Employees paid on commission basis.
Employees paid on a purely commission basis are not entitled to 13th month pay. They are expressly excluded from the coverage of PD 851. However, employees paid on partly commission basis, i.e., those guaranteed with a fixed wage aside from the commission, are entitled to 13th month pay.
Computation. In the computation of the basic salary of employees paid partly on commission basis, we must distinguish between the two types of commission:
Commission as an incentives or encouragement to ensure productivity, i.e., productivity bonus; and
Commission as a direct remuneration for service rendered.
Commission that take the form of an incentives or encouragement to ensure productivity, e.g., productivity bonus, does not form part of the basic salary. As such, it may be excluded from the computation of 13th month pay. Only the fixed or guaranteed wage is required to be included in the computation (see Boie Takeka case, 1993.)
Basic salary = Fixed wage (commission is excluded)
On the other hand, commission that takes the form of a direct remuneration for services rendered should be included in the computation of the basic salary. That is, it should be added to the guaranteed wage of the employee in computing his “basic salary” (see Philippine Duplicators v. NLRC, 1993.)
Basic salary = Fixed wage + Commission