How is 13th-month pay calculated in the Philippines?

It equals one-twelfth (1/12) of the total basic salary you earned during the calendar year. For a full year at a fixed salary this is simply one month's basic pay; if you worked only part of the year it is pro-rated to the months actually worked.

Who is entitled to 13th-month pay?

All rank-and-file employees who have worked at least one month during the calendar year are entitled, regardless of position, designation, or how they are paid, under Presidential Decree 851. Managerial employees are not covered by the mandate.

What counts as basic salary?

Basic salary excludes allowances, overtime pay, holiday and night-shift differential premiums, and monetary benefits not integrated into basic pay. Only the basic remuneration for the period worked is counted toward the 13th-month computation.

Is 13th-month pay taxable?

The 13th-month pay and other benefits are tax-exempt up to a ceiling of PHP 90,000 per year. Any amount above that combined ceiling is added to taxable income and taxed at your applicable rate.

When must it be paid?

Employers must pay 13th-month pay on or before December 24 each year. Some employers split it into two instalments, one mid-year and one in December.

Philippines 13th Month Salary Calculator

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This Philippines 13th-month pay calculator computes the mandatory year-end bonus that all rank-and-file employees are entitled to under Presidential Decree 851. Enter your basic monthly salary and the months you worked to see your 13th-month pay, including pro-rating for a partial year.

How it works

The 13th-month pay is one-twelfth of the total basic salary earned during the calendar year:

13th-month pay = total basic salary earned in the year ÷ 12

For an employee who works the full year at a fixed salary, this equals exactly one month’s basic pay. For someone who worked only part of the year, you sum the basic salary actually earned and divide by 12 — which this tool does by multiplying the monthly basic salary by the months worked, then dividing by 12.

Only basic salary counts. Allowances, overtime, holiday premiums and night-shift differentials are excluded.

Example

An employee earning PHP 18,000 a month who worked all 12 months earns 18,000 × 12 = 216,000 total basic salary, so the 13th-month pay is 216,000 ÷ 12 = PHP 18,000. If the same person started in July and worked 6 months, total basic = 18,000 × 6 = 108,000, and the 13th-month pay is 108,000 ÷ 12 = PHP 9,000.

Notes

The 13th-month pay together with other benefits is tax-exempt up to PHP 90,000 per year; anything above that is taxable. Payment is due on or before December 24. Managerial employees are not covered by the statutory mandate, though employers may grant it voluntarily.