Last checked October 2026 against Presidential Decree No. 851 and its rules, DOLE Labor Advisory No. 16, Series of 2025, and the Tax Code as amended by the TRAIN Law. DOLE usually releases the year’s advisory in November, so check for a 2026 advisory before you rely on any date below.
Every rank-and-file employee in the private sector who worked at least one month in the calendar year is entitled to 13th month pay. The amount is one-twelfth of the basic salary you actually earned that year, and it must reach you no later than December 24. That short rule leaves a lot of questions: what counts as basic salary, what happens if you were hired in August or resigned in March, and whether a Christmas bonus can replace it. This guide answers those with worked peso computations, an eligibility table and a payslip checklist you can use before December.
Quick answer
| Question | Short answer | Basis |
|---|---|---|
| Who gets it? | Private-sector rank-and-file employees with at least one month of service in the year, regardless of position, designation or how wages are paid | PD 851 rules, Sec. 4; DOLE LA 16-2025 |
| How much? | Total basic salary earned in the calendar year ÷ 12 | PD 851 rules, Sec. 2 |
| When? | On or before December 24; employers may pay half earlier (often before school opens) and the rest by December 24 | PD 851; rules, Sec. 5 |
| Is it taxed? | Tax-free up to ₱90,000 combined with other bonuses and benefits | NIRC Sec. 32(B)(7)(e), as amended by RA 10963 |
| Resigned or fired? | Still entitled, pro-rated, usually released with final pay | DOLE LA 16-2025 |
| Not paid? | File with DOLE (SEnA request for assistance) as a money claim | PD 851 rules, Sec. 9 |
Are you entitled? Eligibility decision table
Find the row that matches your work situation. “Entitled” means the employer must pay at least one-twelfth of your basic salary for the time you worked.
| Your situation | Entitled? | Notes |
|---|---|---|
| Regular rank-and-file employee, worked the whole year | Yes | Full one-twelfth of the year’s basic salary |
| Probationary, contractual or project employee | Yes | Status does not matter; rank-and-file and at least one month of service do |
| Hired mid-year (at least one month of service) | Yes, pro-rated | Based only on basic salary earned from your start date |
| Worked less than one month in the year | Not required by law | The rules set one month as the minimum |
| Resigned or terminated before December | Yes, pro-rated | LA 16-2025 lists resigned and terminated workers as covered |
| Paid by piece rate | Yes | Uses total earnings for the year |
| Fixed or guaranteed wage plus commission | Yes | LA 16-2025 covers this group |
| Paid purely by commission, boundary or task (no fixed wage) | Generally no | Excluded under the PD 851 rules, Sec. 3, unless your contract or company policy gives it |
| Working for two or more employers | Yes, from each | Each employer pays one-twelfth of what it paid you |
| On maternity leave and given salary differential | Yes | LA 16-2025 lists them as covered; see our RA 11210 guide |
| Kasambahay (household worker) | Yes | RA 10361 grants 13th month pay to domestic workers |
| Managerial employee | Not required by law | Many companies still pay it by policy or contract; your duties, not your job title, decide if you are managerial |
| Government employee | Not under PD 851 | Government workers get a year-end bonus and other benefits under separate rules |
| Freelancer or independent contractor | No | Not an employee, unless the arrangement is really employment |
What counts as “basic salary”
This is where most disputes start. Under the PD 851 rules and LA 16-2025, basic salary covers what you are paid for services you render, including paid leave that is part of your regular pay. These items are left out unless your employer has integrated them into basic salary by agreement, policy or practice:
| Pay item | Included in the 13th month base? |
|---|---|
| Basic monthly or daily wage actually earned | Included |
| Paid leave days that are part of regular pay (e.g., sick or vacation leave with pay) | Included |
| Overtime pay | Excluded |
| Premium pay for rest days and special days | Excluded |
| Night shift differential | Excluded |
| Holiday pay | Excluded |
| Cost of living allowance (COLA) | Excluded |
| Cash conversion of unused leave credits | Excluded |
| Days absent without pay | Not earned, so not counted |
| Commissions on top of a fixed wage | Counted in DOLE’s illustration for wage-plus-commission workers; ask HR how yours is classified |
Worked computations in pesos
The formula is always the same: add up the basic salary you actually earned from January 1 (or your start date) to December 31 (or your last day), then divide by 12. The examples below are hypothetical, except Example 2, which reproduces DOLE’s own illustration.
