DOLE)

Dear Sir/ Maam JY,

Thank you for your request dated January 3, 2025 under Executive Order No. 2 (s. 2016) on Freedom of Information (FOI) in the Executive Branch if employers are allowed to increase deductions from an employee’s monthly gross salary as early as January in anticipation of the 13th month pay in December and the claim that such deductions force the employee to bear the brunt of inflation.

The 13th month pay is a mandatory benefit protected by law, P.D. No. 851, and should not be subject to deduction from salary. Deductions are only allowed for government mandated contributions such as SSS, PhilHealth and Pag-IBIG or taxes. Other deduction like loans or court ordered payments require explicit written authorization from the employee.

Otherwise said, the 13th month pay is not to be deducted from an employee’s salary which will be given on December at a given calendar year. The funds for the 13th month pay of the employees are the sole obligation of the employer, and cannot be passed on to the employees by way of salary deduction.

Thank you, and we hope this clarifies your concerns.

Respectfully,

FOI Officer

Department of Labor and Employment