All about 13th Month Pay Computation

This article will show you how to calculate your 13 month salary in the Philippines. If you haven’t received your 13 month salary, you can always count on Digido for a quick loan. You must be a Filipino citizen from 21 to 70 years old and provide 1 valid ID. And in 15 minutes the money will be in your pocket!

How to Compute Your 13th Month Pay in the Philippines?

Published: January 29, 2021. Last updated: June 22, 2022

Written by: Sean Martin D. Plantado | Reviewed by: Rafael Hular

Key takeaways:

  • The 13th month pay is a source of extra income for employees who have shown loyalty to the company.
  • However, many employees do not understand how to calculate it.
  • In this article, we will show you an example of how to calculate your 13th month pay.
  • If you haven’t received your paycheck for month 13 you can always rely on Digido for a quick loan.

The 13th month pay in the Philippines is one of the most anticipated pays of the year. Contrary to popular belief, it is not a bonus. It is rather the right of an employee. Today, you will learn all you have to know about the 13th month pay and how to calculate your 13th month pay.

What Is 13th Month Pay in the Philippines?

The 13th month pay is a mandated compensation for private employees in the Philippines. It is a monetary benefit where the employer gives one month’s worth of salary to an employee every December of the year.

The thing is that the 13th month pay is not always equal to a month of salary. It is calculated according to the number of months you have worked for your current employer.

Take note that the 13th month pay is only based on your basic income. It is not calculated based on your bonuses and employment allowances. The 13th month pay is only computed from the time that you were employed, so it can get confusing.

Do not worry, we will teach you how it is computed.


  • Is 13th month pay prorated Philippines?
    Even when you leave the company, you are entitled to 13 months of salary . This is also known as 13-month pro rata pay, which is paid to a permanent employee who has worked less than 12 months.
  • Is 13th month pay taxable Philippines?
    The 13thmonth pay is exempt from tax, up to a limit of PHP 90,000 (US$1,778) and is mandatory.
  • What is the rule for 13th month pay?
    The required 13-month payment is due no later than December 24 of each year. An employer may give its employees half of the required 13 months' pay before the start of the regular school year and the other half by December 24 of each year.

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13th month pay history in the Philippines

By virtue of Presidential Decree No. 851, private employers in the Philippines are required to give out 13th month pay to all rank and file employees who have worked at least a month in the company. This was introduced in 1975 by President Ferdinand Marcos, who is considered the author of 13th month pay.

The meaning of 13th month pay is additional monetary compensation given to employees at the end of the year. This is given out regardless of their employment status or how they receive their wages. 13th month pay must be awarded by December 24 each year.

This is not similar to a Christmas bonus: the former is mandatory, while the latter is discretionary. It is up to your bosses if they will give out a Christmas bonus in the Philippines for 2022. Your midyear bonus and Christmas bonus computations will also depend on your employer.

Do note that the 13th month pay is taxable only if it exceeds Php 90,000.

Who are the ones entitled to 13th month pay?

Per the guidelines set by the Department of Labor and Employment (DOLE), rank-and-file employees from the private sector are entitled to a 13th month pay provided that they worked for the company for at least a month during the entire year.

Those in managerial positions are unfortunately not eligible for this pay. The same applies to employees with distressed employers, household workers, and those earning on a commission or task basis.
Government employees are also not entitled to receive 13th month pay.

How to Compute 13th Month Pay?

The 13th month pay is 1/12 of your salary. In essence, the 13th month pay is equivalent to your basic salary multiplied by the number of months you worked for the company.
The 13th month pay is given no later than the 24th of the month, which means that the employer will assume that you have worked the entire month of December to be able to compute it.
The formula for the computation of 13th month pay in the Philippines is the following:

(Basic salary x months worked) / 12 months

Let us say that your basic salary per month is ₱20,000. If you worked from September to December, then you have worked for 3 months.
The calculation will be the following:

₱20,000 x 3 months = ₱60,000;
₱60,000 / 12 = ₱5,000.

