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What is 13th month pay?
13th month pay is a benefit every private-sector rank-and-file employee in the Philippines is owed by law. Under Presidential Decree No. 851, anyone who worked at least one month in the calendar year receives one-twelfth of the total basic salary earned in that year, paid on or before December 24. A full year at the same basic salary gives exactly one month's basic pay; a shorter period is pro-rated on the salary actually earned. Overtime, holiday pay, night differential, cost-of-living allowance and bonuses are not part of basic salary unless the contract or company policy says otherwise.
It is not a bonus the employer may or may not give. It is a legal entitlement, and employers must also file a compliance report with DOLE by January 15 of the following year. 13th month pay and other bonuses together are tax-exempt up to ₱90,000 a year under the TRAIN Law; anything above that shared ceiling is added to taxable income.
Why a calculator in English?
Filipino workers search for this topic in English, with phrases like 13th month pay calculator and how to compute 13th month pay. This section is therefore written in English, keeping the legal terms exactly as DOLE uses them: basic salary, rank-and-file and the one-twelfth formula. That way the result can be compared directly with a payslip, without anything being lost in translation.
Frequently asked questions
What is 13th month pay?
13th month pay is a mandatory benefit in the Philippines under Presidential Decree No. 851. Every rank-and-file employee who worked at least one month in the calendar year is owed one-twelfth of the total basic salary earned in that year, paid on or before December 24.
How is 13th month pay computed?
Add up all the basic salary earned in the calendar year and divide by 12. A full year at the same basic salary gives exactly one month's basic pay; a partial year is pro-rated on the salary actually earned.
What do I need to enter in the calculator?
Your monthly basic salary, the months you worked this year (decimals allowed for partial months) and any other bonuses received this year, because they share the same ₱90,000 tax-exempt ceiling.
What if I resign before December?
You are still entitled to a prorated 13th month pay for the time you actually worked, provided you worked at least one month in the year. It is paid as part of your final pay.