13th Month Pay Calculator
Compute your mandatory 13th month pay under PD 851.
13th Month Pay in the Philippines: Everything You Need to Know
The 13th Month Pay is a mandatory cash benefit under Presidential Decree No. 851, signed by President Ferdinand Marcos on December 16, 1975. It requires all private sector employers to pay their rank-and-file employees a 13th month bonus equivalent to at least one-twelfth (1/12) of their total basic salary earned within a calendar year. This makes the Philippines one of the few countries in the world with a legally mandated 13th month pay.
The 13th Month Pay Formula
If an employee worked the full 12 months: 13th Month Pay = Monthly Basic Salary. If they worked only part of the year (e.g., hired in March), it is prorated: only the months actually worked are counted.
Who Is Entitled to 13th Month Pay?
All rank-and-file employees in the private sector who have worked for at least one (1) month during the calendar year are entitled to 13th month pay — regardless of their employment status (regular, probationary, contractual, or piece-rate).
Not covered by PD 851:
- Government employees (covered by separate CSC rules)
- Managerial employees who are vested with managerial powers
- Employers already paying an equivalent or higher bonus
- Household helpers (kasambahay) — covered separately under RA 10361
- Employees paid on commission-only basis (unless base salary is fixed)
What Counts as "Basic Salary" for 13th Month?
Only basic salary is included in the computation — not allowances, overtime pay, holiday pay, premium pay, night shift differential, or other monetary benefits. Specifically:
| Included in Basic Salary | NOT Included (Excluded) |
|---|---|
| Monthly basic wage | Cost of living allowances (COLA) |
| Daily rate × working days | Overtime pay |
| Piece-rate earnings | Holiday premium pay |
| Night shift differential | |
| Transportation and meal allowances | |
| Profit-sharing payments |
When Must 13th Month Pay Be Released?
By law, the 13th month pay must be paid on or before December 24 of each year. Employers may pay it in two installments: half before the opening of the regular school year (June) and the remaining half before December 24. Failure to pay is a labor violation reportable to DOLE.
Is 13th Month Pay Taxable?
Under the TRAIN Law (RA 10963), the 13th month pay and other bonuses are exempt from income tax up to ₱90,000 per year. This means if your 13th month pay plus all other bonuses/incentives for the year do not exceed ₱90,000, you pay zero income tax on it. Only the amount above ₱90,000 is added to your taxable income.
Frequently Asked Questions — 13th Month Pay Philippines
I resigned before December. Am I still entitled to 13th month pay?
Yes. Resigned or separated employees are still entitled to their prorated 13th month pay for the months they worked. If you resigned in September after working 9 months, you are entitled to 9/12 of your monthly basic salary. Your employer must release this within a reasonable period from your separation date. Withholding it is a labor law violation.
What is the difference between 13th month pay and Christmas bonus?
The 13th month pay is legally mandated under PD 851 — your employer has no choice but to pay it. A Christmas bonus is an additional, voluntary benefit that some employers give on top of the 13th month pay. It is not required by law unless it has become a company practice for 3 or more consecutive years (in which case it may become a company policy). Many companies merge both into a single payment before Christmas.
My employer gives a mid-year bonus. Does that count as 13th month pay?
It depends on the company's policy. If the mid-year bonus is explicitly labeled as "advance 13th month pay" and is credited against the year-end 13th month pay computation, it can count. However, if it is given as a separate bonus unrelated to PD 851, the employer must still pay the full 13th month pay at year-end. Always get written clarification from your HR department.
How does 13th month pay work for employees on maternity leave?
Under DOLE guidelines, periods when an employee is on maternity leave (or other legally mandated leaves) should be counted as months worked for 13th month pay purposes. The SSS maternity benefit should not be deducted from the basic salary count. This means your 13th month pay should not be reduced because you took maternity leave.