What Is 14th Month Pay in the Philippines? Complete Guide

If you’ve seen a job posting or heard a coworker mention “14th month pay,” it’s easy to assume it works the same way as the 13th month pay every Filipino employee is entitled to by law. It doesn’t. 14th month pay is a voluntary bonus that some Philippine employers choose to give on top of the legally required 13th month pay — not a separate government mandate. Understanding that distinction matters, because it changes what you can expect, what you can ask for, and what you can do if it isn’t paid.

Direct Answer

14th month pay is an additional, non-mandatory bonus equal to roughly one month’s basic salary that some Philippine employers pay on top of the legally required 13th month pay. Unlike 13th month pay — which Presidential Decree No. 851 requires every covered private employer to pay — 14th month pay exists only where a company policy, employment contract, or collective bargaining agreement (CBA) creates the obligation. Once a company commits to it in a CBA, contract, or an established, consistent, and deliberate company practice, it can become a demandable and enforceable benefit for the employees it covers, even though no national law requires it in the first place.

As of August 2026, several bills — most recently House Bill No. 4073 (20th Congress) and Senate Bill No. 193 (20th Congress) — have proposed making 14th month pay mandatory nationwide. None has been enacted into law.

Key Takeaways

Governing rule: Only 13th month pay is legally mandatory, under Presidential Decree No. 851. 14th month pay is voluntary unless it becomes contractual.
How it becomes mandatory for you specifically: through a CBA provision, an individual employment contract, a company handbook commitment, or a benefit given so regularly and deliberately that withdrawing it could be treated as a diminution of benefits.
Typical amount: approximately one month’s basic salary, though employers set their own formula and eligibility rules.
Common industries: BPO, banking and finance, and some manufacturing and multinational companies are more likely to offer it than smaller local employers.
Tax treatment: 14th month pay shares the same ₱90,000 combined annual tax-exemption ceiling as 13th month pay and other bonuses under the TRAIN Law; amounts above that combined ceiling are taxed as regular compensation.
Legislative status: Multiple bills to mandate it (2016, 2019, and again in 2025–2026) have been filed in Congress; none has passed.
If it’s promised but not paid: check your contract, company policy, or CBA first — a written or established commitment is what makes it enforceable, not the label “14th month pay” alone.

What Is 14th Month Pay in the Philippines?

14th month pay is additional compensation — usually equivalent to one month’s basic salary — that some Philippine employers pay on top of the 13th month pay every covered rank-and-file employee is legally entitled to receive. The key word is additional: 13th month pay is the statutory floor, and 14th month pay is an extra layer some companies build on top of it, entirely by choice.

Nothing in Philippine labor law requires any private employer to pay a 14th month bonus. It emerged as a competitive practice, largely among BPO companies, banks, multinational firms, and large manufacturers, as a way to attract and retain talent in a tight labor market. Because it’s discretionary, its existence, amount, timing, and eligibility rules vary enormously from one employer to the next — there is no single national formula the way there is for 13th month pay.

For a baseline comparison: 13th month pay is computed as 1/12 of the basic salary an employee actually earned within the calendar year, and it must be paid to all covered rank-and-file employees regardless of how the employer feels about the practice. 14th month pay, by contrast, is whatever the employer’s policy, contract, or CBA says it is — if anything.

Legal Framework: Is 14th Month Pay Mandatory in the Philippines?

No. 14th month pay is not legally required under Philippine labor law. The only nationally mandated year-end benefit for covered private-sector rank-and-file employees is 13th month pay.

The law that actually governs this area

Presidential Decree No. 851 (1975) requires all covered employers to pay rank-and-file employees a 13th month pay equivalent to at least 1/12 of the basic salary earned within the calendar year, not later than December 24 each year.[1] It says nothing about a 14th month benefit. Later administrative guidance (Memorandum Order No. 28, s. 1986, and its implementing rules) removed the original ₱1,000 monthly-salary ceiling, so 13th month pay coverage now applies to rank-and-file employees regardless of how much they earn, as long as they’ve worked at least one month during the calendar year.

