Special Payroll Runs

This guide covers non-regular payroll computations in TalinoHR: 13th month pay, year-end annualization, final pay for separated employees, and leave monetization.

13th Month Pay

Navigate to Payroll → 13th Month (/payroll/thirteenth-month).

Legal Basis

Presidential Decree No. 851 requires all employers to pay 13th month pay to rank-and-file employees who have worked for at least one month during the calendar year.

Computation Formula

13th Month Pay = Total Basic Salary Earned During the Year / 12

The "total basic salary" includes:

• Regular basic pay from all REGULAR payroll runs during the year
• Does NOT include overtime, holiday premiums, night differential, allowances, or other supplementary pay

Tax Exemption

Under the TRAIN Law, 13th month pay up to P90,000 is tax-exempt. Any amount exceeding P90,000 is subject to withholding tax.

How to Process

1. Navigate to /payroll/thirteenth-month
2. Select the year
3. The system displays each employee's computed 13th month pay with a breakdown of total basic salary earned
4. Review the amounts
5. Click "Generate" to create a payroll run with runType: THIRTEENTH_MONTH

Double-Payment Prevention

The system checks for existing 13th month PayrollItem records per employee (not just per PayrollRun) to prevent paying an employee twice for the same year.

Timing

13th month pay is typically released on or before December 24. Some companies split it: 50% in May/June and 50% in November/December.

Year-End Annualization

Navigate to Payroll → Annualization (/payroll/annualization).

What is Annualization?

Year-end annualization reconciles the total withholding tax deducted throughout the year against the actual annual tax liability under the TRAIN Law. The result is either:

• Positive amount (collection) - Employee was under-withheld; additional tax is collected
• Negative amount (refund) - Employee was over-withheld; excess tax is refunded

TRAIN Law Tax Brackets

The annualization uses the current TRAIN Law brackets:

Annual Taxable Income	Tax Rate
Up to P250,000	0%
P250,001 - P400,000	15% of excess over P250,000
P400,001 - P800,000	P22,500 + 20% of excess over P400,000
P800,001 - P2,000,000	P102,500 + 25% of excess over P800,000
P2,000,001 - P8,000,000	P402,500 + 30% of excess over P2,000,000
Over P8,000,000	P2,202,500 + 35% of excess over P8,000,000

Computation Process

1. Aggregate total gross pay from all REGULAR + THIRTEENTH_MONTH payroll runs for the year
2. Subtract total government contributions (SSS, PhilHealth, Pag-IBIG) for the year
3. Apply the TRAIN Law brackets to compute annual tax due
4. Subtract total withholding tax already deducted during the year
5. The difference is the annualization adjustment (positive = collection, negative = refund)

How to Process

1. Navigate to /payroll/annualization
2. Select the year
3. Review each employee's annual summary and computed adjustment
4. Click "Generate" to create a payroll run with runType: ANNUALIZATION

BIR 2316

The annualization feeds into the BIR 2316 annual report, which aggregates data from REGULAR, THIRTEENTH_MONTH, and ANNUALIZATION payroll runs. Generate the BIR 2316 from Payroll → Government (/payroll/government).

Final Pay

Navigate to Payroll → Final Pay (/payroll/final-pay).

What is Final Pay?

Final pay is the total compensation owed to an employee who has separated from the company (resigned, terminated, or retired). DOLE requires release within 30 days of separation.

Components of Final Pay

Component	Description
Remaining Salary	Pay for days worked from last payroll period end to separation date
Pro-rated 13th Month	(Total basic salary YTD / 12) minus any 13th month already paid
Leave Monetization	Cash conversion of unused convertible leave balances
Loan Deductions	Outstanding balance of all active loans (deducted from final pay)

How to Process

1. Navigate to /payroll/final-pay
2. Select the separated employee from the dropdown (only shows employees with status RESIGNED, TERMINATED, or RETIRED)
3. The system computes a preview showing each component
4. Review the breakdown
5. Click "Generate" to create a payroll run with runType: FINAL_PAY

Period Start Calculation

The final pay period starts from the day after the last regular payroll period end for that employee. This prevents overlap with regular payroll runs already processed.

Clearance Requirement

Final pay should only be released after the employee has completed the clearance process. Check the clearance status on the employee's personnel action record.

Leave Monetization

Navigate to Payroll → Leave Monetization (/payroll/leave-monetization).

What is Leave Monetization?

Leave monetization converts unused leave credits to cash. Only leave types configured as "convertible" (e.g., Vacation Leave with isConvertible: true) are eligible.

Computation

Monetized Amount = Unused Convertible Leave Days x Daily Rate

The daily rate is computed based on the employee's pay basis and work schedule, consistent with the payroll engine's computeDailyRate function.

How to Process

1. Navigate to /payroll/leave-monetization
2. Select the year
3. The system displays each employee's convertible leave balance and computed monetization amount
4. Review the breakdown
5. Click "Generate" to create a payroll run with runType: LEAVE_MONETIZATION

When to Use

Leave monetization is typically processed:

• At year-end for unused convertible leave balances
• As part of final pay for separated employees (automatically included in final pay computation)
• Mid-year if company policy allows periodic monetization

Government Compliance Reports

Navigate to Payroll → Government (/payroll/government) for these reports:

BIR Alphalist (1604-CF)

Annual report listing all employees with their total compensation and tax withheld. Export as CSV for filing with the Bureau of Internal Revenue.

• API: /api/reports/government/bir-alphalist?year=YYYY&format=csv

Remittance Summary

Monthly summary of government contributions for filing remittances:

• SSS - Employee and employer shares
• PhilHealth - Employee and employer shares
• Pag-IBIG - Employee and employer shares

API: /api/reports/government/remittance-summary?year=YYYY&month=MM

BIR 2316

Annual employee tax report aggregating REGULAR, THIRTEENTH_MONTH, and ANNUALIZATION payroll data.

• API: /api/reports/government/bir-2316?year=YYYY

Run Type Summary

Run Type	Purpose	Nav Path
REGULAR	Standard pay period payroll	/payroll
THIRTEENTH_MONTH	Annual 13th month pay (PD 851)	/payroll/thirteenth-month
ANNUALIZATION	Year-end tax reconciliation (TRAIN Law)	/payroll/annualization
LEAVE_MONETIZATION	Cash conversion of unused leave	/payroll/leave-monetization
FINAL_PAY	Separation pay for exiting employees	/payroll/final-pay

Each special run type is isolated from regular payroll aggregations to prevent double-counting in reports and computations.