Example 1: Full year, no unpaid absences (hypothetical)
| Item | Amount |
|---|---|
| Basic monthly salary | ₱20,000 |
| Months worked | 12 |
| Overtime earned during the year (excluded) | ₱18,500 |
| Total basic salary earned (₱20,000 × 12) | ₱240,000 |
| 13th month pay (₱240,000 ÷ 12) | ₱20,000 |
Example 2: DOLE’s example with unpaid absences
DOLE’s 2025 advisory uses an employee earning ₱18,127.92 a month, who took five days of leave with pay in June, ten days without pay in September, and one day without pay in November.
| Months | Basic salary earned |
|---|---|
| 10 months at full pay, including June (paid leave): ₱18,127.92 × 10 | ₱181,279.20 |
| September (10 days without pay) | ₱11,120.00 |
| November (1 day without pay) | ₱17,375.00 |
| Total basic salary earned | ₱209,774.20 |
| 13th month pay (₱209,774.20 ÷ 12) | ₱17,481.18 |
Example 3: Hired mid-year (hypothetical)
A worker starts on July 16 at ₱16,500 a month, paid twice a month.
| Period | Basic salary earned |
|---|---|
| July 16 to 31 (one cutoff) | ₱8,250 |
| August to December (₱16,500 × 5) | ₱82,500 |
| Total | ₱90,750 |
| 13th month pay (₱90,750 ÷ 12) | ₱7,562.50 |
Example 4: Resigned in September after a raise (hypothetical)
| Period | Basic salary earned |
|---|---|
| January to March at ₱22,000 (× 3) | ₱66,000 |
| April to September at ₱24,000 (× 6) | ₱144,000 |
| Total up to the last day (September 30) | ₱210,000 |
| Pro-rated 13th month pay (₱210,000 ÷ 12) | ₱17,500 |
Example 5: Daily-paid worker (hypothetical)
| Item | Amount |
|---|---|
| Daily rate | ₱650 |
| Days actually worked in the year | 286 |
| Total basic wages (₱650 × 286) | ₱185,900 |
| 13th month pay (₱185,900 ÷ 12) | ₱15,491.67 |
Example 6: Fixed wage plus commission, and piece rate
| Worker | Earnings counted | 13th month pay |
|---|---|---|
| Sales staff (hypothetical): ₱12,000 a month fixed wage plus ₱60,000 in commissions for the year | ₱144,000 + ₱60,000 = ₱204,000 | ₱17,000 |
| Piece-rate worker (DOLE illustration): ₱120,000 total earnings | ₱120,000 | ₱10,000 |
Example 7: Two employers in one year (hypothetical)
| Employer | Basic salary earned | 13th month pay from that employer |
|---|---|---|
| Employer A, January to June at ₱15,000 | ₱90,000 | ₱7,500 |
| Employer B, July to December at ₱18,000 | ₱108,000 | ₱9,000 |
| Total received for the year | ₱198,000 | ₱16,500 |
Paid in two parts, or replaced by a bonus
The rules allow an employer to pay half before the opening of the school year and the other half by December 24. A union contract (CBA) can also set the timing. The total still has to equal one-twelfth of the year’s basic salary.
| Scenario (hypothetical) | Computation | Balance due by December 24 |
|---|---|---|
| Total 13th month due is ₱17,500; ₱8,000 was paid in June | ₱17,500 − ₱8,000 | ₱9,500 |
| 13th month due is ₱18,000; the company gave a ₱15,000 Christmas bonus as its “equivalent” | ₱18,000 − ₱15,000 | ₱3,000 difference |
| 13th month due is ₱18,000; company gave a ₱20,000 mid-year bonus treated as the equivalent | ₱20,000 already meets the minimum | ₱0 |
A Christmas bonus, mid-year bonus or profit-sharing payment counts as the “equivalent” only if it is at least one-twelfth of basic salary. If it falls short, the employer pays the difference. An employer also cannot cut or remove benefits you already receive because of PD 851 (Sec. 10 of the rules).
