Lessons Learned In Business

Have a Philippines VA? It’s Time To Pay The 13th Month.

13th month
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If you have Virtual Assistants (VA’s) from the Philippines, it’s time to pay back to your contractors.

It is customary for employees in the Philippines to receive something called the 13th Month. Basically, it’s a Christmas bonus equal to a full months pay. You can read some FAQ’s about it here.  The Philippine government stresses that it is mandatory for all private businesses in the Philippines to make the extra month payment in December for all “rank and file” employees. Just like we have labor laws in the United States, this is one of their labor laws.

Your VA’s are contractors, which means you are not REQUIRED to pay it. However, I believe it is crucial to keep with their customs and pay them a 13th month bonus as if they were a Philippine employee. It keeps them happy, and makes them feel like they are invested in your company and success.  Nothing makes a Philippine VA happier than letting them know they will receive a 13th Month payment!

If you have only employed the contractor for a portion of the year, it is best to give them a prorated 13th month. Calculate the number of months they have worked (assume they work through December) and divide by 12. Then, multiply it by their standard monthly rate. For example, if they started August 5, I calculate they worked 5 months (August – December). 5 / 12 = 0.4167. If their monthly rate is 15,000 PHP, you multiply 15,000 x 0.4167 = 6,250 PHP.

I’ve put together a quick little chart to help you with this.  Figure out how many months they’ve worked this year, look it up in the chart, and multiply their monthly salary by the multiplier in the chart.

13th month multiplier

Your VA worked for 3 months with you and your monthly salary is $400 USD?  Look in the chart, and see the multiplier is 0.2500.  Multiply $400 x 0.2500 = $100. Simple enough!

The payment should be made before December 24th.  If you want to make your VA’s incredibly happy, make the payment as early in December as possible so they can do their Christmas shopping nice and early!

Also, don’t forget there are a few days in the months of December/January that are considered Holiday’s in the Philippines, and they normally should take the day off:

  • December 25 (Christmas Day)
  • December 30 (Rizal Day)
  • December 31 (last day of the year)
  • January 1 (New Years Day)

Take care of your VA’s, and they will take care of you.  Make them feel like they are part of the family!

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Chris Potter

Chris Potter is an internet entrepreneur that loves working on businesses and helping others with their businesses. He has operated businesses that have sold over $25 million in retail sales, bought and sold a blog design business, and started websites from scratch. Skyrocket your business by joining his Mentoring Program!

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