Where a proposed 14th month pay law stands

Congress has repeatedly tried to make 14th month pay mandatory, and none of the attempts has become law:

Senate Bill No. 2 (17th Congress, filed 2016) and Senate Bill No. 10 (18th Congress, filed 2019), both authored by Senator Vicente “Tito” Sotto III, proposed requiring private employers to pay 14th month pay. Neither advanced past committee.
House Bill No. 4126 (19th Congress) proposed a similar mandate and also stalled in committee.
As of August 2026, two live proposals are pending in the 20th Congress: House Bill No. 4073, filed by Representatives Eric G. Yap and Edvic G. Yap, which would require both private and government employers to pay a 14th month equivalent to one month’s basic salary by November 30 each year, with its own proposed ₱90,000 tax exclusion; and Senate Bill No. 193, filed by Senator Sotto, which would advance the 13th month pay deadline to June 14 and add a separate 14th month payment by December 24, with exemptions for distressed employers, nonprofits with falling income, government agencies, and commission-based workers.

Both bills remain pending. Treat any “14th month pay law” claim you see online as inaccurate unless a bill has actually been signed — as of this writing, none has.

When 14th month pay becomes legally enforceable anyway

Even without a national law, 14th month pay can become a legally demandable obligation for a specific employer through:

A collective bargaining agreement (CBA) that expressly grants it to unionized employees.
An individual employment contract or offer letter that names it as part of compensation.
A company policy or employee handbook that commits to paying it.
Consistent, deliberate, long-standing company practice — Philippine labor jurisprudence recognizes that a benefit given voluntarily but regularly, deliberately, and over a significant period can ripen into a company practice that the employer cannot unilaterally withdraw without violating the non-diminution-of-benefits principle. Whether a particular history of payments qualifies is fact-specific and often disputed.

If your 14th month pay comes from any of these sources, it stops being “just a bonus” and becomes contractually or customarily owed — which is very different from a benefit the employer can cancel at will.

Difference Between 13th and 14th Month Pay

	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

Both benefits are usually computed on basic salary, excluding allowances, overtime pay, premium pay, holiday pay, and cash conversions of unused leave — but because 14th month pay isn’t defined by statute, some employers include items in the base that others exclude. Always check your specific company’s written policy rather than assuming it mirrors the 13th month pay formula exactly.

When both are offered, most employers stagger the payments — commonly releasing 13th month pay around November or by the December 24 legal deadline, and 14th month pay either alongside it, split before and after the holidays, or in a separate cycle such as mid-year.

Who Qualifies for 14th Month Pay?

Because 14th month pay isn’t created by statute, eligibility is whatever the employer’s policy, contract, or CBA says — there is no government-defined coverage rule to fall back on. That said, typical patterns include:

Regular employees are the most consistently covered group. Many companies limit 14th month pay to regularized staff and exclude those still on probation.
Probationary and contractual employees are covered only if the policy explicitly says so; absent that, they’re commonly excluded until regularization.
Project-based and fixed-term employees are the least likely to be covered, since 14th month pay policies are usually built around ongoing employment relationships, though some CBAs extend it to them.
Minimum service requirements are common — for example, requiring at least three, six, or twelve months of continuous service within the year to qualify for a full or prorated amount.
Employees who resign, are terminated, or retire mid-year may still receive a prorated 14th month pay if the policy or contract provides for proration; if it’s silent, the default is usually no pro-rated entitlement, unlike 13th month pay, which is always prorated by law.

Industries that more commonly offer 14th month pay include banking and finance, BPO/call centers, and select multinational manufacturers, largely because these sectors compete heavily for talent and use it as a retention tool. It’s far less common among small and medium local businesses, where even 13th month pay compliance can be inconsistent.

If you’re evaluating a job offer, the only reliable way to know your eligibility is to read the specific wording in your contract, offer letter, or employee handbook — not to assume industry norms apply to you.

How to Calculate 14th Month Pay in the Philippines

Because there’s no statutory formula, your employer’s policy or contract controls the exact computation. Most employers that offer 14th month pay mirror the 13th month pay approach for simplicity. Here’s the typical method:

Standard formula (mirrors 13th month pay):
14th Month Pay = Total Basic Salary Earned During the Reference Period ÷ 12

Some employers instead pay a flat one-month current salary rather than an annualized average. Always confirm which method your employer uses — the two can produce materially different amounts if your salary changed during the year.

