Law Summary
Coverage of Year-End Bonus
- Includes all LGU officials and employees (regular, temporary, emergency, casual, contractual) who served at least four months from January 1 to October 31, and are still in service on October 31.
- Pro-rated cash gifts apply to those with less than four months but with a minimum of one month service.
- Barangay chairmen legally created by December 31, 1990, are entitled to a fixed P1,000 cash gift regardless of tenure length.
Exemptions from Year-End Bonus
- Officials or employees under preventive suspension without pay are not entitled but may receive payment if exonerated.
- Those not in service by October 31 due to retirement/resignation/separation are ineligible.
- Employees absent without official leave as of October 31 are disqualified.
Definitions and Rules on Year-End Benefits
- "Year-end benefits" includes both bonus and cash gift, with authorized amounts considered maxima.
- "Basic salary" is defined per R.A. 6758 and related guidelines, including transition allowance.
- Employees on detail to other agencies receive benefits from only one source.
- Part-time employees receive benefits in proportion to their basic salary and a pro-rated cash gift.
- Leaves without pay do not reduce eligibility if total service still meets the four-month requirement.
- Benefits computed on salary as of October 31, excluding allowances and hazard pay.
- Previous government service counts if employee transfers agencies before October 31.
- Benefits are subject to withholding tax but exempt from GSIS, Medicare, and similar contributions.
- All payments are subject to accounting and audit rules.
Payment Adjustments and Priority
- LGUs not yet under the Salary Standardization Law pay based on current approved rates.
- Payment to be adjusted once Salary Standardization Law rates are implemented.
Funding Source and Budgeting
- Year-end benefits charged to respective LGU funds.
- LGUs may realign budgets including NALGU savings; deficits may be recorded as accounts payable with first priority payment in following years.
Responsibilities and Liabilities
- Local Chief Executives are personally liable for irregular payments.
- Employees who receive invalid payments must refund them.
Final Provisions
- Matters requiring clarification or not covered are referred to the Department of Budget and Management.
- Repeals Local Budget Circular No. 49.
- Year-end benefits payments not to be made earlier than November 15 each year.