Calculate your 13th month pay
| Total basic salary earned in the year | ₱300,000.00 |
| Half instalment (if paid in two parts) | ₱12,500.00 |
| Tax-exempt part (up to ₱90,000 with other bonuses) | ₱25,000.00 |
| Taxable excess above ₱90,000 | ₱0.00 |
This is the gross 13th month pay, before any tax on the part above the exemption ceiling. Overtime, holiday pay, night differential and allowances are not included in basic salary.
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. It is not a Christmas gift from the employer and it is not a performance bonus: Presidential Decree No. 851, signed in 1975, requires all covered employers to pay it, and DOLE repeats the rule every year in a labour advisory, most recently Labor Advisory No. 16, Series of 2025. The only condition is that you worked at least one month in the calendar year. Your position, your employment status and the way you are paid do not matter: regular staff, probationary and contractual employees, part-timers and piece-rate workers are all covered, and so are employees who resigned or were separated partway through the year.
The benefit is exactly what the name suggests: a thirteenth month of basic pay for a full year of work, scaled down in proportion for a shorter period. Because it is a legal entitlement, an employer cannot refuse it, defer it past the deadline or replace it with a smaller amount, although a company is free to pay more under its own policy, a contract or a collective bargaining agreement.
How to compute 13th month pay
The formula is short: 13th month pay = total basic salary earned in the calendar year ÷ 12. If you worked the whole year at the same basic salary, the answer is exactly one month's basic pay. If your salary changed, you add up what you actually earned month by month and divide by 12, which is the same thing the calculator does when you enter an average monthly figure and the months worked. This page is a 13th month pay computation calculator in that exact sense: it applies the DOLE formula to your own numbers and shows the breakdown, including the tax-exempt check.
What counts as basic salary is where most mistakes happen. Basic salary is your regular wage. Overtime pay, holiday pay, night shift differential, cost-of-living allowance and profit-sharing payments are excluded, unless your contract, collective bargaining agreement or company policy expressly treats them as part of basic pay. For employees with variable earnings, such as piece-rate workers or employees on a fixed wage plus commission, the average monthly basic salary is used. If you want a how to compute 13th month pay calculator result you can defend to payroll, start from your payslips: add the basic pay lines for the year, leave the overtime and allowance lines out, and divide by 12.
| Element | Rule (PD 851 and DOLE guidelines) |
|---|---|
| Formula | Total basic salary earned in the year ÷ 12 |
| Who is covered | Rank-and-file employees with at least one month of work in the year |
| Basic salary includes | Regular wage; average monthly basic pay for variable earners |
| Basic salary excludes | Overtime, holiday pay, night differential, COLA, bonuses, profit-sharing |
| Partial year | Pro-rated on the salary actually earned |
| Deadline | On or before December 24 |
| Tax exemption | 13th month pay plus other bonuses exempt up to ₱90,000 a year |
Worked examples
Example 1: full year at ₱25,000 a month
Total basic salary earned is 25,000 × 12 = ₱300,000. Divided by 12, the 13th month pay is ₱25,000.00, exactly one month's basic pay. The half instalment, if the employer pays in two parts, is ₱12,500.00. This is the calculator's default result.
Example 2: 6 months at ₱15,000 a month
Total basic salary earned is 15,000 × 6 = ₱90,000. Divided by 12, the 13th month pay is ₱7,500.00. The amount is pro-rated on the time actually worked, not rounded up to a full month.
Example 3: resigned after June at ₱20,000 a month
Total basic salary earned is 20,000 × 6 = ₱120,000. Divided by 12, the 13th month pay is ₱10,000.00, and it forms part of the final pay on separation. Resigning does not remove the entitlement for the months already worked.
Example 4: only 3 months at ₱20,000 a month
Total basic salary earned is 20,000 × 3 = ₱60,000. Divided by 12, the 13th month pay is ₱5,000.00. This is the answer to how to compute 13th month pay for 3 months: one quarter of a month's basic pay, because 3 months is one quarter of the year.
Example 5: the tax ceiling, full year at ₱100,000 a month
Total basic salary earned is 100,000 × 12 = ₱1,200,000. Divided by 12, the 13th month pay is ₱100,000.00. The tax-exempt ceiling is ₱90,000, so ₱90,000.00 is exempt and the excess of ₱10,000.00 is added to taxable compensation income. If the same employee also received a ₱50,000 performance bonus, the combined benefits would be ₱150,000, and the taxable excess would be ₱60,000: the ceiling is shared, not per benefit.
Example 6: 13th month pay plus another bonus
Take a full year at ₱60,000 a month with a ₱50,000 Christmas bonus already received. The 13th month pay is 60,000 × 12 ÷ 12 = ₱60,000.00. Combined with the bonus, total benefits are ₱110,000. The exempt part is ₱90,000.00 and the taxable excess is ₱20,000.00. This is why the calculator asks for other bonuses: without them, the tax check would be wrong.
Who qualifies and who does not
Coverage is wide. Rank-and-file employees qualify regardless of position, designation, employment status or how they are paid, as long as they worked at least one month in the year. That takes in regular staff, probationary and contractual employees, project employees, part-timers, piece-rate workers and employees paid a fixed wage plus commission. An employee with two private-sector employers is owed a prorated 13th month pay by each of them, based on the salary earned with that employer.
