13th Month Pay Philippines 2026: Who Qualifies, How Much & Deadline

For covered private-sector employees, the minimum 13th-month pay is total basic salary actually earned during the calendar year divided by 12, payable not later than December 24. It equals one full month of basic salary when the employee earned the same qualifying basic salary throughout all 12 months. A mid-year start, salary change or unpaid absence can change the amount. Use this guide to check entitlement and payment rules, then verify the computation against your payroll records.

By job: 13th-month pay questions commonly affect retail and food-service workers, factory and warehouse workers, and small business owners.

Direct Answer

Presidential Decree No. 851, as amended, covers rank-and-file private-sector employees who worked at least one month during the calendar year. The minimum is total qualifying basic salary earned during the year ÷ 12, payable not later than December 24. See DOLE-BWC’s coverage, formula and deadline reminder.

Choose your next step: Check eligibility · Calculate full or prorated pay · Check pay after resignation · Resolve an unpaid or short payment.

Government employee? Start with the government employment and benefits guide; government year-end benefits follow separate rules. Kasambahay? See the kasambahay 13th-month-pay guide for the separate legal basis.

When must 13th-month pay be released?

13th-month pay must be released not later than December 24 of every year. The deadline comes from Section 1 of Presidential Decree No. 851, as modified by Memorandum Order No. 28 (1986). An employer may pay half before the opening of the regular school year and the rest on or before December 24 (Rules Implementing PD 851, Sec. 5); where a union is the recognized bargaining agent, the payment schedule may be agreed. If you resigned or were separated earlier, see the after-resignation guide.

Are allowances, commissions and overtime included in 13th-month pay?

Allowances and overtime are generally not included; commissions depend on what they really are. 13th-month pay is computed on basic salary, which excludes overtime, premium, holiday and night-differential pay, COLA and the cash value of unused leave, unless an individual or collective agreement, company practice or policy treats them as basic salary (DOLE Workers’ Statutory Monetary Benefits Handbook 2024, 13th-Month Pay, Part C). Sales commissions that form an integral part of the salary structure are included; productivity-bonus-type “commissions” are not (Philippine Duplicators v. NLRC, G.R. No. 110068, February 15, 1995).

Which salary components are included in the 13th-month pay computation? Check each line of your payslip against this table of the legal minimum rules.

Component	Included in basic salary for 13th-month?	Basis
Basic salary for time worked	Yes. Basic salary includes all remunerations or earnings paid by the employer for services rendered.	Rules Implementing PD 851, Sec. 2(b); DOLE handbook, Part C
Salary for paid leave days taken	Yes in DOLE’s guide computation: a month with paid leave counts in full; only leave without pay reduces the total.	DOLE handbook, Part D example
Cost-of-living allowance (COLA)	No, unless an agreement, company practice or policy treats it as part of basic salary.	Rules Implementing PD 851, Sec. 2(b); DOLE handbook, Part C
Overtime pay	No, unless an agreement, company practice or policy treats it as part of basic salary.	Supplementary Rules on PD 851, item 4; DOLE handbook, Part C
Premium and holiday pay	No, unless an agreement, company practice or policy treats it as part of basic salary.	Revised Guidelines (1987), item 4, quoted in Boie-Takeda; DOLE handbook, Part C
Night shift differential	No, unless an agreement, company practice or policy treats it as part of basic salary.	Revised Guidelines (1987), item 4, quoted in Boie-Takeda; DOLE handbook, Part C
Sales commissions that are part of the wage	Yes, when they are an integral part of the basic salary structure, such as a set percentage of each sale closed.	Philippine Duplicators v. NLRC, G.R. No. 110068 (1995, en banc)
Productivity or incentive “commissions”	No, when they are really productivity bonuses or profit-sharing-type payments not tied to the employee’s own sales.	Boie-Takeda v. De la Serna, G.R. No. 92174 (1993), as explained in Philippine Duplicators (1995)
Profit-sharing payments	No. Profit-sharing payments are expressly left out of basic salary.	Rules Implementing PD 851, Sec. 2(b)
Cash value of unused leave	No, unless an agreement, company practice or policy treats it as part of basic salary.	DOLE handbook, Part C; Revised Guidelines, quoted in Boie-Takeda

