How to Compute Your 13th Month Pay the Easy Way (2026)

Your 13th month pay is due on or before December 24. You don't need a spreadsheet to estimate it. If your salary stayed the same all year, it takes one division and one multiplication.

Under Presidential Decree No. 851, the 13th month pay is one-twelfth of the basic salary you earned during the calendar year. Most employers count from January to December, so that's the period used below.

The shortcut

Divide your monthly basic salary by 12. The result is how much 13th month pay you earn for every month you work:

Monthly basic salary ÷ 12 = 13th month pay earned per month

Then multiply that by the number of months you worked this year:

Earned per month × months worked = your 13th month pay

That's the whole method. The examples below use a ₱20,000 monthly salary.

Example 1: You worked the whole year

Start by finding how much you earn per month toward your 13th month:

₱20,000 ÷ 12 = ₱1,666.67 per month

You worked all 12 months, January to December:

₱1,666.67 × 12 months = ₱20,000

If you worked the full year and your salary didn't change, your 13th month pay equals one month's basic salary.

Example 2: You started in April

You still earn ₱1,666.67 for every month worked. You just have fewer months, April to December:

₱1,666.67 × 9 months = ₱15,000

New hires get the 13th month too. Under the law, rank-and-file employees only need to have worked at least one month in the year to be entitled to it. Managers aren't covered by the law, but many companies give it to them anyway.

Example 3: You got a raise in July

If your salary changed during the year, the shortcut doesn't work. Add up the basic salary you actually received, then divide by 12.

Say you earned ₱18,000 a month from January to June and ₱20,000 from July to December:

₱18,000 × 6 months = ₱108,000
₱20,000 × 6 months = ₱120,000
Total basic salary = ₱228,000

Then divide the total by 12:

₱228,000 ÷ 12 = ₱19,000

Example 4: You had unpaid absences

Leave without pay reduces the basic salary you earned, so it also reduces your 13th month. Say you had ₱3,000 in unpaid absences during the year:

₱20,000 × 12 months = ₱240,000
₱240,000 − ₱3,000 = ₱237,000 basic salary earned

Then divide by 12:

₱237,000 ÷ 12 = ₱19,750

Paid leave doesn't reduce it. Paid sick leave and vacation leave still count as salary earned.

What counts as "basic salary"

Only your basic pay goes into the computation. According to DOLE's implementing guidelines, these are usually left out:

• Overtime pay
• Holiday and rest day premiums
• Night shift differential
• Allowances such as rice, transportation and meal allowances, unless your contract treats them as part of your basic salary

If you're paid a daily rate, add up the basic pay you actually received for the year and divide by 12.

What if you resign before December?

You still get a 13th month pay, pro-rated to the months you worked. It's usually released with your final pay. If you leave at the end of August after a full year at ₱20,000:

₱1,666.67 × 8 months = ₱13,333.33

Is it taxed?

Usually not. Under the TRAIN Law, your 13th month pay and other benefits such as a Christmas bonus are tax-free up to ₱90,000 combined for the year. Only the amount above ₱90,000 is added to your taxable income. At ₱20,000 a month, you're well under the limit.

A note on employers

This is the legal minimum. Some companies use a different cutoff, such as December to November, so payroll can process it in time, and some pay it in two halves, one in June and one in December. Both are allowed as long as you get the full amount by December 24. Check with HR if your payslip doesn't match.

To check your numbers, including for a mid-year raise or unpaid leave, use the 13th Month Pay Calculator.