Year-End Bonus Rules for Gov't Employees

Legal basis and predecessor repealed

The Circular implements Republic Act No. 6686, which authorizes the grant of annual Christmas Bonus equivalent to one (1) month basic salary and an additional Cash Gift of PHP 1,000.00.
National Compensation Circular No. 63 dated October 17, 1990 is hereby repealed.

Policy purpose and maximum limits

The Circular prescribes rules for granting annual Christmas bonus and cash gift to national government officials and employees in recognition of dedication to government service and in keeping with the spirit of Christmas (Purpose).
The amount authorized under this Circular is the maximum amount for year-end benefits (Rules and Regulations).
Payment of year-end benefits other than those authorized under this Circular constitutes illegal disbursement of public funds (Rules and Regulations).

Definitions used for computation

The year-end bonus and cash gift granted under the Circular are referred to as year-end benefits or Christmas bonus (Section 4.1).
Monthly basic salary includes the transition allowance, if any (Section 4.2).
Computation of year-end benefits is based on the employee’s actual basic monthly salary/daily wage/contractual rate as of October 31, excluding allowances, hazard pay, and other forms of compensation usually paid in addition to basic salary (Section 4.7).

Coverage and entitlement rules

The Circular covers all National Government officials and employees whether regular, temporary, casual, or contractual; and whether full-time or part-time, who meet the required service and are still in service as of October 31 (Section 2.1).
Covered employment includes government service in GOCCs/GFIs, national and local government agency/office, and SUCs, for purposes of the service requirement (Section 2.1).
Qualification requires at least a total of four (4) months of service from January 1 to October 31, including leaves of absence with pay, and continued service as of October 31 (Section 2.1).
National Government officials and employees with less than four (4) months of service from January 1 to October 31, but employed as of October 31, are entitled solely to Cash Gift pro-rated as follows (Section 2.2):
- 3 months but less than 4 months: PHP 400.00
- 2 months but less than 3 months: PHP 300.00
- 1 month but less than 2 months: PHP 200.00
- Less than 1 month: PHP 100.00
An official or employee on full-time or part-time detail with another government office/agency or special project receives year-end benefits from the mother agency; for personnel paid from project funds, benefits are drawn from the same source where salary is drawn (Section 4.3).
No person may receive year-end benefits from more than one source; committee or project honoraria are not considered in computing the benefits (Section 4.3).
Part-time employees receive year-end benefits corresponding to the basic salary actually receiving and a pro-rata share of PHP 1,000.00; where part-time service is to two (2) different agencies (with one agency equivalent to one-half day service), the employee may claim in each agency but total benefits must not exceed the equivalent of one month basic salary and PHP 1,000.00 (Section 4.4).
Officials and employees already receiving Christmas or year-end bonus or its equivalent receive only the amount necessary to bring the total to the level provided under the Circular (Section 4.5).
Officials and employees on approved leave of absence without pay are entitled to year-end benefits if they rendered a total of four (4) months service, excluding leave without pay, within the period January 1 to October 31 (Section 4.6).

Exemptions and disqualifications

An official or employee under preventive suspension without pay is not entitled to the benefits; upon exoneration, the employee is entitled to the same (Section 3.1).
An official or employee AWOL as of October 31 is not entitled to the benefits granted under the Circular (Section 3.2).
An official or employee who has four (4) months or more of government service in a particular year but is no longer in the service as of October 31 due to retirement, resignation, separation, or for any other reasons is not entitled to the year-end benefits (Section 3.3).

Substantive benefit rules and computation

Year-end benefits consist of the Christmas bonus equivalent to one (1) month basic salary and an additional Cash Gift of PHP 1,000.00 authorized for the covered employees (Purpose, implementing Republic Act No. 6686).
Computation uses actual basic monthly salary/daily wage/contractual rate as of October 31 and excludes allowances, hazard pay, and other compensation usually paid in addition to basic salary (Section 4.7).
For employees who transferred from one agency to another, the year-end benefits are paid by the new office based on total government service as of October 31, regardless of whether the service was in national, local, SUCs, or GOCCs/GFIs (Section 4.8).
Year-end benefits are subject to withholding tax but are not subject to GSIS, Medicare and other similar deductions (Section 4.9).
The Circular’s authorized year-end benefits are paid subject to the usual accounting and auditing rules and regulations (Section 4.10).

Funding and release of funds

For National Government positions charged against the General Fund, funding is sourced from appropriations provided for the purpose under the General Appropriations Act (Section 5.1).
Any deficiency for General Fund positions is charged against savings in the agency appropriations; any further deficiency is charged against overall savings of the government pursuant to economy measures prescribed during the year (Section 5.1).
For officials and employees of GOCCs and GFIs with original charters, year-end benefits are charged against corporate funds available for the purpose, without additional National Government funding support (Section 5.2).
For National Government positions, the release of necessary Advice of Allotment and corresponding Notice of Cash Allocation (NCA) is made by the DBM starting October of each year for agency plantilla of personnel validated/certified through the DBM by the Compensation and Position Classification Bureau (CPCB) (Section 6.1).
Adjustments in case of DBM-authorized changes in plantilla are made only upon submission by the agency of such changes (Section 6.1).
For the Cash Gift, each agency must immediately submit a request for funding to the DBM using Annex A, which becomes the basis for releasing funds for the current year’s benefit (Section 6.2).
Agencies may use cash available from their Common Fund to pay year-end benefits immediately while awaiting DBM funds (Section 6.3).

Implementation reporting and agency liability

Each department/bureau/regional office/agency (including GOCCs/GFIs) must submit to the National Accounting and Finance Bureau of the DBM a certified statement of actual payments of the year-end benefits not later than January 15 of each year.
The statement must be verified and certified by the Auditor concerned (Section 7).
The head of the concerned department, bureau, office, regional office, agency, or other National Government entity (including GOCCs/GFIs) is held personally liable for any payment of year-end benefits not in accordance with the Circular (Section 8).
The employee remains liable to refund any invalid payment received by him, without prejudice to the head of agency’s liability (Section 8).

Administrative direction for unresolved cases

Cases not covered by the Circular, including provisions requiring further clarification prior to implementation, are referred to the Department of Budget and Management for resolution (Section 9).