Commission vs. 13th Month Pay
WHAT IS THE DIFFERENCE BETWEEN COMMISSION AND 13TH MONTH PAY?
In order to be considered part of 13th month pay, the commission should be part of the basic salary of the employee.
However, whether or not a commission forms part of the basic salary depends upon the circumstances or conditions for its payment which indubitably are factual in nature for they will require a re-examination and calibration of the evidence on record.
If the commission paid in addition to the basic salary is in the nature of a productivity bonus or profit-sharing benefit which is dependent on and generally tied to the productivity or capacity for revenue production of a company, it should not be considered as part of basic salary.
But if the commission paid in addition to the basic salary has a clear direct or necessary relation to the amount of work actually done by the employee, it should be considered as part of basic salary.
If the employee is paid on commission basis only, he is excluded from receiving the 13th month pay benefit.
In order to be considered part of 13th month pay, the commission should be part of the basic salary of the employee.
However, whether or not a commission forms part of the basic salary depends upon the circumstances or conditions for its payment which indubitably are factual in nature for they will require a re-examination and calibration of the evidence on record.
If the commission paid in addition to the basic salary is in the nature of a productivity bonus or profit-sharing benefit which is dependent on and generally tied to the productivity or capacity for revenue production of a company, it should not be considered as part of basic salary.
But if the commission paid in addition to the basic salary has a clear direct or necessary relation to the amount of work actually done by the employee, it should be considered as part of basic salary.
If the employee is paid on commission basis only, he is excluded from receiving the 13th month pay benefit.