Tax: the ₱90,000 ceiling
Your 13th month pay and other benefits, such as a Christmas bonus or productivity incentive, are tax-exempt up to a combined ₱90,000 a year under Section 32(B)(7)(e) of the Tax Code, as amended by the TRAIN Law (RA 10963). Bills to raise the ceiling were filed in the House in 2026, but none had become law when we checked, so ₱90,000 still applies.
Remember to include it correctly when you file your annual ITR.
| Item (hypothetical employee earning ₱60,000 a month) | Amount |
|---|---|
| 13th month pay | ₱60,000 |
| Christmas bonus | ₱20,000 |
| Productivity incentive | ₱15,000 |
| Total bonuses and benefits | ₱95,000 |
| Tax-exempt portion | ₱90,000 |
| Portion added to taxable compensation | ₱5,000 |
The 13th month alone reaches the ceiling only if your monthly basic salary is ₱90,000 or more. For most workers, the ceiling matters only when several bonuses are added together. For year-end tax filing, see the BIR annual income tax return page and our TIN guide.
Payslip checklist before December
- Add up the basic pay lines on all your payslips from January (or your start date).
- Remove overtime, night differential, holiday and premium pay, and COLA unless your contract makes them part of basic pay.
- Subtract unpaid absences, which should already be missing from the payslip.
- Divide by 12 and compare with what HR says you will receive.
- Check whether a mid-year payment was a first half of the 13th month or a separate bonus.
- If you resigned, confirm the pro-rated amount is listed in your final pay computation.
- Keep copies of payslips, your contract and any company memo about bonuses.
If your 13th month pay is late, short or missing
- Ask HR in writing for the computation, quoting the figures from your own checklist.
- File a Request for Assistance under DOLE’s Single Entry Approach (SEnA) at the nearest DOLE field office or through DOLE’s online channels. It is a free, fast conciliation step, usually 30 days.
- If there is no settlement, the case can proceed as a money claim. Non-payment of 13th month pay is treated as a money claim under Sec. 9 of the PD 851 rules.
- Mind the deadline. Money claims under the Labor Code generally prescribe in three years from when the cause of action arose.
Employers also have to file a 13th month pay compliance report with DOLE. For 2025 the deadline was January 15, 2026, through the DOLE online reporting system.
Frequently asked questions
Is 13th month pay the same as a Christmas bonus?
No. The 13th month pay is required by law. A Christmas bonus is usually voluntary, unless a contract, CBA or long company practice makes it demandable. A bonus can count as the 13th month equivalent only if it meets the one-twelfth minimum.
Can my employer pay it in January instead?
Not without breaking the December 24 deadline. LA 16-2025 said there would be no exemption or deferment for 2025.
Do I get 13th month pay if I am on probation?
Yes. Rank-and-file status and at least one month of service are what count, not regularization.
Where should I put my 13th month pay?
Many workers split it between debts, an emergency fund and longer-term savings. One option is government-backed savings like Pag-IBIG MP2.
Sources
All sources checked October 25, 2026.
- Presidential Decree No. 851 and its rules and regulations (Lawphil): coverage, definition of basic salary, exclusions, equivalents, timing, money claims, non-diminution
- DOLE Labor Advisory No. 16, Series of 2025 (PDF): coverage, exclusions from basic salary, the ₱17,481.18 and piece-rate illustrations, December 24, 2025 deadline, January 15, 2026 report
- Republic Act No. 10361 (Batas Kasambahay), Lawphil
- Republic Act No. 10963 (TRAIN Law), Lawphil: ₱90,000 ceiling for 13th month pay and other benefits
- BIR: Annual Income Tax Return
- DOLE Establishment Reports System: employers’ compliance report
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