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How to Compute Back Pay in the Philippines?

What is back pay and computation of back pay? I have thought really hard before I started writing and just trying to grasp the entire meaning of it. I have been in the BPO industry for quite some time now yet personally, I have never had any major experiences of getting a back pay due to miscalculations for my salary.

This does not mean I have always been paid the exact amount equivalent to the time I’ve rendered for work though. One can find discrepancies with the compensation just about everywhere we work, whether we are in a private firm or in a government entity. According to some business dictionary, back pay is simply defined as any past wages or benefits which may include bonuses, overtime pays, and night differential premiums, to which an employee is entitled to.

Moreover, promotion to a higher position which entails an increase with one’s salary, changes in minimum wages, mistakes committed by the payroll department due to incorrect information forwarded by the team leaders, and confusion over service incentive leaves and holiday schedules can all resort to back pay calculations which can sometimes be a real financial concern in any company.

In its essence, back pay is simply the result of a missed payment or a payment that was intentionally not made. Truly, a back pay is unfortunate yet is necessary. I have heard many of my teammates complain and whine about their pay in the past when they did not get their expected salary for the payout. They would then go to HR and inquire to get things corrected. Once they get the explanation from HR, they would then wait for the next payout to get the computation rectified only to find out that the back pay is not there yet so they find themselves back in the Human Resource office.

Computation of Back Pay in the Philippines can be a real pain. We may need a human resource specialist to discuss how it is computed and as to how long employees need to wait to receive their back pay. Furthermore, Computation of Back Pay in the Philippines is normally computed on a spreadsheet program on a daily, weekly manner, or in any other time cycle appropriate to a given scenario. One can expect several columns and labels all throughout the spreadsheet to make room for several iterations.

Back pay computation may also include or may not include deductions for taxes and for Social Security but can include holidays and overtime and other deductions though. Ideally, when there is a dispute filed on one payout, back pay is expected to be given right after the next payout. However, this does not seem to apply in most centers I know. In the event that there is a discrepancy with the compensation, some employees would surely vent out their frustrations but would never really take the time to file for a claim on their disputes thinking it is not going to be credited back to them or it would take them forever to get it. What they don’t realize is that they are legally entitled for back pay and that they can take legal actions in the event that they are denied of the claim.

In summary, there is no concrete formula for Back Pay computation in the Philippines, as it varies depending on the factors. Some of the factors are:

  • Pro-rated 13th month pay
  • Last Salary – your last salary is normally held and will be release as back pay
  • Unpaid salary due to cut-off – most companies implement 10th and 25th cutoff time for payroll. Assuming you resigned on the 30th, that means your backpay includes 5 days of work.
  • Vacation Leaves & Sick Leaves – depending on company policies, leaves can be converted to cash. By labor code, maximum of 5 leaves should be converted to cash as mandated by law.

Here’s an example calculation of back pay.

Salary: Php 20,000 per month
Date of Resignation: September 1

Taxable Income: Php 16,500

  • Bonus/Incentives: Php 2,000
  • 1 cutoff + 5 days = Php 14,500

Non Taxable income: Php 22, 833.33

  • Pro-rated 13th month pay: Php 13,333.33
  • Rice Allowance: Php 2,500
  • Leave conversion: Php 8,000

Tax due: Php 3,300

Final Net Pay: Php 36,033.33


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  1. joseph lara Reply

    If you are absent due to medical emergency and you are hospitalized and you can prove it by a legit medical certificate can a BPO employer can just terminate your contract just because you are still on probationary period

  2. noel Reply

    hi i wanna know if you have a pag-ibig loan, do they also include it on your backpay? do they have the right to deduct the remaining balance of your loan of pag-ibig or sss?

  3. jen Reply

    hi, just want to ask if the backpay is vatable? coz there is a deduction about 30% of my total backpay..

    • Don Melendez Reply

      Back pays are not taxable supposed to be.

  4. shirley relevo Reply

    hi i was a former teleperformance employee due to my lates coz of the work place far from my place …they given me a chance to attend hearing @hr i ask instead of being terminated i ask to have the chance to properly file resignation immediately…and i also ask if this will affect my back pay our GM`s said no…after 3 months i was about to get my b.pay acct told me that i have 8900pesos but since i sign the automatic deduction for not rendering 30days i don’t get any single peso …w/c i told them tht i don’t remember signing any deduction paper during my exit interview do i have the rights to fight.thanks

    • Ms. V Reply


      I was once a TP agent too. I worked for the company for about a year and I received the prorated 11months of my 13th month pay. I think you were not able to get your backpay as to you might have signed the authorization to deduct form during releasing of your first pay, filing of resignation or during exit interview. As to what I’ve heard, resignation with TP really requires 30days of service rendering and a completely processed clearance.

      You can always email them about your concern at Philippines@teleperformance.com

      Hope this helps!

      Ms. V

  5. Leanne asuncion Reply

    I worked in BPo for more than 4 yrs. I just got my backpay yesterday for only P.6,500. and HR cannot provide me better explanation of it. I resigned last January 2014. Please help me clarify this issue. my basic pay is only P9431, but if the allow. will be included since I am a regular employee that will give me a total of P. 14,000.

  6. cathy Reply

    I was hired may 21, 2012 and terminated due to sickness march13,2014, and has more than 200hours leave credits and 7days single parent leave credits, did not get the 13th month pay last march or january(i guess thats the month) and ITR. 14k is my basic.

  7. Rolly Balladares Reply

    Ako po c rolly balladares,nagtrabaho po ako sa prime cool aircon.corp.nung nag resigned po ako wala po ako nkuha ibamaliban sa last pay KO at yong 250/15days na kaltas sa sahod nmin wala sss, philhealth,lahat po wala,ask KO po kung mahabol kKO pa po ba yun?2years po ako nag work sa company NLA,last Feb. KO nag resigned tapus napilitan po ako bumalik sa company NLA start July 1,

  8. ruby dador Reply

    hi,i worked at Aditya Birla Minacs from aug.2012 until july 2014.i was terminated july 23,2014.i still got my last pay july 30.so i should still have prorated 13month my Vacation and sick leaves and itr included in my back pay,when am i suppose to recive my back pay when i did my clearamce aug.15 2014.some of thw old employees they got their nack pay after 6months,isnt that againts the law?what are my rights in terms of having my bqck pay?

  9. bill garcia Reply

    It has been 4 months of wait and I still dont have my back pay further more Iam not geting a definite reply as to when it is going to be release,I also have a former team mate who has been waiting for 4 months now, how long is the maximum wait? Should there be some legal action that we can make regarding this. I would really appreciate some information. Thank you.

  10. mic garcia Reply

    Hi just want to ask xe ive been with a bpo company for 4 yrs and 5 mos to be exact i resigned due to familt emergency i process my clearance with them only 2 find out ang mku2ha ko lng ay 400.00? Wla ba akong dpat mkuha na pay for the length of service with them? Legal b to?

    • nick Reply

      san bpo ka po nag work?

      • Sam Reply

        I also have the same prob im working at west services

  11. Maricar Reply

    I’ve work for a bpo company for 4 years, only to find out that my back pay is P967.17???, It is a part-time account in that company, but seeing the computation, I believe that they have not included any pro-rated 13th month pay nor the quarterly bonuses, plus any loyalty pay for rendering such service, Is that legal?

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