A contract, company policy or CBA may add items to the base, but cannot go below these rules. On paid leave, an older decision, San Miguel Corp. v. Inciong, G.R. No. L-49774 (1981), decided under the pre-1987 rules, treated leave payments as outside basic salary; DOLE’s current guide computation counts paid leave days in full. Ask payroll which basis it used. For the underlying definitions, see what counts as basic salary, overtime pay rules and night shift differential.

Who Is Entitled to 13th-Month Pay in the Philippines?

Covered rank-and-file employees in the private sector who have worked for at least one month during the calendar year are generally entitled to 13th-month pay. Employment status alone does not remove entitlement: regular, probationary, project-based, casual, seasonal, daily-paid, piece-rate and many commission-paid employees may qualify if they are otherwise covered. Managerial employees and other legally excluded categories are treated differently.

How Is 13th-Month Pay Computed?

13th-month pay = total basic salary actually earned during the calendar year ÷ 12 (Rules Implementing PD 851, Sec. 2(a)). A full-year employee with an unchanged salary receives one month’s basic salary. An employee who resigns or is terminated before year-end gets the same formula applied to basic salary earned up to separation. For partial years or mid-year salary changes, use the pro-rated 13th-month pay calculator.

Key Takeaways

• Governing rule: Presidential Decree No. 851, as modified by Memorandum Order No. 28, s. 1986, and its implementing rules.
• Who’s covered: Rank-and-file employees in the private sector who worked at least one month in the calendar year, regardless of employment status or pay scheme.
• Who’s excluded: Managerial employees (by actual duties, not job title), government personnel, kasambahay/domestic workers (covered instead under RA 10361), true independent contractors, and employees of employers already paying an equivalent or better benefit.
• Formula: Total basic salary actually earned during the calendar year ÷ 12.
• Deadline: Not later than December 24 each year; employers may split payment, commonly half by May/June and the balance by December 24.
• Tax treatment: Tax-exempt up to a combined ₱90,000 per year together with other bonuses, under the TRAIN Law; any excess is taxed as ordinary compensation.
• Employer reporting: Covered employers must file a compliance report with the DOLE Regional Office (now via reports.dole.gov.ph) by January 15 of the following year.
• Not the same as 14th month pay: 13th month pay is mandatory; a further 14th month bonus is voluntary unless a specific employer’s policy, contract, or CBA commits to it. See our companion guide, What Is 14th Month Pay in the Philippines?

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Who Qualifies · Calculator · How to Compute · Deadline · Tax · Employer Duties · If Unpaid · FAQs

Decision Snapshot

Question	Quick answer
Who qualifies?	Covered rank-and-file private-sector employees who worked at least one month during the calendar year.
Formula	Total basic salary actually earned during the calendar year ÷ 12.
Deadline	Not later than December 24.
Resigned or terminated employee?	Generally entitled to a prorated amount for covered service during the year.
Probationary, project, casual or seasonal?	Employment status alone does not remove entitlement if the worker is otherwise covered.
Tax treatment	13th-month pay shares the statutory tax-exempt ceiling for 13th-month pay and other benefits.
If unpaid?	Document the computation, request payment in writing, then use DOLE/SEnA or the proper money-claim route if unresolved.

Legal Basis: Presidential Decree No. 851

13th month pay was created by Presidential Decree No. 851, issued in 1975, which required covered employers to pay their employees a 13th month pay before the end of the year.[1] The original decree applied only to employees earning up to a ₱1,000 monthly basic salary. Memorandum Order No. 28, s. 1986, and its implementing rules removed that salary ceiling, so today the benefit applies to covered rank-and-file employees regardless of how much they earn.