What’s typically included and excluded

Usually included in the base: basic monthly salary for time actually worked.

Usually excluded: overtime pay, night shift differential, holiday premium, allowances (transportation, meal, communication), cash value of unused leave, and other bonuses — the same exclusions generally applied to 13th month pay, unless the company policy says otherwise.

Worked example 1: Full-year employee, flat one-month method

An employee earning ₱35,000 basic monthly salary, employed the full calendar year, under a policy that pays a flat one-month 14th month bonus:

14th Month Pay = ₱35,000

Worked example 2: Full-year employee, 1/12 annualized method

The same ₱35,000/month employee, but under a policy that computes 14th month pay the same way as 13th month pay:

Total Basic Salary for the Year = ₱35,000 × 12 = ₱420,000
14th Month Pay = ₱420,000 ÷ 12 = ₱35,000

For an employee with a flat, unchanged salary all year, both methods produce the same result. They diverge when salary changes mid-year (a raise, a demotion, unpaid leave, etc.).

Worked example 3: Employee with a mid-year raise

An employee earning ₱30,000/month for the first 6 months and ₱33,000/month for the next 6 months, under the 1/12 annualized method:

Total Basic Salary = (₱30,000 × 6) + (₱33,000 × 6) = ₱180,000 + ₱198,000 = ₱378,000
14th Month Pay = ₱378,000 ÷ 12 = ₱31,500

Under a flat one-month-of-current-salary policy instead, this same employee would simply receive ₱33,000 — noticeably more. This is exactly why you need to know which method your employer actually uses.

Worked example 4: Employee who worked less than a full year

An employee earning ₱40,000/month who joined in July (6 months of service that year), under a policy that prorates 14th month pay the way 13th month pay is prorated:

Total Basic Salary Earned = ₱40,000 × 6 = ₱240,000
14th Month Pay = ₱240,000 ÷ 12 = ₱20,000

If the employer’s policy doesn’t provide for proration at all, a mid-year hire might receive nothing, or the full amount, depending entirely on the written policy.

How to verify your computation is correct

Get the written policy, contract clause, or CBA provision — not a verbal explanation from HR.
Confirm the reference period (calendar year vs. company fiscal year vs. rolling 12 months).
Confirm which pay components are included in “basic salary” under that specific policy.
Recompute using your actual payslips for the period, not your current salary alone if it changed.
Compare against your 13th month pay computation — if the two use different bases without explanation, ask HR why.

Common computation errors

Employers or employees applying the 13th month proration rules to 14th month pay by default, when the company policy actually specifies a flat amount (or vice versa).
Including allowances or overtime in the base when the policy excludes them.
Failing to prorate for employees who started or left mid-year when the policy requires proration.
Confusing the reference period (using the wrong 12 months).

When Is 14th Month Pay Released?

There is no legal deadline for 14th month pay, unlike 13th month pay’s December 24 statutory cutoff. Employers set their own release schedule, and common patterns include:

Alongside 13th month pay, both released in November or December.
Split release, part before the holidays and the remainder in the new year.
A separate mid-year cycle, distinct from the year-end 13th month payout, often used by companies that want to spread cash-flow impact across the year.
Tied to company performance or fiscal year-end, particularly where 14th month pay functions more like a discretionary bonus than a fixed benefit.

Because timing is set entirely by company policy, cash flow and profitability considerations often influence when — and whether — it’s actually released in a given year, especially where the benefit isn’t contractually locked in. If your 14th month pay is delayed or skipped, check first whether your specific policy, contract, or CBA sets a binding date; if it doesn’t, the employer generally has discretion over timing (though not necessarily over whether to pay it at all, if it has already become a company practice).

Tax Treatment of 14th Month Pay

14th month pay is taxed the same way 13th month pay is: it isn’t taxed on its own, separate schedule — it shares one combined annual exemption ceiling with several other benefits.

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 — which includes 14th month pay, Christmas bonuses, productivity incentives, and certain taxable excess allowances — are tax-exempt up to a combined ₱90,000 per calendar year.[2] This threshold has applied since 2018.

