Key takeaways
- Formula: total basic salary actually earned in the calendar year ÷ 12. Overtime, night differential, holiday and premium pay, and allowances are not included.
- Every rank-and-file employee who worked at least one month in the year is entitled, whatever their status: probationary, contractual, part-time or regular.
- Deadline: not later than December 24. If you resign or are separated, the pro-rated amount is part of your final pay, due within 30 days.
- 13th month pay and other benefits are tax-free up to ₱90,000 a year in total; only the excess is taxed.
- Kasambahay are covered too. If your employer does not pay, you can file a free Request for Assistance with DOLE (hotline 1349).
How the 13th month pay is computed
The legal formula fits on one line: 13th month pay = total basic salary earned during the calendar year ÷ 12. “Earned” is the important word. It means the basic pay you were actually paid for time worked (plus paid leave) between January 1 and December 31, or between your first and last day if you joined or left mid-year. It is not your monthly rate times twelve, and it is not your gross pay with everything added in.
- 1
Find your basic salary for each month worked
For a full month on a fixed monthly rate, this is simply your monthly basic salary, for example ₱25,000. For a partial month (you started or left mid-month), use what you were actually paid for that month. On a semi-monthly payroll, leaving after the 15th cutoff usually means half a month's basic pay.
- 2
Add the months together
Sum the basic salary for every month (or part-month) you worked this calendar year. If your salary was raised in, say, July, use the old rate for January to June and the new rate from July. The calculator's “salary changed mid-year” option lets you enter this total directly.
- 3
Subtract unpaid absences and other deductions from basic pay
If you were absent without pay, or had tardiness or undertime deducted from your basic pay, those pesos were never earned, so they come off the total. Enter the total deducted in pesos. Paid leave (SIL, vacation or sick leave with pay) is not deducted.
- 4
Divide by 12
The result is your 13th month pay. Round to the centavo. That is the amount before any tax, and for most employees no tax applies because of the ₱90,000 exemption.
Notice that the formula does not ask how many months you worked as a separate input. The months are already inside the total. A new hire who joins on June 1 earns seven months of salary by December 31, so the 13th month pay is automatically seven-twelfths of one month's salary. That is why the same calculation works for full-year employees, new hires and those who resigned.
Legal basis: Presidential Decree No. 851 (1975) requires employers to pay rank-and-file employees a 13th month pay of not less than 1/12 of the total basic salary earned within a calendar year, provided they worked at least one month. The Revised Guidelines on the Implementation of the 13th Month Pay Law (1987) set the December 24 deadline, define basic salary and list the exempt employers.
Primary sources: PD 851 (lawphil.net)
How the calculator handles each input
| Input | What to enter | Where to find it |
|---|---|---|
| Basic monthly salary | Your monthly basic rate, without allowances | Your employment contract or payslip “Basic” line |
| Period worked this year | Start date (January 1 if you were already employed) and end date, or “still employed” | Your hiring date; your last day in the resignation acceptance or clearance |
| Unpaid absences and deductions | Total pesos deducted from basic pay this year for absences, tardiness and undertime | Add up the “Absences”, “Tardiness” or “LWOP” lines on your payslips |
| Salary changed mid-year (optional) | The total basic salary you earned this year instead of the monthly rate | Add the basic pay lines from all payslips, or ask payroll for the year-to-date basic |
Inputs of the 13th month pay calculator
If you tick “still employed”, the calculator assumes you will keep working at the same rate until December 31, which is how HR estimates the amount in November. If you enter an end date, it pro-rates to that date. For a partial month, it uses calendar days in that month, which can differ by a few pesos from your company's own payroll convention; if the two disagree, your actual payslips are the better evidence. Where you know the exact basic pay you received, use the “total basic salary earned” option and the result will match payroll to the centavo.
Not sure what counts as basic? Look at your payslip. Lines such as “Basic pay” or “Regular pay” count. Lines labelled “OT”, “ND”, “Holiday”, “Rice allowance”, “Transportation” or “De minimis” do not. If you are leaving your job, the final pay calculator folds this 13th month figure into your full final pay, together with unpaid salary and unused leave.
