13th Month Pay is required for rank-and-file private-sector employees under Presidential Decree 851. It equals 1/12 of the total basic salary you earned in the calendar year.
Calculation:
13th Month = Total basic salary earned in the year ÷ 12
Rules:
- Covers rank-and-file employees who worked at least one month in the year
- Must be paid on or before 24 December
- Pro-rated if you worked only part of the year
Tax treatment: 13th-month pay and other benefits are tax-exempt up to a combined ₱90,000 a year (TRAIN Law, RA 10963); the excess is taxable. Bills to raise the ceiling have been filed but not passed.
Government employees get a year-end bonus (one month's basic pay) plus a ₱5,000 cash gift instead, and a mid-year bonus in May.
Try the 13th-month pay calculator.