Because it comes directly from a presidential decree rather than a company policy, 13th month pay is not negotiable, cannot be waived by the employee, and cannot be conditioned on company performance — unlike a discretionary bonus.

Who Is Covered

Coverage is broad by design. All rank-and-file employees in the private sector are entitled to 13th month pay if they have worked for at least one month during the calendar year, regardless of:

• Employment status — regular, probationary, casual, project-based, seasonal, or fixed-term employees are all covered.
• Pay scheme — monthly-paid, daily-paid, and piece-rate workers are covered; workers paid partly or wholly on commission may also be covered where the commission is an integral part of their wage structure.
• Job title — coverage depends on actual rank-and-file duties, not what a position is called on paper.

Who is excluded

• Managerial employees — those whose primary duty is management of the business and who have the authority to hire, discipline, or set policy. This is determined by actual function, not job title; a "manager" who does not actually perform managerial duties may still be covered.
• Government employees — covered instead by separate civil-service compensation and bonus rules, not PD 851.
• Kasambahay / domestic workers — covered under the Domestic Workers Act (Republic Act No. 10361), which has its own wage and benefit rules, rather than PD 851. Section 25 of RA 10361 still entitles them to a 13th month pay; see how to compute a kasambahay’s 13th month pay.
• True independent contractors — individuals genuinely engaged as contractors rather than employees (as distinguished under the four-fold test) fall outside PD 851 entirely.
• Employees of employers already paying an equivalent or better benefit — an employer that already grants a Christmas bonus, mid-year bonus, profit share, or similar benefit at least equal to the statutory 13th month pay may be considered compliant, provided the benefit meets the legal requirements for a creditable equivalent.

If you're unsure which category applies to you, the safest approach is to ask HR directly which exclusion, if any, your employer is relying on — "managerial" status in particular is frequently misapplied to employees who don't actually exercise managerial authority.

How to Calculate 13th Month Pay

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

Prefer not to do the math by hand? Our pro-rated 13th month pay calculator handles partial-year employment and mid-year salary changes automatically.

What counts as "basic salary"

Included: pay for services rendered at the regular rate, including piece-rate earnings and sales commissions that are an integral part of the wage structure. Excluded: overtime, premium, holiday and night-differential pay, COLA, profit sharing and unused-leave cash conversions, unless a policy or CBA treats them as basic salary. See the component-by-component table for commissions and paid leave.

Worked example 1: Full-year employee

An employee earning a fixed ₱25,000 basic monthly salary, employed the entire calendar year:

Total Basic Salary for the Year = ₱25,000 × 12 = ₱300,000
13th Month Pay = ₱300,000 ÷ 12 = ₱25,000

Worked example 2: Employee with a mid-year salary increase

An employee earning ₱22,000/month for the first 5 months of the year and ₱25,000/month for the remaining 7 months:

Total Basic Salary = (₱22,000 × 5) + (₱25,000 × 7) = ₱110,000 + ₱175,000 = ₱285,000
13th Month Pay = ₱285,000 ÷ 12 = ₱23,750

Note that this is lower than simply using the current ₱25,000 salary — 13th month pay reflects what was actually earned across the year, not a projection of the current rate.

Worked example 3: Employee hired mid-year

An employee earning ₱30,000/month who started work in April (9 months of service that calendar year):

Total Basic Salary Earned = ₱30,000 × 9 = ₱270,000
13th Month Pay = ₱270,000 ÷ 12 = ₱22,500

Unlike 14th month pay, this proration is not optional — it applies automatically by law to anyone who worked at least one month, even if they're no longer employed by December 24.

Worked example 4: Employee who resigns before year-end

An employee earning ₱28,000/month who resigns effective end of August (8 months worked that year) is still entitled to a prorated 13th month pay, typically released with final pay:

Total Basic Salary Earned = ₱28,000 × 8 = ₱224,000
13th Month Pay = ₱224,000 ÷ 12 = ₱18,667 (rounded)

Resignation scenarios can get more complex than this — different exit months, salary changes before leaving, or disputes over the final computation. For a deeper walkthrough with more worked examples, see Are Resigned Employees Entitled to 13th-Month Pay in the Philippines?