Your 13th month pay, not including your salary for the month of December, is ₱5,000. Remember that if your salary includes the allowance, bonuses and commissions, they are not part of the calculation.
In the next section, we will be calculating 13th month pay based on different scenarios. Below we give an example of how to calculate the 13th month salary for day rate employees.

Basic monthly salary ₱20,000
Daily rate ₱1,000
Date started May 2, 2021
Length of employment for the calendar year (by December 31) 8 months
Unpaid leave 3 days
Total annual income (minus unpaid absences) ₱157,000
13th month pay 13,083

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How to compute 13th month pay for 6 months

Here is the basic formula for calculating your 13th month pay:

Total basic salary earned during the year / 12 months = 13th month pay

Your monthly basic salary refers to the amount that your employer pays you for your services. This does not include overtime pay, cost of living allowances, unused leaves, night shift differential, et cetera.
You also have to consider your employment length, or the number of months that you have worked in a company for a calendar year. For example, if you were employed or have worked for a company from April to October, then your employment length is six months.

If you’ve been an employee for 6 months, here’s how you would compute your 13th month pay. We’re going to use the example above (employee from April to October). If your monthly salary is Php 30,000, your 13th month pay is:

(Php 30,000 x 6 months) ÷ 12 months = Php 15,000

Because you did not work for the company for the whole calendar year, you will only receive a prorated amount based on the number of months you worked. So based on the sample computation above, your monthly salary of Php 30,000 will be multiplied by 6 since you only worked from April to October. But it will still be divided by 12 months so you get Php 15,000.

How to compute 13th month pay for resigned employees

What if you have resigned from the company? How much would you receive as 13th month pay?

Resigned and terminated employees are still entitled to their 13th month pay, so no need to worry if you decided to leave before the end of the calendar year. This will be given to you as part of your back pay or final pay.
If you have resigned, your 13th month pay formula will be based on your monthly salary multiplied by the number of months you worked, divided by 12 months. For example, your previous salary was Php 40,000/month and you worked for the company for 10 months. The formula will be:

(Php 40,000 x 10 months) ÷ 12 months

Going by this, your 13th month pay will be Php 33,333. If you have resigned, you will receive this as part of your final pay.

What is not included in the 13th month pay computation

Do note that only your monthly salary will be considered for your 13th month pay. In general, benefits and allowances that are not integrated into your basic monthly salary will not be included in the 13th month pay computation. These include:

  • Cost of living allowance (COLA)
  • Profit-sharing payments
  • Cash equivalent of unused sick and vacation leaves
  • Overtime pay
  • Premium pay
  • Night shift differential
  • Holiday pay
  • Maternity benefits

The benefits mentioned above will only be included in your 13th month pay IF they have been integrated into your basic monthly salary in the first place.

Example of 13th Month Pay Computation for 2022

Earlier, we showed you the basic way of how to compute 13th month pay for 2022 in the Philippines. It is pretty much straightforward. But what if you have absences and leaves? How to compute 13th month pay with absences and late?
What we will compute in this section is an example for an employee who has earned different amounts in several months. This is called prorated 13th month calculation.
Let us take the scenario below, how to compute prorated 13th month pay:

January – ₱20,000
February – ₱20,000
March – ₱15,000
April – ₱25,000
May – ₱20,000
June – ₱13,000
July – ₱32,000
August – ₱19,000
September – ₱20,000
October – ₱13,000
November – ₱13,000
December – ₱20,000

The basic pay of this employee is ₱20,000 per month. On some occasions, the employee did not earn the full amount because he had unpaid absences. In some months, he earned more than ₱20,000 because he rendered overtime.
Take note that the salary presented is just the basic pay, and does not include other pays like bonuses, sales commissions, and others.

Now, the 13th month pay computation for 2022 is like this: simply add all the amounts, and then divide it by 12.

Our prorated 13th month pay calculator will show this result: ₱230,000 / 12 = ₱19,166.67

This method is used on how to compute 13th month pay with absences, even for 13th month pay where you have earned extra because of the overtime rate for 2022 in the Philippines .
Since the 13th month pay is computed by December 15, the assumption of the company is that you will work for the entire month of December.
If you want to calculate yours, you can search online for a website that has the calculator or software for computing 13th month pay.

