FAQ on 13th-Month Pay in the Philippines

13th-month pay is a form of monetary assistance equivalent to the monthly basic compensation received by an employee, computed pro-rata according to the number of months within a year that an employee has rendered service to an employer (basic monthly pay/12 x number of months actually worked).

Who are entitled to 13th month pay?

All rank and file employees, regardless of status, who have worked for at least one (1) month are entitled to receive 13th month pay.

What if I already worked for one month and I resigned thereafter?

An employee who has resigned or whose services were terminated at any time before the time for payment of the 13th month pay is entitled to 13th month pay, in proportion to the length of time he worked during the year. The formula is: (basic monthly pay/12) x (number of months actually worked). The 13th month may be demanded at the time of effectivity of the resignation/termination. That doesn’t have to be December 24.

Who are rank-and file employees?

All employees not considered as managerial employees are considered rank-and-file employees. A managerial employee, as distinguished from a rank-and-file employee, is one who is vested with powers of prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall discharge, assign or discipline employees, or to effectively recommend such managerial actions.

Is there a cap, i.e., only those receiving a salary below P1,000 may receive 13th month pay?

Prior to 1986, only those who receive a monthly salary of not more than PhP1,000 are entitled to receive 13th month pay. This cap was removed under Memorandum Order No. 28 issued by former President Corazon Aquino.

When must it be paid?

The 13th month pay shall be paid not later than December 24 of each year. An employer, however, may give to his employees one half (½) of the required 13th month pay before the opening of the regular school year and the other half on before the 24th of December of every year. The frequency of payment of this monetary benefit may be the subject of agreement between the employer and the recognized/collective bargaining agent of the employees.

Can the employer withhold payment of the 13th month pay?

No, the payment of 13th month pay is mandatory, specifically provided under Presidential Decree (P.D.) No. 851. In case of non-payment of 13th month pay, covered employees could complain at the Department of Labor and Employment (DOLE)  or the National Labor Relations Commission (NLRC).

Are there employers who are exempted from paying 13th month pay?

Yes. The following employers are not required to pay 13th month pay under P.D. 851, unless the grant thereof have become a policy or practice:

a. The Government and any of its political subdivisions, including government-owned and controlled corporations, excepts those corporations operating essentially as private subsidiaries of the Government.

b. Employers already paying their employees a 13th month pay or more in a calendar year or its equivalent at the time of this issuance.

c. Employers of household helpers and persons in the personal service of another in relation to such workers.

d. Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis in which case the employer shall grant the required 13th month pay to such workers.

Who are those paid on a piece-rate basis?

They are workers paid a standard amount for every piece or unit of work produced that is more or less regularly replicated, without regard to the time spent in producing the same.

What if I work in more than one company?

Workers who work in two or more companies or private employers, whether on full or part time basis, are entitled to the required 13th month pay from all their private employers regardless of their total earnings from each or all their employers.

Is it part of the Company bonus?

No. The payment of 13th month pay is mandated by law. It is separate from any other bonus given by the company. Read the previous discussion.

Is 13th month pay taxable?

No, as long as the amount does not exceed P90,000. Only the excess amount is taxable. In 2015, the allowable exclusion from gross income, in terms of 13th month pay and other benefits, was increased from P30,000 to P82,000 under Republic Act No. 10653 (see also BIR Revenue Regulation No. 3-2015). This amount was again increased to P90,000 under Republic Act No. 10963, also known as the Tax Reform Acceleration and Inclusion (TRAIN) Law.

Atty.Fred

65 thoughts on “FAQ on 13th-Month Pay in the Philippines

  1. Avatarbilly_billano

    here is a sample of what my employer sent me as a computation of my 13th month pay, what is the proper way of computing this if i was employed October 2010 till December 2010 with a 15000 salary then January 2011 till May 2011 with a 20000 salary

    Monthly Basic 15,000.00
    Monthly Allowance 5,000.00
    Total Monthly Salary 20,000.00

    Final Pay Computation

    Payroll Date Basic Pay

    15-Jan-11 7,500.00
    31-Jan-11 7,500.00
    15-Feb-11 7,500.00
    28-Feb-11 7,500.00
    15-Mar-11 7,500.00
    31-Mar-11 7,500.00
    15-Apr-11 6,136.36
    30-Apr-11 5,454.55
    15-May-11 7,500.00
    31-May-11 4,772.73