Worked examples
Three real-number cases, each computed step by step. The second and third show the pro-rated 13th month pay for a new hire and for a resigned employee, which are the cases where most disputes start.
- Employee
- Maria Clara S. Dela Cruz, Customer Service Representative, Makati Business Solutions Inc.
- Basic monthly salary
- ₱25,000
- Period worked in 2026
- January 1 to December 31, 2026 (12 months)
- Unpaid absences
- ₱0
- Step 1: total basic salary earned
- ₱25,000 × 12 = ₱300,000
- Step 2: less unpaid deductions
- ₱300,000 − ₱0 = ₱300,000
- Step 3: divide by 12
- ₱300,000 ÷ 12 = ₱25,000.00
13th month pay: ₱25,000.00, due not later than December 24, 2026. Fully tax-exempt (below ₱90,000).
- Basic monthly salary
- ₱25,000
- Period worked in 2026
- June 1 to December 31, 2026
- Months worked
- June, July, August, September, October, November, December = 7 months
- Unpaid absences
- ₱0
- Step 1: total basic salary earned
- ₱25,000 × 7 = ₱175,000
- Step 2: divide by 12
- ₱175,000 ÷ 12 = ₱14,583.333…
- Step 3: round to the centavo
- ₱14,583.33
13th month pay: ₱14,583.33. Being probationary does not matter; the employee worked more than one month in the year, so the full pro-rated amount is due by December 24.
- Basic monthly salary
- ₱18,000 (semi-monthly payroll: ₱9,000 per cutoff)
- Last day of work
- August 15, 2026
- Full months worked
- January to July = 7 months: ₱18,000 × 7 = ₱126,000
- Part month
- August 1 to 15 = one semi-monthly cutoff = ₱9,000
- Step 1: gross basic salary earned
- ₱126,000 + ₱9,000 = ₱135,000
- Step 2: less unpaid absences deducted during the year
- ₱135,000 − ₱2,000 = ₱133,000
- Step 3: divide by 12
- ₱133,000 ÷ 12 = ₱11,083.333…
- Step 4: round to the centavo
- ₱11,083.33
Pro-rated 13th month pay: ₱11,083.33, payable with the final pay within 30 days of separation (by September 14, 2026), not on December 24.
What counts as basic salary for 13th month pay
Basic salary means the pay for the work you were hired to do during normal hours, including pay for paid leave. The Revised Guidelines specifically exclude the add-ons that many people expect to be included. Your employer may choose to be more generous, by including allowances or commissions, but cannot go below the legal floor.
| Pay item | Included in 13th month? | Note |
|---|---|---|
| Basic monthly or daily wage | Yes | The core of the computation |
| Paid leave (SIL, VL, SL with pay) | Yes | Paid days count as basic pay earned |
| Maternity or paternity leave days | Depends | Check how payroll records them; benefits paid by SSS are not salary from the employer verify |
| Overtime pay | No | Excluded by the Revised Guidelines |
| Night shift differential | No | Excluded |
| Holiday pay and premium pay | No | Excluded |
| Cash conversion of unused SIL | No | Excluded |
| Rice, transport, meal and other allowances | No | Unless your contract treats them as part of basic salary |
| Sales commissions | Depends | Purely commission-based workers are an exemption; see below |
| Unpaid absences, tardiness, undertime | Deducted | Not earned, so they reduce the total |
What goes into total basic salary
Legal basis: Revised Guidelines on the Implementation of the 13th Month Pay Law (1987): basic salary excludes overtime, holiday pay, night differential, premium pay, cash conversion of service incentive leave, and allowances and monetary benefits not considered part of basic salary.
Primary sources: PD 851 (lawphil.net)
PD 851: the 13th month pay law explained
Presidential Decree No. 851 was signed in December 1975 and is still the law that makes 13th month pay mandatory. It is short. The details people argue about (the December 24 deadline, what “basic salary” means, which employers are exempt) come from the Revised Guidelines on the Implementation of the 13th Month Pay Law issued in 1987. When HR cites “the 13th month pay law”, it means PD 851 read together with those guidelines.
