13th Month Pay in the Philippines
Presidential Decree 851, its implementing rules, and the TRAIN-era tax treatment — with the formulas your payroll runs.
Standards: General information from PD 851, its implementing rules, and RA 10963 (TRAIN). Not legal or payroll advice — your HR's computation governs your actual payout. Last updated: .
The formula
Total basic salary earned during the calendar year ÷ 12. For a full year at constant pay that's simply one monthly basic. Joined mid-year? Pro-rate by months worked: hired March 1 at ₱22,000/month and working through December gives 10 months → (10 × ₱22,000) ÷ 12 = ₱18,333.33. Seven months at the same salary → (7 × ₱22,000) ÷ 12 = ₱12,833.33. Our 13th month calculator does this plus the tax-exemption math.
"Basic salary" excludes more than you'd think
The implementing rules define basic salary to exclude: overtime pay, holiday pay, night differential, cost-of-living allowances (COLA), and other monetary benefits not integrated into the basic rate. Commissions and non-guaranteed bonuses are also out unless your contract integrates them. If your employer pays 13th month on a figure noticeably larger than 12 × monthly basic, check whether they include allowances — some do so voluntarily, but it isn't the statutory floor.
Who is covered?
- All rank-and-file employees regardless of employment status, who worked at least one month during the calendar year.
- Not statutory for managers/supervisors — though most companies grant it anyway as a benefit.
- Househelp are covered under the Kasambahay Law's own rules; government employees follow separate compensation rules.
- Resigned or separated employees who worked at least one month get pro-rated 13th month for the period served.
The ₱90,000 tax exemption
Under TRAIN (RA 10963), the first ₱90,000 of combined 13th month pay and other de minimis benefits each calendar year is tax-exempt; the excess is taxed as regular compensation income. For most employees whose 13th month alone stays under ₱90,000 (that's a ₱7,500/month basic), the entire payout lands tax-free. Note the cap pools 13th month with other exempt benefits — if your employer's de minimis (monetized VL, rice subsidy over ceilings, etc.) already consumed part of the ₱90,000, the overflow reduces what's left for your 13th month. Exact de minimis ceilings live in the BIR regulations our methodology page fences out of scope.
When must it be paid?
On or before December 24 each year. Employers may pay in two installments (once by mid-year) but the balance must land by December 24. Failure to pay is actionable via a DOLE complaint.
Quick FAQ
| I worked only 7 months this year. | You still get 13th month — pro-rated: months × monthly basic ÷ 12. |
| Is my ₱60,000 13th month taxed? | No — under the ₱90,000 combined cap, assuming no large de minimis already consumed it. |
| Does my OT pay raise my 13th month? | No. Overtime, holiday pay and ND are excluded from the base. |
| Do I get one if I resigned in October? | Yes, pro-rated for January–October service. |
| Semi-monthly earners? | Use total monthly basic × months worked ÷ 12 — frequency of payout doesn't change the math. |
Update log
2026-08-22 — Published. PD 851 rules stable since 1975; tax cap per TRAIN, monitored annually.