13th Month Pay Calculator 2026 Philippines
Compute your 13th month pay under PD 851, including pro-rated amounts for partial-year employees and the ₱90,000 tax exemption analysis.
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Your 13th month pay
How 13th month pay works in the Philippines
Under Presidential Decree 851, all private-sector rank-and-file employees who have worked at least one month in the calendar year are entitled to a 13th month pay. It must be paid on or before December 24 each year. Employers who fail to pay on time face penalties from DOLE plus 12% annual interest on the unpaid amount.
The 13th month pay is computed as one-twelfth (1/12) of the total basic salary earned during the calendar year. For employees who worked the full year at the same salary, this equals one month’s basic pay. For employees who started mid-year, got a raise, or had unpaid leave, the amount is pro-rated.
The formula
For partial year:
= (Monthly basic salary × months worked) ÷ 12
For salary changes mid-year:
= (Sum of monthly basic salaries actually earned) ÷ 12
What counts as “basic salary”?
Only the basic salary is included in the 13th month computation. The following are excluded:
- Cost of Living Allowance (COLA)
- Overtime pay
- Premium pay (rest day, holiday, night differential)
- Allowances not integrated into basic salary
- Cash equivalent of unused vacation/sick leave
- Profit-sharing payments
Unpaid absences and leaves without pay reduce the total basic salary earned and therefore reduce the 13th month pay proportionally.
The ₱90,000 tax exemption (TRAIN Law)
Under Section 32(B)(7)(e) of the Tax Code (as amended by TRAIN Law), 13th month pay and other benefits are combined and tax-exempt up to ₱90,000 per year. Anything above the ₱90,000 threshold is added to the employee’s taxable income and taxed at the employee’s marginal income tax rate.
“Other benefits” includes:
- Christmas bonus
- Productivity incentive bonus
- Performance bonus
- Loyalty awards and gifts
- Cash gifts (excluding the de minimis ₱5,000 annual allowance)
Sample computations
Example 1: Full-year employee earning ₱25,000/month
- Total basic salary: ₱25,000 × 12 = ₱300,000
- 13th month pay: ₱300,000 ÷ 12 = ₱25,000
- Tax: Fully exempt (within ₱90K cap)
Example 2: Mid-year hire (started July 1, earning ₱30,000/month)
- Months worked: 6 (July to December)
- Total basic salary: ₱30,000 × 6 = ₱180,000
- 13th month pay: ₱180,000 ÷ 12 = ₱15,000
- Tax: Fully exempt
Example 3: High earner with bonuses — ₱120,000/month + ₱60,000 Christmas bonus
- Total basic salary: ₱120,000 × 12 = ₱1,440,000
- 13th month pay: ₱1,440,000 ÷ 12 = ₱120,000
- Combined benefits: ₱120,000 + ₱60,000 = ₱180,000
- Tax-exempt portion: ₱90,000
- Taxable excess: ₱90,000 (added to year-end income tax computation)
Frequently asked questions
On or before December 24 of each year. Some employers split it into two payments — half in May or June, half in December — but the full amount must be received by December 24. Late payment incurs penalties from DOLE and 12% annual interest.
All rank-and-file employees in the private sector who have worked at least one month during the calendar year, regardless of position, designation, or employment status (regular, probationary, contractual, project-based). Managerial employees are not legally entitled, but most companies still give them an equivalent bonus.
Yes. Under RA 10361 (Kasambahay Law), domestic workers are entitled to 13th month pay equivalent to one month’s basic salary, computed pro-rata based on actual months of service. It must be paid on or before December 24.
Yes. Pro-rated 13th month pay must be included in your final pay regardless of resignation reason, dismissal, or end of contract. The amount equals (your monthly basic salary × months worked in the year) ÷ 12.
13th month pay is tax-exempt up to ₱90,000 when combined with all other employee benefits (Christmas bonus, performance bonus, etc.). Any amount exceeding the ₱90,000 cap is added to your taxable income and taxed at your marginal bracket rate (15% to 35% depending on total income).
No. The computation uses only basic salary. Overtime pay, holiday premium, night differential, COLA, transportation/meal allowances, and other benefits are all excluded from the 13th month calculation.
Government employees receive separate year-end and mid-year bonuses under different rules (typically one month’s salary each for two payments), not the PD 851 13th month pay. This calculator is designed for private-sector employees.
File a complaint with the nearest DOLE Regional Office. Non-payment is a violation of PD 851 and subject to administrative penalties plus the unpaid amount with 12% annual interest. Most cases settle quickly through DOLE’s Single Entry Approach (SEnA) within 30 days.