Worked example 5: Unpaid absences

Illustration: basic salary before an unpaid-time adjustment is ₱240,000. Payroll records show ₱3,000 was not earned during unpaid time, leaving ₱237,000. The minimum 13th-month pay is ₱237,000 ÷ 12 = ₱19,750. These are sample payroll totals, not a prescribed daily divisor.

Do not deduct the absence twice. If the ₱237,000 total already excludes unpaid time, use it directly. Do not deduct another ₱3,000 from that total or from the benefit. See the calculator’s quick-versus-exact worked example.

How to verify your computation is correct

1. Confirm your total basic salary actually earned for the year from your payslips, not just your current monthly rate.
2. Check what your employer included or excluded from the base — overtime, allowances, and holiday premium should generally be excluded unless your specific company policy says otherwise.
3. If you started, left, or took extended unpaid leave mid-year, confirm the amount was prorated to reflect only the months actually worked.
4. For a full-year employee with an unchanged salary, the result should simply equal one month's basic salary — if it doesn't and nothing changed during the year, ask HR for an itemized computation.

Common computation errors

• Using your current salary instead of the actual basic salary earned across the year when there was a mid-year raise, demotion, or unpaid leave.
• Including overtime, allowances, or holiday premium pay in the base when they should be excluded.
• Failing to prorate — or incorrectly prorating — for employees who worked less than the full calendar year.
• Applying the original ₱1,000 monthly-salary ceiling, which was removed by Memorandum Order No. 28 back in 1986 — some outdated references still cite it incorrectly.

Payment Deadline

The annual statutory deadline is not later than December 24, including December 24, 2026 for this calendar year. Payments may be split, but the required annual amount must be paid by the deadline. DOLE’s 2025 reminder explains the standing deadline and split-payment rule; it is not a new 2026 advisory.

Release date, payroll cutoff and legal deadline

Date or period	What it means
Company payout date	The employer’s announced release date, which may be earlier than the legal deadline.
Payroll cutoff	The period used to prepare a payroll run. Ask which earnings are included and how remaining year-end adjustments will be reconciled.
December 24	The annual legal payment deadline. A payroll cutoff does not itself change the calendar-year computation rule.
Separation date	A separate final-pay question. Use the after-resignation guide rather than assuming every former employee must wait until December.

If a payment uses estimated year-end earnings, request the basic-salary periods, earlier installments and reconciliation breakdown. Do not assume an unexplained cutoff removes basic salary already earned.

Tax Treatment of 13th Month Pay

Under Section 32(B)(7)(e) of the National Internal Revenue Code, as amended by the TRAIN Law (Republic Act No. 10963), 13th month pay and other benefits — including Christmas bonuses, productivity incentives, and any voluntary 14th month pay — are tax-exempt up to a combined ₱90,000 per calendar year.[2] This threshold has applied since 2018.

• If your combined 13th month pay and other included bonuses total ₱90,000 or less in a calendar year, none of it is subject to withholding tax.
• Any amount above ₱90,000 combined is added to your taxable compensation income and withheld at your marginal income tax rate.
• The cap is shared across all benefits in that category, not a separate allowance per benefit type.

Worked example: An employee earning ₱25,000/month receives ₱25,000 in 13th month pay for the year. If the same employer also gives a ₱20,000 Christmas bonus that falls in the same "other benefits" bucket, the combined total is ₱45,000 — still under the ₱90,000 ceiling, so none of it is taxed. If that employee also received a voluntary ₱50,000 mid-year bonus, the combined total (₱95,000) would exceed the cap by ₱5,000, and only that ₱5,000 excess would be taxed as ordinary compensation — the 13th month pay itself is never singled out first.

Employers must reflect any taxed excess correctly in the employee's BIR Form 2316 at year-end. For most rank-and-file employees whose 13th month pay alone falls well under ₱90,000, the entire amount is simply tax-free.