How it works in practice:

If your combined 13th month pay + 14th month pay + 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 under the graduated withholding tables.
The ₱90,000 cap is shared across all the benefits in that category — it is not a separate ₱90,000 allowance for 13th month pay and another ₱90,000 for 14th month pay.

Worked example: An employee receives ₱35,000 in 13th month pay and ₱35,000 in 14th month pay in the same year — ₱70,000 combined, under the ₱90,000 ceiling, so neither is taxed. If the same employee also received a ₱25,000 year-end performance bonus that falls in the same “other benefits” bucket, the combined total (₱95,000) exceeds the ceiling by ₱5,000, and that ₱5,000 excess is taxed as ordinary compensation.

Employers are responsible for withholding tax correctly on any excess and reflecting it in the employee’s BIR Form 2316 at year-end. If your payslip shows 14th month pay taxed in full even though your combined bonuses stayed under ₱90,000, that’s worth raising with HR or payroll.

Note that House Bill No. 4073 separately proposes its own ₱90,000 tax exclusion specifically for a mandatory 14th month pay — but that provision is part of a pending bill, not current law, and would need to pass before it has any legal effect.

What Is 14th and 15th Month Pay?

A smaller number of employers — typically large multinationals, some banks, and companies competing hard for scarce talent — go further and offer a 15th month pay on top of both the 13th and 14th, effectively paying employees the equivalent of 15 months’ salary across the year. Like 14th month pay, a 15th month bonus has no basis in Philippine labor law; it exists purely at the employer’s discretion, through company policy, contract, or CBA.

These additional months are usually structured as year-end or mid-year bonuses tied to company performance, tenure, or position level, rather than as a fixed, guaranteed entitlement — which is an important distinction. A benefit labeled “guaranteed” in your contract functions very differently, legally, from one described as “discretionary” or “subject to company performance,” even if both are called a “15th month bonus.” When evaluating a compensation package that advertises 14th or 15th month pay, always check whether the offer letter uses guarantee language or discretionary language, since only the former is reliably enforceable.

Turning 14th Month Pay Into a Negotiating Point

Because 14th month pay is voluntary, it’s one of the more negotiable pieces of a Philippine compensation package — far more negotiable than statutory benefits like 13th month pay, SSS, PhilHealth, or Pag-IBIG, which employers cannot bargain away.

A few practical points for employees evaluating or negotiating an offer:

Ask for it in writing. A verbal assurance that “we usually give 14th month pay” is not the same as a contract clause. If it matters to your decision, ask that it be written into your offer letter or contract.
Ask how it’s computed and when it’s paid, not just whether it exists. “We offer 14th month pay” can mean anything from a guaranteed one-month salary every December to a discretionary bonus that depends on company performance and may not be paid at all in a lean year.
Distinguish “guaranteed” from “discretionary” language. Contract wording such as “the Company shall pay” creates a stronger obligation than “the Company may, at its discretion, grant.”
Factor it into total compensation comparisons carefully. A slightly lower base salary with a firmly guaranteed 14th month pay can outperform a higher base salary with no year-end bonus at all — but only if the 14th month commitment is actually enforceable.
For existing employees, if your company has paid 14th month pay consistently for several years without qualification, that pattern may itself support an argument that it has become a company practice — though whether a specific history is strong enough to be legally protected is a fact-specific question, not a guarantee.

What to Do If Promised 14th Month Pay Isn’t Paid

If your employer committed to 14th month pay — in a contract, offer letter, handbook, or CBA — and didn’t pay it, the fact that the underlying benefit is “voluntary” at the national level doesn’t mean it’s optional for that specific employer once the commitment exists.

Locate the written source of the commitment — your contract, offer letter, employee handbook, or CBA clause. This is the single most important document for determining whether the benefit is enforceable.
Check your payslips and past payment history. Consistent past payment, even without a written clause, can support an argument that the benefit became a company practice.
Raise it with HR or payroll in writing first, referencing the specific policy or contract language and requesting a computation.
If unresolved, consult the Department of Labor and Employment (DOLE) or a Philippine labor lawyer about your specific facts — whether a given history of payments has ripened into a protected company practice, and what remedy applies, depends on the details of your case.

