Calculation of 13 Month Pay in the Philippines

November 9, 2022


13th month pay


Filipinos look forward to more than just Christmas each December.

A few things connote the holiday season in the Philippines: Jose Mari Chan playing in the background, children singing carols every evening, and of course, the eagerly awaited “13th-month pay,” a nice bonus typically used to buy Christmas presents for our loved ones.

While the majority of local businesses are already familiar with this compulsory benefit, this idea might be novel to overseas businesses. This tutorial is for you if you want to learn more about 13th-month pay, including how to calculate it and other specifics of this rule.

What is the Philippines’ 13th Month Pay?

Government regulations require businesses to pay employees 13th-month pay at the end of the year. Although a lot of people mistake a 13th-month salary for a Christmas bonus, it’s not. Instead, it is covered under the nation’s labor laws.

As a reward for their exceptional work, employees can receive a Christmas bonus of any amount. On December 16, 1975, former President Ferdinand Marcos issued Presidential Decree No. 851, which established the 13th-month salary.

All eligible employees must get their 13th month’s compensation by December 24th of each year, at the latest. Although some organizations choose to pay this in two installments, the majority do so in one lump sum (one in June, and one in December).

Employees can file lawsuits against employers that fail to pay the 13th wage because it is required by law.

Please Read: How to spend 13th Month Pay

Who Is Entitled to Receive 13th Month Pay DOLE?

All “rank-and-file” employees in the private sector are required to get a 13th-month salary as a benefit under DOLE standards. These workers must have worked for the business for at least one month in a given year.

However, what do rank-and-file workers do?

It covers employees who aren’t in managerial roles. Therefore, it excludes individuals who have the power to punish, hire, or fire workers who are qualified for the mentioned salary. Employees must get the 13th month’s compensation as long as these requirements are completed, even if they were fired or quit before it was due.

How Much Pay Philippines 13th Money?

The DOLE claims that the minimum 13th-month pay required by law shouldn’t be less than 1/12 of the workers’ annual basic salary earnings.

Philippine Basic 13th Month Pay Formula

To calculate 13th-month pay, you don’t need to be an expert in mathematics. Remember that the base pay is only capped at what employees make regularly.

It excludes stipends and other financial advantages like sick pay, holiday pay, and overtime that are not a part of normal wages. Benefits for maternity leave are not deducted.

All you need for the formula is the base pay, which you may then divide by 12.

Total annual basic pay divided by 12 equals 13th-month pay.

When an employee has no unpaid days off and makes Php14,000 per month, for instance:

12 divided by 168,000 pesos equals 14,000 pesos.

How to Calculate 13th Month Pay Prorated

For workers who left the company in the middle of the year or had less than a year of service, how do you calculate the 13th month’s pay?

Instead of dividing their accrued compensation by their yearly wage in these situations, you must divide it by 12. This is referred to as the 13th-month pay prorated.

Let’s revisit the earlier illustration. Here is how the 13th month’s compensation would be calculated for an employee who makes Php14,000 per month but has only been employed by the company for five months as of December 31:

Php70,000 / 12 = Php5,833.3


13th Month Pay: Taxable or Not?

Yes, though not always. Only when the 13th month’s pay surpasses Php90,000 may it be taxed. However, employees will receive their 13th month’s pay tax-free if the sum is less than Php90,000. Before the Tax Reform for Acceleration and Inclusion (TRAIN) law was released in 2018, the threshold was Php82,000

When will I be paid for the 13th month?

The 13th month’s compensation must be paid by the company no later than December 24 of each year. Some businesses also provide a 13th-month salary in two equally split installments throughout the year.

What distinguishes a bonus from a 13th month’s pay?

As previously mentioned, 13th-month pay is required by law. In the meanwhile, bonuses are a method for businesses to express gratitude to their staff.

Are maternity leaves factored into the calculation for the 13th month of pay?

No. Parental leaves other than maternity leave are not included.

Do managers have a 13th-month pay right?

No. The only employees who are required to get monetary rewards under the law are non-managerial or rank-and-file workers.

Do government workers have a right to 13th-month pay?

Government workers are currently not entitled to a 13th month salary. This applies to those who work for businesses that are owned and controlled by the government, but not to businesses that run more or less like a private division of the government.

I never was paid for the thirteenth month. How do I file a report?

Employees who have not received their 13th-month pay must notify their employers to the DOLE Regional Office in their area before January 15 of the following year since it is required.


Now that you know how to compute it using this 13th-month pay computation guide, take this chance to organize your expenses and save more money. The 13th-month pay laws in the Philippines were established so that the working Filipino class might “fully celebrate Christmas and New Year.” Avoid going overboard andspending it all at once.

Keep as much of it as you can to have money left over for future purchases.