How 13th-month pay works

The formula — total basic salary earned during the year ÷ 12. A full year at a steady basic works out to about one month's basic pay.
Basic salary only — overtime, holiday premiums, night differential, and allowances are excluded from the computation.
Tax treatment — it's tax-exempt up to ₱90,000 combined with other benefits; only the excess is taxable.

The requirement comes from Presidential Decree 851, which entitles every rank-and-file employee to a 13th-month pay regardless of how they are paid or how they performed, as long as they worked at least one month during the calendar year.

A quick example

Say your basic pay is ₱18,000 a month and you worked the whole year — January to December. Your total basic salary earned is ₱18,000 × 12 = ₱216,000, so your 13th-month pay is ₱216,000 ÷ 12 = ₱18,000, one full month's basic.

Now say you only started in July and earned ₱108,000 in basic pay for the six months. Your 13th-month pay is ₱108,000 ÷ 12 = ₱9,000. Because the formula divides by 12 no matter what, working a partial year automatically gives you a pro-rated amount — which is exactly what the calculator does when you enter the months you actually worked.

Frequently asked questions

When must it be paid?

Under PD 851, rank-and-file employees must receive their 13th-month pay on or before December 24 each year. Some employers split it into two releases (for example, one in May and the balance in December), which is allowed as long as the full amount is paid by the deadline.

Who is entitled to 13th-month pay?

All rank-and-file employees who worked at least one month during the calendar year, regardless of position, how they are paid, or the method used to compute their wages. Managerial employees are not covered by law, though many companies grant it anyway as a matter of policy.

What if I resigned or was separated during the year?

You're still owed a pro-rated 13th-month pay based on the basic salary you earned up to your last day. It normally forms part of your final pay or back pay.

Is 13th-month pay taxed?

It's exempt up to ₱90,000 when combined with other benefits (like bonuses). Anything above that combined cap is added to your taxable income.

Is 13th-month pay the same as a Christmas bonus?

No. The 13th-month pay is mandatory under the law; a Christmas bonus is a voluntary, discretionary gift from the employer. A bonus can't be used to replace the 13th-month pay you're legally owed.

What counts as basic salary?

Your fixed basic pay. Overtime, allowances, and other premiums don't count, so enter basic pay only for an accurate result.

Is my information uploaded?

No. The calculation runs entirely in your browser. Nothing you enter is stored or sent to a server.