This is different from a missed 13th month pay, which is always a straightforward DOLE compliance issue because the obligation comes directly from PD 851. A missed 14th month pay requires first establishing that an enforceable obligation existed at all.

Frequently Asked Questions

Is 14th month pay mandatory in the Philippines?

No. Only 13th month pay is mandatory, under Presidential Decree No. 851. 14th month pay is paid only where an employer’s policy, contract, or CBA creates that obligation. Several bills to make it mandatory nationwide remain pending in Congress as of August 2026.

How do you calculate 14th month pay in the Philippines?

There’s no legal formula. Most employers that offer it either pay a flat one-month current basic salary or use the same 1/12-of-annual-basic-salary method used for 13th month pay. Check your specific company policy or contract to see which applies.

Are 13th and 14th month pay the same?

No. 13th month pay is a legally mandatory benefit under PD 851 that every covered rank-and-file employee must receive. 14th month pay is a voluntary, employer-specific bonus with no equivalent legal mandate, though it can become contractually enforceable for a specific employer.

What is 14th and 15th month pay?

Some employers, especially large multinationals and banks competing for talent, offer a 15th month bonus in addition to the 13th and 14th, effectively paying the equivalent of 15 months’ salary a year. Like 14th month pay, this has no basis in Philippine labor law and depends entirely on company policy or contract.

Can an employer remove 14th month pay once it has been given?

It depends. If 14th month pay is purely discretionary and has been given irregularly, an employer generally retains discretion to stop it. If it has been paid consistently, deliberately, and over a significant period, it may have ripened into a company practice protected under the non-diminution-of-benefits principle, making unilateral withdrawal legally risky. Whether a specific history qualifies is fact-specific.

Do government employees receive 14th month pay?

Generally no, under current rules — 14th month pay is not a standard government benefit. Pending House Bill No. 4073 proposes extending a mandatory 14th month pay to government employees as well, but this is not current law.

Is 14th month pay included in separation pay computation?

Separation pay is generally computed based on an employee’s basic monthly salary and length of service, not on discretionary bonuses like 14th month pay, unless a specific company policy, contract, or CBA expressly includes it. Check the governing document in your specific case.

What happens to 14th month pay if I resign mid-year?

This depends entirely on the employer’s policy. Some policies prorate 14th month pay for employees who leave mid-year, similar to how 13th month pay is always prorated by law; others pay it only to employees still employed on a specific payout date, meaning a mid-year resignation could forfeit it entirely. Since there’s no statutory proration rule for 14th month pay, the written policy controls.

Sources and Legal Citations

Presidential Decree No. 851, s. 1975 (Requiring All Employers to Pay Their Employees a 13th Month Pay), Official Gazette of the Republic of the Philippines. Supports: 13th month pay is the only nationally mandated year-end benefit; computation and December 24 deadline.
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.
House Bill No. 4073, 20th Congress, House of Representatives of the Philippines (authors: Rep. Eric G. Yap, Rep. Edvic G. Yap). Supports: description of the pending proposal to mandate 14th month pay. Status: pending legislation, not enacted.
Senate Bill No. 193, 20th Congress, Senate of the Philippines (author: Sen. Vicente C. Sotto III). Supports: description of the pending Senate proposal to mandate 14th month pay. Status: pending legislation, not enacted.
Senate Bill No. 2, 17th Congress (2016), and Senate Bill No. 10, 18th Congress (2019), Senate of the Philippines Legislative Reference Bureau. Supports: legislative history of repeated, unsuccessful attempts to mandate 14th month pay.

Sources rechecked as of: August 10, 2026. Labor law and pending legislation can change — verify current bill status directly with the Senate and House of Representatives, and confirm your own benefit computation against your specific employment contract, company policy, or CBA.

Disclaimer: This article is for general educational and informational purposes only and does not constitute legal, tax, or HR advice. 14th month pay eligibility, computation, and enforceability depend on the specific terms of your employment contract, company policy, or collective bargaining agreement, and on facts that a general guide cannot account for. For advice on a specific situation, consult the Department of Labor and Employment, the Bureau of Internal Revenue, or a Philippine labor lawyer.