Who is entitled to 13th month pay
All rank-and-file employees who worked for at least one month during the calendar year, regardless of how they are designated or their employment status. Probationary, project, seasonal, part-time and fixed-term employees are entitled. So are employees who resigned, were terminated for a just cause, or were laid off: the reason for leaving does not cancel the 13th month pay already earned. What matters is that you were an employee (not a genuinely independent contractor) and that you were paid a basic salary.
- Regular, probationary, contractual and project employees: covered.
- Part-time employees: covered, computed on the basic pay they actually earned.
- Employees on fixed or daily wages, including minimum wage earners: covered. Use daily rate × days actually paid for the year, then ÷ 12.
- Kasambahay (domestic workers): covered by RA 10361 (Batas Kasambahay), on the same 1/12 formula.
- Agency-deployed workers under a legitimate contractor: covered; the contractor is the employer, with the principal answerable if the contractor does not pay (DO 174, s. 2017).
- OFWs: their overseas contract governs; claims go to the NLRC, not to PD 851 directly.
Managerial employees
PD 851 is written for rank-and-file employees, so managerial employees are not entitled by law. In practice, most companies pay their managers a 13th month pay or an equivalent bonus anyway, either in the contract or as company policy. Once it is granted regularly and deliberately over the years, a benefit can become a company practice that the employer cannot simply withdraw verify. A job title alone does not make you managerial: what counts is whether you actually lay down and carry out management policies or hire, fire and discipline staff.
Commission-based and boundary workers
The Revised Guidelines exempt employers of people paid purely on a commission, boundary or task basis, with exceptions. Workers with a fixed basic salary plus commissions are not in that exemption: they must get 13th month pay on at least the basic salary. Whether the commissions themselves are included depends on whether they are really part of salary (such as productivity-linked commissions built into the wage) or incentives on top; the Supreme Court has gone both ways depending on the facts verify. If you are a sales agent on a basic-plus-commission package, ask HR in writing how they compute yours.
Employers exempt from paying 13th month pay
| Employer | Why exempt | What employees get instead |
|---|---|---|
| Government and its subdivisions | Covered by separate civil service rules | Year-end bonus and other benefits under government compensation rules |
| Employers already paying a 13th month pay or equivalent | The benefit is already being paid | The equivalent bonus, which must be at least the PD 851 amount |
| Employers of workers paid purely on commission, boundary or task basis | No fixed basic salary to compute from | Whatever the contract provides (with exceptions) |
Exemptions under the Revised Guidelines
Legal basis: PD 851 (1975) and the Revised Guidelines on the Implementation of the 13th Month Pay Law (1987). Kasambahay coverage: RA 10361 (Batas Kasambahay, 2013).
Primary sources: PD 851 (lawphil.net) · RA 10361 Batas Kasambahay (lawphil.net)
13th month pay deadline: on or before December 24
Employers must pay the 13th month pay not later than December 24 of each year. The deadline is in the Revised Guidelines, not in the text of PD 851 itself. Many employers pay early, on the first December payroll or even in November, and some split it: half before the opening of the school year and the other half by December 24 verify. Either is fine as long as the full amount reaches you by December 24.
| Situation | When it must be paid | Where it appears |
|---|---|---|
| Still employed on December 24 | Not later than December 24 | Separate payslip line or separate payout |
| Resigned, terminated or laid off during the year | With the final pay, within 30 days of separation (Labor Advisory 06-20) | Final pay computation |
| Employer pays in two halves | Balance not later than December 24 | Two payslip lines |
| Kasambahay | Not later than December 24 | Kasambahay payslip (mandatory under RA 10361) |
When 13th month pay is due
If you resign in, say, August, do not wait for December. Your pro-rated 13th month pay belongs in your final pay, which Labor Advisory No. 06, s. 2020 says should be released within 30 days from the date of separation unless your company has a more favourable policy. If it is not in the computation HR gives you, ask why in writing. The resignation letter template already includes a line requesting your final pay and certificate of employment, and the certificate of employment page explains the separate three-day rule for your COE.