A few groups are not covered by the mandatory requirement. Managerial employees are not covered by the law, although many companies include them by policy. Government employees and most government-owned corporations are outside PD 851 because they receive equivalent benefits under separate rules. Household helpers and personal service workers are excluded, as are workers paid purely on commission, boundary or task basis, with limited exceptions for piece-rate workers. Employers can also be exempt in narrow cases: distressed employers that prove financial hardship to DOLE, employers already paying an equivalent benefit of at least one month's salary, and certain new businesses. If you are unsure whether you are covered, the one-month rule and the rank-and-file test are the two questions to answer first.
Deadline and instalments
The full amount must be paid on or before December 24 of each year. Employers may pay it in two instalments: one half before the opening of the regular school year, often in May or June, and the balance on or before December 24. The calculator shows the half amount in its breakdown precisely because this split is so common: half of a ₱25,000 13th month pay is ₱12,500, and that is the figure to expect in the mid-year payment. A collective bargaining agreement can set a different schedule with the union, but the full amount must still be settled by the deadline, and employers must file a compliance report with the nearest DOLE regional office by January 15 of the following year.
Tax: the ₱90,000 exemption
13th month pay is not automatically tax-free. Under Republic Act No. 10963, the TRAIN Law, 13th month pay together with Christmas bonus, mid-year bonus, performance bonus and similar cash benefits are tax-exempt up to a combined ₱90,000 per calendar year. Only the amount above that shared ceiling is added to taxable compensation income, where it is taxed at the employee's marginal rate. The calculator therefore shows two figures: the exempt part and the taxable excess. It deliberately does not show a tax amount, because the tax on the excess depends on the employee's total annual income, and a single rate would be misleading. If your 13th month pay plus bonuses stay under ₱90,000, the taxable excess is zero and nothing is withheld on the benefit.
Resignation and termination
Leaving mid-year does not cancel the benefit. Employees who resign, are terminated or whose contracts end before December are still entitled to a prorated 13th month pay for the period actually worked, and it is paid as part of the final pay. The only condition is the same one-month minimum. Employers may deduct unreturned company property or amounts the employee is responsible for from the final pay, but that does not change the computation itself: total basic salary earned, divided by 12. If the amount is missing from the final pay, it can be raised as a money claim with DOLE or the National Labor Relations Commission.
Frequently asked questions about 13th month pay
What is 13th month pay?
13th month pay is a mandatory benefit in the Philippines, not a company bonus. 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 do I compute my 13th month pay?
Add up all the basic salary you earned in the calendar year and divide by 12. If you worked the full year at the same basic salary, the answer is exactly one month's basic pay. If you started mid-year, resigned, took unpaid leave or got a raise, the same formula handles it: you divide what you actually earned by 12.
How to compute 13th month pay for 3 months?
Multiply the monthly basic salary by 3 and divide by 12, which is the same as one quarter of a month's pay. For example, 3 months at a basic salary of 20,000 pesos gives 60,000 pesos earned in the year, and 60,000 divided by 12 is 5,000 pesos.
How to compute half of 13th month pay?
Divide the full 13th month pay by 2. Employers often pay the benefit in two instalments, half before the school year opens and the balance by December 24, so the calculator shows the half amount in its breakdown: for a full-year 13th month pay of 25,000 pesos, the half instalment is 12,500 pesos.
Is 13th month pay taxable?
Only partly. 13th month pay and other bonuses together are tax-exempt up to 90,000 pesos per calendar year under Republic Act No. 10963, the TRAIN Law. Any amount above that shared ceiling is added to taxable compensation income at your marginal rate. This calculator shows the taxable excess, not the tax itself, because the rate depends on your total income.
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 forms part of your final pay: for example, resigning after June at a basic salary of 20,000 pesos gives 120,000 pesos earned, and 120,000 divided by 12 is 10,000 pesos.
What counts as basic salary?
Basic salary is your regular wage, excluding overtime pay, holiday pay, night shift differential, cost-of-living allowance and bonuses, unless your contract, collective bargaining agreement or company policy treats them as part of basic pay. For variable pay, such as piece-rate work, the average monthly basic salary is used.
When is 13th month pay paid?
In full on or before December 24 of each year. Employers may pay it in two instalments, half before the opening of the regular school year and the balance by December 24, but the full amount must be settled by the deadline. Employers must also file a compliance report with DOLE by January 15 of the following year.
Important: This calculator gives an estimate under the general rules of Presidential Decree No. 851 and DOLE guidelines. Company policy, a contract or a collective bargaining agreement can be more generous, and the tax on any excess above ₱90,000 depends on your total annual income, so the taxable excess shown here is not a tax bill. The result is not tax or legal advice: for a real case, check your payslips with your payroll department or ask DOLE.
Sources on 13th month pay
The formula, the one-month minimum, the December 24 deadline and the ₱90,000 exemption follow Presidential Decree No. 851, its implementing guidelines and Republic Act No. 10963 (TRAIN Law), as restated in DOLE Labor Advisory No. 16, Series of 2025.
- Presidential Decree No. 851: the law requiring 13th month pay
- DOLE Labor Advisory No. 16, Series of 2025 and worked examples
- Who is entitled and when 13th month pay is due
- Payment deadline, instalments and the DOLE report
For other end of service calculators, see the gratuity calculator for the UAE, the End of Service Calculator for Saudi Arabia or the calculator section for the Philippines.
