Quick answer: For most workers, 13th month pay is not taxable. Your 13th month pay and other benefits are tax-exempt up to ₱90,000 per year. Only the portion above ₱90,000 is added to your taxable income and taxed at your regular rate. Check if any of yours is taxable →
How the ₱90,000 ceiling works
The ₱90,000 is a combined ceiling for your 13th month pay and other benefits, including:
- 13th month pay
- 14th month pay (if your employer gives one)
- Christmas bonus
- Other productivity and incentive bonuses
Add these up. If the total is ₱90,000 or less, none of it is taxable. If it’s more than ₱90,000, only the excess is taxable.
Worked examples
Below the ceiling
13th month pay ₱30,000, Christmas bonus ₱10,000 → total ₱40,000.
₱40,000 is under ₱90,000, so the entire amount is tax-free.
Above the ceiling
13th month pay ₱80,000, plus a ₱30,000 bonus → total ₱110,000.
- Tax-exempt: ₱90,000
- Taxable excess: ₱110,000 − ₱90,000 = ₱20,000
That ₱20,000 is added to your annual taxable income and taxed under the regular income tax brackets.
Does the excess push me into a higher bracket?
The taxable excess is simply added to your taxable income for the year. Whether it changes your effective tax depends on your total income — use the Income Tax Calculator to see the impact.
Related reading
Sources: National Internal Revenue Code as amended by the TRAIN Law (₱90,000 ceiling); BIR. For estimation only — confirm with your HR department or the BIR.