Philippines 13th Month Pay Calculator 2026
One-twelfth of the basic salary you actually earned this year — prorated if you joined partway through.
Figures last reviewed
Philippines 13th month pay overview
13th month pay is a statutory benefit under Presidential Decree No. 851, not a bonus an employer may choose to withhold. Every rank-and-file employee who has worked at least 1 month in the calendar year is entitled to it, whatever their employment status — probationary, contractual, casual or regular.
The formula is one line: total basic salary earned during the calendar year, divided by 12. Two things about that line cause almost every dispute. It says *earned*, not *contracted* — so someone who joined in July gets roughly half of what a full-year colleague on the same salary gets. And it says *basic salary*, which is a narrower figure than the amount that lands in your account each month.
Tax is where the second surprise lives. 13th month pay is not automatically tax-free. It is excluded from your taxable income only up to ₱90,000 — and that ceiling is shared with every other benefit you receive in the year, so a Christmas bonus eats into the same allowance.
Philippines 13th month pay at a glance
- Legal basis
- PD 851 — mandatory, not discretionary
- Formula
- Basic earned ÷ 12 — calendar year, not anniversary year
- Who qualifies
- Rank-and-file — after 1 month of service, any employment status
- Tax-free ceiling
- ₱90,000 — shared with all other benefits
- Payment deadline
- 24 December — may be paid in two instalments
- Excluded from basic
- OT, allowances — and holiday pay, night differential, unused leave
How Philippines 13th month pay is calculated
Add up the basic salary you actually earned
Only basic pay counts. PD 851 expressly excludes overtime pay, premium pay, holiday pay, night shift differential, cost-of-living allowances, profit-sharing, and the cash value of unused vacation and sick leave. Allowances count only where they have been integrated into your regular salary. Using your total take-home pay instead of basic salary overstates the entitlement, sometimes badly.
Subtract pay lost to unpaid absences
The law measures salary *earned*, so deductions for unpaid absences and tardiness reduce the base. Paid leave you actually took does not — that was earned. This is why a payslip-derived figure is more reliable than multiplying your monthly rate by twelve.
Divide by 12
Always 12, never the number of months you worked. Dividing by months worked is the single most common error and it inflates the answer for anyone who joined mid-year: it would give a July joiner a full month's salary instead of the half they are due.
Check the result against the ₱90,000 ceiling
Your 13th month pay plus any other benefits — Christmas bonus, productivity incentives — are excluded from taxable income up to ₱90,000 in total. Anything above that is added to your taxable compensation and withheld at your usual rate. Most employees never reach the ceiling; anyone on a basic salary above ₱90,000 a month will.
What you actually receive
A full year at ₱30,000 a month
The straightforward case — twelve months of service, no unpaid absences.
| Component | Line | Amount |
|---|---|---|
| Basic salary earned (12 months) | ₱360,000.00 | |
| Divided by 12 | ₱30,000.00 | |
| Taxable portion | ₱0.00 | |
A full year on ₱30,000 a month gives exactly one month's salary — ₱30,000.00 — and none of it is taxable, because it sits well under the ₱90,000 ceiling.
Joining in July on the same ₱30,000 a month
The case people get wrong, because the divisor stays at twelve.
| Component | Line | Amount |
|---|---|---|
| Basic salary earned (6 months) | ₱180,000.00 | |
| Divided by 12 | ₱15,000.00 | |
| If you wrongly divided by 6 | ₱30,000.00 | |
Half a year of service earns ₱15,000.00, not ₱30,000.00. The divisor is always 12 — it does not shrink to match how long you were there.
The same logic applies to anyone who resigned partway through the year: the entitlement is still due, prorated.
A senior salary that crosses the ₱90,000 ceiling
Where 13th month pay stops being entirely tax-free.
| Component | Line | Amount |
|---|---|---|
| Basic salary earned | ₱1,200,000.00 | |
| Divided by 12 | ₱100,000.00 | |
| Tax-free portion | ₱90,000.00 | |
| Taxable portion | ₱10,000.00 | |
On ₱1,200,000 of basic salary the entitlement is ₱100,000.00, of which ₱10,000.00 is taxable. Add a Christmas bonus and more of it becomes taxable, because the ceiling covers all benefits together rather than each one separately.
Philippines 13th month pay questions
Is 13th month pay the same as a Christmas bonus?
No, and the difference matters twice over. 13th month pay is required by PD 851 and can be enforced; a Christmas bonus is discretionary unless your contract or CBA promises it. They do share one thing — the ₱90,000 tax-free ceiling applies to both combined, so a bonus can push part of your 13th month pay into taxable income.
I joined in the middle of the year. Do I still get it?
Yes, provided you have completed at least 1 month of service in the calendar year. The amount is prorated because the formula uses salary actually earned: 6 months at ₱30,000 earns ₱180,000.00, which divided by 12 gives ₱15,000.00.
What counts as basic salary?
Your basic pay for work rendered — nothing else. PD 851 excludes overtime pay, premium pay, holiday pay, night shift differential, cost-of-living allowances, profit-sharing payments, and the cash equivalent of unused vacation and sick leave. Allowances count only if they have been integrated into your regular salary, typically through long practice or a collective agreement.
When must my employer pay it?
Not later than 24 December. An employer may split it, paying half before the regular school year opens and the balance by 24 December. Employers are also required to report payment to the Department of Labor and Employment.
Is 13th month pay taxable?
Only above ₱90,000. Under §32(B)(7)(e) of the Tax Code as amended by the TRAIN law, 13th month pay and other benefits are excluded from gross income up to ₱90,000 combined. Anything beyond that joins your taxable compensation and is withheld at your usual rate. On a ₱30,000 monthly salary you will not come close; on a basic salary above ₱90,000 a month you will exceed it every year.
Do managers get 13th month pay?
PD 851 covers rank-and-file employees. Managerial employees — those with genuine authority to hire, fire, or set policy, not merely a manager job title — fall outside it. Many employers pay them anyway, but for a manager the entitlement comes from the contract or company practice rather than the statute, and once it has been paid consistently it can become a demandable benefit.
I resigned in September. Does my employer still owe me?
Yes. Separation from employment does not remove the entitlement for the period you worked. It is prorated on the basic salary you earned before leaving and normally forms part of your final pay.
Does unpaid leave reduce it?
Yes. The formula uses basic salary actually earned, so unpaid absences and deductions for tardiness lower the base and therefore the entitlement. Paid leave you took has no effect, because that salary was earned.
Sources and review
- Presidential Decree No. 851 (13th Month Pay Law) — Official Gazette of the Republic of the Philippines
- PD 851 — full text — LawPhil Project
- Republic Act No. 10963 (TRAIN) — §32(B)(7)(e) — LawPhil Project
- Bureau of Working Conditions — 13th month pay — Department of Labor and Employment