How your 13th month pay is computed, when it lands, and how much of it is tax-free.
Effective 2026 (PD 851)13th month pay is a mandatory bonus for rank-and-file employees in the Philippines. The rule is simple: your total basic salary for the year, divided by 12. It must be paid on or before December 24, and it is tax-free up to ₱90,000.
Uses basic salary only — overtime, allowances and night differential are not counted.
Take every peso of basic salary you earned across the year and divide by 12. If you were employed the whole year on a steady salary, that simply equals one month's basic pay. If you started mid-year or had unpaid leave, you divide the smaller total by 12 — so you get a proportionate amount, not a full month.
Your 13th month pay is combined with your other bonuses for the year. The first ₱90,000 of that combined total is tax-free. For most salaried Filipinos the whole 13th month falls under the cap and arrives untaxed — so your take-home equals the full amount.
If the combined total goes over ₱90,000, only the excess is taxed. That excess is added on top of your yearly salary income and taxed at your marginal rate — the same TRAIN brackets your monthly pay uses. So a person already in the 20% bracket pays about 20% on the excess, not on the whole bonus. The calculator above estimates this from your salary and shows your take-home 13th month after tax.
Example: on a ₱100,000 monthly salary the 13th month is ₱100,000. The first ₱90,000 is tax-free, the ₱10,000 excess is taxed at that earner's 25% bracket (about ₱2,500), so the take-home is roughly ₱97,500.
Add up your total basic salary earned from January to December, then divide by 12. If you worked only part of the year, you use the salary you actually earned — the divisor stays 12, so a partial year gives a smaller amount.
It is tax-free up to ₱90,000 when combined with your other bonuses (like a Christmas bonus) in the same year. Only the amount above ₱90,000 is taxed.
On or before December 24, 2026. Employers may pay it in two parts during the year, but the full amount must be given by that date.
All rank-and-file private-sector employees who worked at least one month in the calendar year — full-time, part-time, probationary, contractual or daily-rate. Managerial employees and government workers are covered by different rules.
A bonus is easiest to keep when it has a job before it lands. Sweldo Check shows your real take-home; IponPal helps you plan the rest.
Open Sweldo Check →Know your take-home, then plan it. IponPal maps your pay around your payday cycle — committed, free, and saved.
Reflects Presidential Decree 851 and the ₱90,000 tax-free cap in effect for 2026. Rules can change. For official guidance check dole.gov.ph or bir.gov.ph.