Quick answer: Your 13th month pay equals your total basic salary earned during the calendar year divided by 12. If you worked the full year on a ₱30,000 monthly basic salary, you get ₱30,000. If you started late, left early or had unpaid absences, you get a smaller prorated amount. It is due on or before December 24, and the first ₱90,000 of 13th month pay and other benefits is tax-free. Compute yours instantly with our 13th Month Pay Calculator →
The 13th month pay formula
13th Month Pay = Total Basic Salary Earned in the Calendar Year ÷ 12
This comes from Presidential Decree No. 851 and DOLE’s Revised Guidelines on the 13th month pay law, which set the minimum at one-twelfth of the basic salary earned in the calendar year. Your employer can always pay more, never less.
The key word is earned. The divisor never changes; what changes is the total on top. Start in July and you earn six months of salary, so you get six-twelfths of a full 13th month pay.
What counts as basic salary (and what does not)
| Item | Counts toward 13th month pay? |
|---|---|
| Regular monthly or daily wage | Yes |
| Paid leave you used (vacation, sick) | Yes |
| Salary differential paid during maternity leave | Yes, it is pay for that period |
| Commissions that are part of your regular pay (see below) | Often yes |
| Overtime pay | No |
| Night shift differential | No |
| Holiday and premium pay (rest day, special day work) | No |
| Cost-of-living allowance and other allowances | No |
| Cash conversion of unused leave | No |
| Unpaid absences, lates, undertime | They reduce the total |
The exclusions apply unless your employment contract, collective bargaining agreement or established company practice treats the item as part of your basic salary. DOLE’s annual advisory repeats the same list. If your payslip has a “basic” line, that is usually the figure to use.
Worked examples
1. Full year, fixed salary
Monthly basic salary ₱30,000, worked all 12 months: (₱30,000 × 12) ÷ 12 = ₱30,000.
2. Hired mid-year
Hired on August 1 on ₱25,000 a month, still employed in December. You earned 5 months of salary (August to December): (₱25,000 × 5) ÷ 12 = ₱10,416.67.
If you started mid-month, prorate the first month by days. Hired September 14 on ₱35,000: September counts as 17/30 of a month, plus October, November and December, so 3.57 months. ₱35,000 × 3.57 ÷ 12 ≈ ₱10,403. Payroll rules for partial months vary (calendar days, working days, 15-day cut-offs), so your employer’s figure can differ by a few pesos. See also: prorated 13th month pay.
3. Resigned before year end
Earning ₱28,000 a month and your last day is October 31: ₱28,000 × 10 = ₱280,000, ÷ 12 = ₱23,333.33. You are still entitled to it, and it should be included in your final pay. Details: prorated 13th month pay for resigned employees.
4. Unpaid absences
₱30,000 a month, with 8 unpaid absences. At a daily rate of about ₱1,364 (₱30,000 ÷ 22 days), the deduction is roughly ₱10,909. Total earned = ₱360,000 − ₱10,909 = ₱349,091, so 13th month pay is ₱29,091. Full guide: 13th month pay with absences.
5. Salary changed during the year
₱20,000 a month from January to June and ₱24,000 from July to December: (₱20,000 × 6) + (₱24,000 × 6) = ₱264,000. ÷ 12 = ₱22,000. Averaging the two salaries gives the same answer here only because the split is even, so add the actual months.
6. Variable or commission-based pay
Whether commissions count depends on what they are. DOLE’s guidelines say workers paid a fixed or guaranteed wage plus commission are covered on both parts. The Supreme Court has counted salesmen’s commissions as basic pay in Philippine Duplicators v. NLRC (G.R. No. 110068, 1995), but excluded productivity-type commissions and bonuses in Boie-Takeda Chemicals v. De la Serna (G.R. No. 92174, 1993). Employers whose workers are paid purely on commission, boundary or task basis are exempt from PD 851.
Example, if your commission is part of your regular pay: ₱15,000 fixed pay × 12 = ₱180,000, plus ₱60,000 commissions earned in the year = ₱240,000. ÷ 12 = ₱20,000. If your employer treats the commission as a bonus instead, only ₱180,000 ÷ 12 = ₱15,000 is the base. Ask HR which applies to you.
7. Daily-paid and minimum-wage earners
Multiply the daily rate by the days you were paid (including paid regular holidays and paid leave), then divide by 12. In Metro Manila the non-agriculture minimum wage rose from ₱695 to ₱755 a day on September 26, 2026 (Wage Order NCR-28). A Monday-to-Friday worker paid for all 261 weekdays of 2026 had 192 days at ₱695 and 69 days at ₱755:
- (192 × ₱695) + (69 × ₱755) = ₱133,440 + ₱52,095 = ₱185,535
- ₱185,535 ÷ 12 = ₱15,461.25
This simplifies by treating every weekday as paid; special non-working days you did not work are normally unpaid. See the current rates in NCR minimum wage.
Is 13th month pay taxable?
The first ₱90,000 of your 13th month pay and other benefits (14th month pay, Christmas bonus, productivity incentives) is tax-exempt each year under Section 32(B)(7)(e) of the tax code as amended by RA 10963 (TRAIN). Only the excess is added to taxable income. Most workers never reach it. Examples: is 13th month pay taxable.
Deadline and who is entitled
- Deadline: on or before December 24. DOLE’s annual advisory says employers must pay on time and has not allowed deferrals.
- Covered: all rank-and-file employees, regardless of position or how they are paid, who worked at least one month during the year.
- Not covered by PD 851: managerial employees, household helpers (kasambahay have their own rule under RA 10361), employers already paying an equivalent, and the government. Government workers get a year-end bonus instead; see 13th month pay for government employees.
Do it in seconds
Type your salary, start and end dates, or daily rate and the calculator does the proration, the absences and the ₱90,000 check for you. Open the 13th Month Pay Calculator →
Related reading
- Prorated 13th month pay for new hires and resignations
- 13th month pay with absences
- Is 13th month pay taxable?
- 14th month pay in the Philippines
Sources: DOLE and Presidential Decree No. 851; DOLE Revised Guidelines on the 13th month pay law and the annual Labor Advisory; RA 10963 via BIR (tax exemption); NWPC (minimum wage). For estimation only — confirm with your HR department.