How 13th month pay is computed
Under Presidential Decree 851, 13th month pay equals the total basic salary you actually earned during the calendar year divided by 12. If you worked the full year with no unpaid absences, it equals one month of your basic salary.
Who is entitled?
All rank-and-file employees in the private sector who worked at least one month during the year are entitled, regardless of how they are paid. Employees who resigned or were separated get a pro-rated amount based on the months they worked.
When must it be paid?
Employers must pay it on or before December 24 each year.
What counts as basic salary?
Basic salary does not include overtime pay, night differential, holiday pay, allowances or other benefits unless your company treats them as part of your basic pay.
Is 13th month pay taxable?
13th month pay and other bonuses are tax-free up to a combined ₱90,000 per year. Only the amount above ₱90,000 is added to your taxable income.
This calculator gives an estimate. For questions about your specific case, ask your HR department or DOLE.