Is 13th month pay taxable? The ₱90,000 exemption
Your 13th month pay and other benefits (Christmas bonus, productivity incentives, loyalty awards and similar) are exempt from income tax up to a combined ₱90,000 per year. Only the part above ₱90,000 is added to your taxable compensation. As of October 2026 the ceiling is still ₱90,000; bills proposing ₱150,000 have been filed but are proposals, not law.
| 13th month + other benefits for the year | Tax-exempt part | Taxable part |
|---|---|---|
| ₱25,000 | ₱25,000 | ₱0 |
| ₱90,000 | ₱90,000 | ₱0 |
| ₱120,000 | ₱90,000 | ₱30,000 |
| ₱200,000 | ₱90,000 | ₱110,000 |
How the ₱90,000 ceiling applies
For a rank-and-file worker, a 13th month pay of ₱90,000 would mean a basic salary of around ₱90,000 a month, so in practice almost everyone's 13th month pay is fully tax-free. It becomes relevant when an employer adds a large year-end bonus on top. The ₱90,000 is per employee per year, across all benefits from the same employer; if you changed jobs mid-year, your new employer's BIR Form 2316 computation should take your previous employer's benefits into account, which is why HR asks for your previous 2316.
Legal basis: National Internal Revenue Code Sec. 32(B)(7)(e), as amended by RA 10963 (TRAIN Law): 13th month pay and other benefits are excluded from gross income up to ₱90,000.
Primary sources: RA 10963 TRAIN Law (lawphil.net)
13th month pay for resigned employees and other special cases
Resigned or terminated employees
You keep the 13th month pay you earned up to your last day, whatever the reason you left. It is computed the same way (basic salary earned from January 1 to your last day, ÷ 12) and paid with your final pay. Employers sometimes say that an employee who did not complete clearance or who resigned without the 30-day notice forfeits it. Clearance can delay processing, and an employer may set off amounts you validly owe with your written authorisation, but the 13th month pay itself is a statutory benefit, not a reward for leaving properly.
Employees on maternity leave or long sick leave
Only basic salary actually earned counts. Days on leave without pay reduce the total. Paid leave counts. For maternity leave under RA 11210, the 105 days are paid through SSS with the employer paying any salary differential; how payroll records the differential affects whether it enters the 13th month base verify. If your 13th month pay looks low after a long leave, ask payroll for the year-to-date basic salary figure they used.
Minimum wage earners and daily-paid workers
Daily-paid workers compute the same way: daily rate × days actually paid in the year (including paid holidays that are part of basic pay under your payroll), then ÷ 12. Minimum wage rates differ by region and are set by the Regional Tripartite Wages and Productivity Boards; check your region's current wage order rather than an old figure online [verify current rates per region]. A wage increase in the middle of the year raises only the months after it takes effect, so use the “salary changed mid-year” option.
Employees with two employers
If you work for two employers at the same time, each pays 13th month pay on the basic salary it paid you. If you changed employers mid-year, each employer pays for the months you worked for it: the old one through your final pay, the new one by December 24.
What to do if your 13th month pay is unpaid or wrong
- 1
Recompute it yourself
Gather your payslips for the year and use the calculator with the total basic salary earned. Write down the amount you expected and the amount you received.
- 2
Ask HR or payroll in writing
Email or write to HR asking for the breakdown: the period covered, the basic salary total and the deductions. Many errors (a missed partial month, an old rate) are fixed at this stage.
- 3
Send a polite written demand
If you have left the company and the money is part of your final pay, use the demand letter for final pay. It cites the 30-day rule and gives a reasonable deadline.
- 4
File a Request for Assistance under SEnA
The Single Entry Approach is free and does not need a lawyer. File a Request for Assistance at the DOLE office nearest you or call the DOLE hotline 1349. Prepare it with our SEnA request for assistance form, and read how to file a DOLE complaint first.
- 5
If it is not settled
If conciliation within 30 days does not settle the claim, the case is referred to the proper office (the DOLE Regional Office or the NLRC) for a formal complaint. Have a lawyer or the Public Attorney's Office review your papers at this stage.
