The short version
Three things worth knowing about the year-end pay everyone waits for.
Total basic salary earned within the calendar year, divided by 12. Nothing more elaborate than that.
salary × months ÷ 12Employers are required by Presidential Decree 851 to release it on or before December 24 each year.
Dec 24Exempt up to ₱90,000 combined with other bonuses. Anything above that joins your taxable income.
₱90,000 exemptHow it is worked out
one month, roughlyThe rule is one line. Add up the basic salary you earned across the calendar year, then divide by twelve. If you worked the whole year at a steady ₱25,000 a month, your total basic salary is ₱300,000, and your 13th month pay is ₱25,000, one full month. The figure only ties neatly to a single month when you were employed and paid for all twelve.
Join partway through the year and the amount shrinks with it. Someone who started in July and earned ₱150,000 in basic salary by December receives ₱12,500. The same math handles resignations: you still get the pro-rated amount for the months you were there, usually released with your final pay. Only basic salary counts. Overtime, night differential, holiday premiums, and most allowances sit outside the formula unless your company chooses to include them.
The benefit is required by Presidential Decree 851 for rank-and-file employees in the private sector, and it must reach you on or before December 24. The first ₱90,000 of your 13th month pay and other bonuses combined is exempt from tax. Anything past that ₱90,000 joins your taxable income. To see how the exempt portion interacts with the rest of your pay, the income tax calculator and the take-home pay calculator pick up where this one leaves off.
Questions people ask
answered in plain wordsTotal basic salary earned during the year divided by 12. If you worked the full year, it is simply one month of basic salary. If you joined mid-year, it is proportional to the months you actually worked.
The first ₱90,000 of your 13th month pay and other benefits combined is tax-exempt. Only the amount above ₱90,000 is added to your taxable income.
All rank-and-file employees in the private sector who have worked at least one month during the calendar year, regardless of position or employment status. Employers must pay it on or before December 24.
No. The computation uses basic salary only. Allowances, overtime pay, night differential, and holiday premiums are excluded unless your company policy says otherwise.
Yes. A separated employee is entitled to a pro-rated 13th month pay for the months actually worked that year, and it is usually released together with the final pay. Leaving before December does not forfeit it.
No. The 13th month pay is required by law and is a fixed formula. A Christmas bonus is voluntary and set by the employer. If you receive both, they are added together for the ₱90,000 tax-exempt ceiling, and only the amount above ₱90,000 is taxed.
Because the formula uses the total basic salary you actually earned, unpaid absences and leaves without pay lower that total, so the 13th month pay drops in proportion. Paid leaves are already part of your salary and are not deducted.
On or before December 24 each year. Some employers split it, releasing half around mid-year and the rest in December, but the full amount must still reach you by December 24.
Not under Presidential Decree 851, which covers private-sector rank-and-file. Government personnel instead receive a year-end bonus and cash gift under separate rules. This calculator is built for private-sector employees.
No. Every calculation runs privately on your device. Nothing you type is stored, tracked, or sent to a server.
Where these numbers come from
straight from the sourceThe rates and rules on this page follow the official issuances below. When an agency updates a schedule, this is where to confirm the current figure against your own situation.