Last updated: September 20, 2026

Every December, many employees in the Philippines look forward to one thing — the 13th month pay. It’s that extra cash that makes Christmas shopping, family gatherings, and travel plans a bit more comfortable.

But have you ever wondered how it’s actually computed and whether you’re getting the correct amount? In this article, we’ll break down how to compute your 13th month pay the easy way, no accounting degree required, plus what to do if it doesn’t arrive on time.

What Is 13th Month Pay?

The 13th month pay is a mandatory benefit given to all rank-and-file employees in the Philippines, as required by Presidential Decree No. 851.

It’s equivalent to one-twelfth (1/12) of your basic salary earned within a calendar year. Employers are required to release it on or before December 24 of each year.

13th Month Pay vs. Christmas Bonus

These two often get mixed up, pero magkaiba sila. The 13th month pay is a legal requirement, your employer has no choice but to give it. A Christmas bonus, on the other hand, is discretionary. Your company can give one, give none, or give both. If your employer only gives one lump sum in December and calls it a “Christmas bonus,” check that it still meets the 1/12 computation. If it does, that satisfies the legal requirement even under a different name.

Who Is Entitled to 13th Month Pay?

You’re entitled to receive 13th month pay if:

• You are a rank-and-file employee, regardless of position, designation, or employment status (regular, contractual, or probationary).
• You have worked at least one month within the year.

Even if you resigned before December, you’re still entitled to a pro-rated 13th month pay based on the months you actually worked.

Who Are Not Entitled?

The following are not required by law to receive 13th month pay (unless voluntarily granted by the employer):

• Government employees
• Employees already receiving a 13th month or Christmas bonus equivalent to or more than the required amount
• Commission-based or purely profit-based earners (unless they have a fixed salary component)

13th Month Pay Calculator

Use the calculator below to get your estimated 13th month pay in seconds. Just enter your basic monthly salary and the number of months you worked this year.

Inputs: monthly basic salary, months worked, unpaid absence deduction (optional). Output: estimated 13th month pay, with a note on the ₱90,000 tax-exempt threshold.

Formula: How to Compute 13th Month Pay

If you’d rather compute it by hand, here’s the official formula:

13th Month Pay = Total Basic Salary Earned During the Year ÷ 12

Example 1: Full-Year Employee

Let’s say your monthly basic salary is ₱20,000 and you worked the entire year.

Computation: ₱20,000 × 12 months = ₱240,000 (total basic salary for the year). ₱240,000 ÷ 12 = ₱20,000.

You’ll receive ₱20,000 as your 13th month pay.

Example 2: Resigned Mid-Year

If you resigned in August after working 8 full months at ₱20,000 per month:

₱20,000 × 8 = ₱160,000. ₱160,000 ÷ 12 = ₱13,333.33.

You’ll receive ₱13,333.33 as your 13th month pay.

Example 3: With Unpaid Leaves or Absences

Remember, only basic salary is included. Deductions such as unpaid leaves or absences will lower your total earnings for the year.

So if you have ₱240,000 total salary but ₱10,000 in unpaid absences: ₱240,000 – ₱10,000 = ₱230,000. ₱230,000 ÷ 12 = ₱19,166.67.

You’ll receive ₱19,166.67 as your 13th month pay.

What’s Not Included in 13th Month Pay?

To clear confusion, the following are excluded from the computation:

• Overtime pay
• Night shift differential
• Holiday pay
• Allowances (transportation, meal, clothing, etc.)
• Commissions or incentives (if not part of basic pay)

Only basic salary counts, nothing more, nothing less. If you want to see how these same exclusions affect your regular take-home pay, check our net salary calculator for a full monthly breakdown.

When Is the 13th Month Pay Given?

Employers are required to release the 13th month pay on or before December 24.

However, some companies give half in mid-year (June) and the remaining half in December. That’s also allowed, as long as the full amount is released by December 24.

Is 13th Month Pay Tax-Free?

Good news, yes, it can be tax-free, but only up to ₱90,000 (combined with other bonuses). If your total 13th month pay and other benefits exceed ₱90,000, the excess will be subject to income tax.

What If Your Employer Doesn’t Pay It On Time?

Hindi biro ang wala kang matanggap na 13th month pay pagdating ng Pasko. If December 24 has passed and you haven’t received yours, here’s what to do:

1. Ask HR or your employer directly first. Sometimes it’s a payroll timing issue, not a refusal.
2. File a complaint with DOLE through the nearest DOLE Regional/Field Office, or through the Single Entry Approach (SEnA) for a faster, non-litigious resolution.
3. Keep your records. Payslips, employment contract, and any written communication about the delay will support your claim.

Employers who fail to pay 13th month pay can face fines and, in serious cases, criminal liability under PD 851. DOLE actively monitors compliance every December, so this is not something employers can simply ignore.

Frequently Asked Questions

Is 13th month pay the same as a bonus?

No. 13th month pay is a legal requirement under PD 851. A bonus is given at the employer’s discretion and is not mandated by law.

Can my employer give 13th month pay in installments?

Yes, as long as the full amount is released on or before December 24. Many employers split it into a mid-year and a December payout.

Do probationary employees get 13th month pay?

Yes. Any rank-and-file employee who has worked at least one month during the calendar year is entitled to a prorated 13th month pay, regardless of employment status.

Is 13th month pay taxable?

It’s tax-free up to ₱90,000 combined with other bonuses. Only the amount exceeding ₱90,000 is subject to income tax.

What if I resigned before December?

You’re still entitled to a prorated 13th month pay based on the basic salary you actually earned during the months you worked.

Blogger’s Corner

Your 13th month pay isn’t just a bonus, it’s a reward for your hard work throughout the year.

But before spending it all, consider using a portion for savings or investments, like Pag-IBIG MP2 or digital banks that offer higher interest rates. Even setting aside just 20% of it can make a difference for your future self.

If you want to maximize your year-end income, check out my other guides on Pag-IBIG MP2, emergency funds, and investment strategies for beginners.

This article is for general informational purposes only and does not constitute legal or financial advice. For specific concerns about your 13th month pay, consult your HR department or the nearest DOLE office.