Money claims under the Labor Code generally prescribe three years from when the money became due (Labor Code Art. 306, formerly Art. 291). For a 13th month pay due on December 24, 2026, that would be December 24, 2029. Do not wait that long: payslips get lost and HR staff move on. Kasambahay disputes go to the DOLE Regional Office; OFW money claims go to the NLRC. You can see how many SEnA requests DOLE handles on our SEnA statistics tracker.
Legal basis: RA 10396 (2013) made 30-day mandatory conciliation-mediation under the Single Entry Approach part of the Labor Code. Current rules: DOLE Department Order No. 249, s. 2025 (Revised SEnA IRR), which replaced the old rules under DO 151-16.
Primary sources: RA 10396 (lawphil.net)
13th month pay vs Christmas bonus vs other year-end pay
| Pay | Mandatory? | Basis | Tax treatment |
|---|---|---|---|
| 13th month pay | Yes, for rank-and-file | PD 851 | Part of the ₱90,000 exemption |
| Christmas bonus | No, unless in contract, CBA or established practice | Company policy | Part of the ₱90,000 exemption |
| 14th month pay | No | Company policy or CBA | Part of the ₱90,000 exemption |
| Cash conversion of unused SIL | Yes, if SIL unused (5 days after 1 year) | Labor Code Art. 95 | Taxable as compensation, subject to de minimis rules verify |
| Government year-end bonus | Per government rules | Civil service compensation rules | Part of the ₱90,000 exemption |
Year-end pay compared
A frequent HR line is “we already gave a Christmas bonus, so there is no 13th month pay.” That is only lawful if the bonus is at least equal to what PD 851 requires and is given as the 13th month or its equivalent. A ₱5,000 Christmas gift does not replace a ₱25,000 13th month pay. Likewise, the 13th month pay cannot be cancelled because the company had a bad year; PD 851 has no loss exemption for private employers outside the listed categories.
Common 13th month pay computation mistakes
| The mistake | Why it matters | Do this instead |
|---|---|---|
| Using monthly rate × months instead of salary earned | Ignores unpaid absences and partial months | Add the basic pay actually earned, then ÷ 12 |
| Dropping the last partial month | Underpays resigned employees | Include the final cutoff's basic pay |
| Including overtime and allowances | Overstates what the law requires (fine if the company chooses to) | Use basic pay only, unless your contract says otherwise |
| Using the new rate for the whole year after a raise | Overstates the amount | Old rate before the raise, new rate after |
| Deducting paid leave | Paid leave is basic pay earned | Deduct only unpaid absences |
| Waiting for December after resigning | Pro-rated 13th month is part of final pay | Expect it within 30 days of separation |
| Thinking probationary staff are excluded | All rank-and-file with 1+ month are entitled | Pay or claim the pro-rated amount |
| Taxing the whole 13th month pay | First ₱90,000 of benefits is exempt | Tax only the excess over ₱90,000 |
Errors HR and employees make most often
Other names people search for
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Leaving your job this year? Run the separation pay calculator if you were laid off for an authorised cause, and see the employment hub for the rest of the documents you will need, including the resignation law at a glance.
Frequently asked questions
+How do I compute my 13th month pay?
Add up the basic salary you actually earned from January 1 to December 31, or to your last day if you left, then divide by 12. Leave out overtime, night differential, holiday and premium pay, and allowances. Subtract any unpaid absences or tardiness deducted from your basic pay. For example, ₱25,000 a month for a full year with no unpaid absences gives ₱300,000 ÷ 12 = ₱25,000.
+How is 13th month pay computed for a resigned employee?
The same formula, cut off at your last day. Add the basic salary earned from January 1 to the date you left, including the last partial cutoff, subtract unpaid absences, and divide by 12. An employee earning ₱18,000 who left on August 15 with ₱2,000 in unpaid absences gets (₱126,000 + ₱9,000 − ₱2,000) ÷ 12 = ₱11,083.33. It is paid with the final pay within 30 days, not in December.