Employer Reporting Requirement

Separate from paying the benefit itself, covered private employers must submit a 13th month pay compliance report to the DOLE Regional Office with jurisdiction over their workplace, now filed through reports.dole.gov.ph, not later than January 15 of the following year.[3] The report typically covers the establishment's name and address, principal business, total employment, number of workers who received the benefit, and total amount granted. This reporting obligation exists independently of whether every employee actually received full payment — it is a compliance and monitoring mechanism, not a substitute for actual payment.

What to Do If Your 13th Month Pay Is Unpaid or Too Low

Identify the issue: no payment, a disputed basic-salary total, an earlier installment credited incorrectly, or an unexplained deduction. Support your calculation with payroll records.

Prepare your records

• Payslips or a year-to-date statement showing basic salary, with salary-change notices.
• Employment start date and, where relevant, the effective separation date.
• Attendance and unpaid-leave records used in payroll.
• Proof of earlier 13th-month payments.
• Your dated computation and the employer’s written breakdown and replies.

Request an itemized payroll check

You can adapt this request:

Please send my 2026 13th-month-pay breakdown: basic salary and payroll periods included, excluded amounts and their basis, installments already credited, and the remaining amount and payment date. My records show qualifying basic salary of [amount], divided by 12, less prior 13th-month payments of [amount]. Please check the difference against the attached records.

Keep copies. Remove personal information that is unnecessary when asking someone to review a draft.

Choose the appropriate assistance route

Workers with non-payment or underpayment concerns may approach the DOLE Regional Office with jurisdiction over the workplace. Review the DOLE complaint guide; DOLE ARMS provides online Requests for Assistance, and onsite assistance is also available.

Inspection, SEnA assistance and a formal money claim are not one compulsory sequence for every case. Use Where Should I File? and the case-document checklist to prepare. Ask the receiving office or a Philippine labor lawyer about jurisdiction and filing deadlines, especially where employment status or other claims are disputed.

13th Month Pay vs. 14th Month Pay

Point of comparison	13th Month Pay	14th Month Pay
Legal basis	Presidential Decree No. 851 (mandatory)	No national law; company policy, contract, or CBA (voluntary)
Who must pay it	All covered private employers	Only employers who have committed to it
Coverage	Rank-and-file employees who worked at least 1 month in the calendar year	Whoever the employer's policy or contract names — often narrower than 13th month coverage
Standard amount	1/12 of basic salary earned that year	Usually ~1 month's basic salary, but employer-defined
Legal deadline	Not later than December 24	No fixed legal deadline; employer-set
Can be withdrawn	No — it's a statutory right	Sometimes, unless it has become a company practice or contractual obligation
Tax treatment	Shares the ₱90,000 combined exemption ceiling	Shares the same ₱90,000 combined exemption ceiling

The two are often confused but work very differently. 13th month pay is mandatory for every covered employer under PD 851, with a fixed December 24 deadline and an automatic proration rule. 14th month pay is voluntary nationwide — it exists only where a specific employer's policy, contract, or CBA creates the obligation, with no fixed legal deadline and no automatic proration unless the employer's own policy provides for one. For a full breakdown, including how 14th month pay is computed, taxed, and what to do if a specific employer promised but didn't pay it, see What Is 14th Month Pay in the Philippines? Complete Guide.

Frequently Asked Questions

Is 13th month pay mandatory in the Philippines?

Yes. It's required under Presidential Decree No. 851 for all covered private-sector rank-and-file employees who worked at least one month during the calendar year. Unlike 14th month pay, it cannot be withheld at the employer's discretion.

Who is exempt from paying 13th month pay?

The government, employers of kasambahay/domestic workers (covered under RA 10361 instead), and employers already granting an equivalent or better benefit may fall outside PD 851's coverage. Managerial employees, as opposed to their employers, are the main category of individual workers excluded from receiving it.

How is 13th month pay computed?