    TOTAL BASIC PAY 68,863.64

    13th MONTH PAY 5,738.64

    *note : they did not include 2010 salaries

    I hope you can help me, Thank you very much

    Reply
  2. Avatarkissha

    GREETINGS! need a help on how to compute my 13th month pay..i started working May 16, 2011 until now…

    pay date basic salary:

    may 30, 2011———4,500.00
    june 15, 2011——–4,500.00
    june 30, 2011——–4,500.00
    july 15, 2011——–4,750.00
    july 30, 2011——–4,750.00
    aug.15, 2011———4,750.00
    aug.30, 2011———5,250.00
    sept.15,2011———5,250.00
    sept.30,2011———5,250.00
    oct.15,2011———-5,250.00
    oct.30,2011———-5,250.00
    nov.15,2011———-5,250.00

    TOTAL : P59,250/12 = P4,937.50 do i need to multiply this into 6 months or 7 months? pls help me i need your help ASAP…do i need to subtract our basic salary to our benefits? let say my basic salary i received for the month of june 15 is P4,500 minus SSS and PHILHEALTH = P4,391.65? tnx

    Reply
    1. Avatarpheejay

      Atty, good day, i have a question, i would like to know if the 13month and bonus are part of the child support computation? i mean aside for the regular fix amount monthly child support because my ex wife dnt have any agreement regarding about the bonuses and 13mo just only the monthly fix support. if so, how much should i gave her? coz honestly, im willing to give him part of my bonuses just for the kid but she asking too much, she want 1month equal to the child support im giving her regularly because she insist its 13mo…. hope you can help me… thanks in advance

  3. Avatarhearsnool

    SOS! need to clear up my questions about 13th month pay,
    I have stayed for 2 yrs and 5 months in this company where I’m working now.
    But due to some reasons, I rendered my resignation which the effectivity is on November 29, 2011.
    Now the things that bother me a lot is that the HRD told me that I can receive my 13th month pay and last pay a month after of my resignation. Is it right? Cos as far as I know 13th month pay shall be paid or should be given not later than December 24 of each year. When should I get my 13th month pay?
    I also heard from other former colleagues that the computation of their 13th month pay is base on their net income not their gross income, is it right?
    Please help me to understand about this matter. I’m leaving this company soon so I really want to know what the things I should do :(.

    Reply
  4. AvatarJONG

    SOS, OUR COMPANY DELAYED GIVING OUR 13TH ,MONTH PAY THEY NOTICE US THAT 13TH MONTH PAY WILL BE RELEASED BY JANUARY, IT IS VIOLATED BY THE LAW, ITS TRUE, WHAT CAN WE DO TO COMPLY WITH THEM

    Reply
  5. Avatarantonio

    question…if an employee was terminated because of awol…should the management give her 13th month even though she was terminated with cause? thanks

    Reply
  6. Avatareloyjeff15

    Hi I hope anyone could help me. I started working last October 3, 2011 with a minimum salary a day and two rest day per week. Will I still get a 13th month pay? If in case i will can you tell me the amount? I really don’t have an idea how to compute it. Thank you very much. Hope to hear from you guys. 🙂

    Reply
  7. AvatarJuz4lafs

    How should the withholding tax of the 13th month be computed. Specifically the amount going over P30,000? Should that amount be added to the December taxable Income? Or should it be on a separate pay slip? The computation differs on theses 2 options.

    ie: A monthly income of PhP40,000

    Should it be computed together?
    Taxable: 40,000 + 10,000(amt over 30k of 13th mnth)

    OR

    Should it be computed separately?

    Taxable: 40,000 (for December pay slip)
    Taxable: 10,000 (13th month pay slip)

    Using the calculator returns different results when done either way. Smaller for withholding tax for separate slips.

    Thanks!

    Reply
  8. Avatarmackenzie

    Good day! Our company gave our 13th mo. pay last December 23, 2011 as well as our salary for December 30 (we are all regular employees with a length of service ranging from 4yrs and above)..unfortunately we just received half of the actual 13th mo. pay…remaining half will be given on the 9th – 16th of January 2012 as per management. It is already January 15 but no 13th mo. pay (half) yet. Is there any legal action we can do to claim such? and it is still legal for the company to release the other half after December 24th? Thank you!

    Reply

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