+Is a probationary or new employee entitled to 13th month pay?
Yes. PD 851 covers all rank-and-file employees who worked at least one month during the calendar year, regardless of status. A probationary employee hired on June 1 at ₱25,000 a month earns ₱175,000 by December 31 and gets ₱175,000 ÷ 12 = ₱14,583.33 by December 24. Employees who worked less than one month in the year are not covered by the law, though some companies still pay.
+When is the deadline for 13th month pay?
Not later than December 24 of each year, under the Revised Guidelines on the Implementation of the 13th Month Pay Law. Employers may pay earlier or in two parts, as long as the full amount is paid by December 24. If you resign or are separated before then, your pro-rated 13th month pay is part of your final pay, due within 30 days of separation under Labor Advisory 06-20.
+Are overtime pay and allowances included in 13th month pay?
No, not by law. The Revised Guidelines exclude overtime, night shift differential, holiday pay, premium pay, cash conversion of unused service incentive leave, and allowances or monetary benefits that are not part of basic salary. Your employer may choose to include them, and some contracts or CBAs do, but the legal minimum is based on basic salary only. Check your contract if your allowances are described as part of basic pay.
+Is 13th month pay taxable in the Philippines?
Only the part above ₱90,000. Under NIRC Sec. 32(B)(7)(e) as amended by the TRAIN Law, 13th month pay and other benefits such as Christmas bonuses are tax-exempt up to a combined ₱90,000 per year. If your 13th month pay and bonuses total ₱120,000, only ₱30,000 is taxable. As of October 2026 the ceiling remains ₱90,000; proposals to raise it to ₱150,000 are not yet law.
+Do unpaid absences reduce 13th month pay?
Yes. The 13th month pay is based on basic salary actually earned, so absences without pay, tardiness and undertime that were deducted from your basic pay are not part of the total. Enter the total peso amount deducted during the year in the calculator. Paid leave, such as service incentive leave or vacation and sick leave with pay, does not reduce it because those days were paid as basic salary.
+Are managerial employees entitled to 13th month pay?
Not by law. PD 851 covers rank-and-file employees, so managerial employees are entitled only if their contract, company policy or an established company practice grants it. Most companies pay managers a 13th month pay or equivalent bonus anyway. Your job title does not decide this: you are managerial only if you actually set and carry out management policies or can hire, fire and discipline employees.
+Do kasambahay get 13th month pay?
Yes. RA 10361, the Batas Kasambahay, expressly gives domestic workers 13th month pay, computed the same way: total basic wage earned in the calendar year divided by 12, paid by December 24. A kasambahay paid ₱7,000 a month for the whole year should get ₱7,000. Disputes involving kasambahay go to the DOLE Regional Office, and employers must also give a payslip under the same law.
+What can I do if my employer does not pay my 13th month pay?
First ask HR in writing for the computation. If nothing happens, send a written demand, then file a free Request for Assistance under the Single Entry Approach at the DOLE office nearest you or call the DOLE hotline 1349. A desk officer will set a conciliation conference within the 30-day SEnA period. If there is no settlement, your claim is referred to the DOLE Regional Office or NLRC for a formal complaint.
Related formats and guides
Official sources
- Presidential Decree No. 851 (13th Month Pay Law) — The 1975 decree requiring 13th month pay of 1/12 of basic salary earned in the calendar year.
- RA 10963 (TRAIN Law) — Sets the ₱90,000 tax exemption for 13th month pay and other benefits.
- RA 10361 (Batas Kasambahay) — Gives domestic workers 13th month pay and a mandatory payslip.
- RA 10396 (Single Entry Approach) — Makes 30-day mandatory conciliation-mediation part of the Labor Code.
- NLRC — Where unsettled money claims and OFW claims are filed.
Deepak Middha, Chartered Accountant
18 years in hedge funds; writes and maintains sulat.ph. Figures, deadlines and articles on this page were checked against the Labor Code, DOLE issuances and the agencies' own pages, last on 2026-10-22. Items marked verify are awaiting confirmation from an official source.