Total basic salary actually earned during the calendar year, divided by 12. It excludes overtime, allowances, and most premium pay, and is automatically prorated for anyone who worked less than a full year.

Are allowances, commissions and overtime included in 13th-month pay?

Not as a rule. Overtime, premium, holiday and night-differential pay, COLA and other allowances are left out unless company policy or a CBA treats them as basic salary. Sales commissions that are an integral part of the wage are included; productivity-type bonuses are not.

What is the deadline for 13th month pay?

Not later than December 24 each year. Employers may split it into two payments during the year, but the full amount must be paid by that date.

Is 13th month pay taxable?

Only above a combined ₱90,000 annual threshold shared with other bonuses like 14th month pay and Christmas bonuses, under the TRAIN Law. Most employees' 13th month pay alone falls well under this cap and is entirely tax-free.

Do I still get 13th month pay if I resign before December?

Yes. You're entitled to a prorated amount based on the basic salary you actually earned that calendar year, typically released together with your final pay. See 13th-Month Pay After Resignation for scenario-specific examples and edge cases.

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

No. A Christmas bonus is typically a separate, voluntary benefit an employer may choose to give on top of the mandatory 13th month pay, unless the employer has designated it as a creditable equivalent that meets PD 851's requirements.

Related Reading

The 13th-month component also matters in the statutory retirement-pay formula; see the Retirement Pay Philippines guide and 22.5-day calculator for the Article 302 computation.

• What Is 14th Month Pay in the Philippines? Complete Guide
• Thirteenth-Month Pay (Glossary)
• Pro-Rated 13th-Month Pay Calculator
• Are Resigned Employees Entitled to 13th-Month Pay?

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Sources and Legal Citations

1. Presidential Decree No. 851, s. 1975 (Requiring All Employers to Pay Their Employees a 13th Month Pay), as modified by Memorandum Order No. 28, s. 1986, Official Gazette of the Republic of the Philippines. Supports: legal basis, coverage, computation formula, and December 24 deadline.
2. National Internal Revenue Code, Section 32(B)(7)(e), as amended by the TRAIN Law, Republic Act No. 10963. Supports: ₱90,000 combined annual tax-exemption ceiling for 13th month pay and other benefits, effective 2018.
3. DOLE 13th Month Pay Compliance Report requirement, filed via reports.dole.gov.ph. Supports: January 15 annual reporting deadline for covered employers.
4. Labor Code of the Philippines, Presidential Decree No. 442, as renumbered, Article 128 (visitorial and enforcement power) and money-claims prescription provisions. Supports: DOLE inspection authority and NLRC money-claim remedy for unpaid statutory benefits.
5. Presidential Decree No. 851, its Rules and Regulations and Supplementary Rules (Lawphil); Memorandum Order No. 28, August 13, 1986 (Lawphil). Supports: December 24 deadline, split-payment option, definition of basic salary and listed exclusions.
6. DOLE Bureau of Working Conditions, Workers’ Statutory Monetary Benefits Handbook, 2024 Edition, Chapter 13 (Thirteenth-Month Pay). Supports: included and excluded salary components and guide computation.
7. Philippine Duplicators, Inc. v. NLRC, G.R. No. 110068, February 15, 1995 (en banc resolution); Boie-Takeda Chemicals, Inc. v. De la Serna, G.R. Nos. 92174 and 102552, December 10, 1993; San Miguel Corp. v. Inciong, G.R. No. L-49774, February 24, 1981. Supports: treatment of commissions, productivity bonuses and other payments.

Sources rechecked as of: November 7, 2026. This update added a release-deadline answer and a table of salary components included in or excluded from 13th-month pay. Verify requirements for your own situation against current official issuances and payroll records.

Disclaimer: This article is for general educational and informational purposes only and does not constitute legal, tax, or HR advice. Your specific entitlement, computation, and remedies depend on your individual employment facts. For advice on a specific situation, consult the Department of Labor and Employment, the Bureau of Internal Revenue, or a Philippine labor lawyer.