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Example of 13th month pay computation for 2022 (no deduction)

We’re going to show you a sample 13th month pay computation for 2022. Your 13th month pay should not be less than ½ of the total basic salary that you have earned within the calendar year.

As mentioned above, benefits such as overtime pay and COLA are not included in the 13th month pay unless these have already been integrated into your basic salary.

We’re going to remind you about the formula: you have to multiply your basic monthly salary by the number of months that you worked in a calendar year, then divide that number by 12. Here is a visual version:

Total basic salary earned during the year / 12 months = 13th month pay

For the sample computation, we’re going to use an employee who has been working on a Php 40,000 basic monthly salary for the whole year, without deductions.

Month Attendance Basic salary
January  No absences Php 40,000
February  No absences Php 40,000
March  No absences Php 40,000
April  No absences Php 40,000
May  No absences Php 40,000
June  No absences Php 40,000
July  No absences Php 40,000
August  No absences Php 40,000
September  No absences Php 40,000
October  No absences Php 40,000
November  No absences Php 40,000
December  No absences Php 40,000
Total basic salary earned during the year: Php 480,000
13th month pay: Php 480,000/12 =
Php 40,000

Since this person did not incur any absences for the whole calendar year, their 13th month pay will not reflect any deductions. This person’s 13th month pay will be Php 40,000, assuming no deductions.

13th-Month Salary FAQ

There are many questions about the 13th month pay in the Philippines, and we deemed it best to address some of those common questions here.

✓When should I get the 13th month pay?

It has to be distributed to the employees no later than the 24th of December.

✓Is the 13th month pay mandatory for 2022 according to DOLE?

Yes, it is mandatory for 2022.

✓Can I still get 13th month pay if I resign?

Yes, you are entitled to get this, and the 13th month pay will be given to you as part of your backpay.

✓How much is the 13th month pay of the employee?

The calculation is the same; but of course, the total salary that will be divided by 12 is lesser since you have resigned.

✓Who has the right to get a 13th month pay?

Every employee who has been an employee for at least one month before the 13th month pay distribution is entitled regardless of rank or pay grade.

✓What is the 13th month pay payslip format?

Your 13th month payslip will show the amount of your 13th month plus any deductions.

✓What is a basic salary?

Basic salary is your base rate that is your entitlement. It does not include commissions and bonuses.

✓Is the 13th month pay taxable?

The 13th month pay is taxable if it exceeds Php 90,000.

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The Best Ways to Spend Your 13th Month Pay

Here are some of the best ways to spend your 13th month pay in the Philippines:

1. Buy gifts – 13th month pay is typically used to buy gifts for children and other loved ones. Yes, you can splurge, but do not use all of it. It is also common for 13th month pay to spend it on gadgets such as new phones and tablets.

2. Invest – you can use your 13th month pay to invest in financial vehicles such as mutual funds and the stock market. This is the best time of the year to stock up on your investment and let your money grow.

3. Save as cash – the last thing you can do is just to save it as cash in your bank account. After all, if you have lived for 12 months with no extra money, you can do the same during the holidays.

There is really no right or wrong way to spend your 13th month pay. It is money that you earned, and you have all the right to spend it the way you want to. However, it is still sound financial advice to leave some and invest this money so it can grow.

What to Do if You Don’t Get 13th Month Pay

If you did not get a 13th month pay, you need to file a report to the Department of Labor and Employment or DOLE. You will know how to compute 13th month pay with DOLE help and will get all the benefits you are entitled to under the law. The 13th month pay is a mandatory benefit. In fact, the Philippine Senate is now advancing the 14th month pay. All employees are entitled to get a 13th month pay, provided that they have worked at least one month in the company.

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Emergency Loan in Digido

If you did not get your 13th month pay, or if your salary plus your 13th month pay are not enough, you could always get a loan, so you do not have to spend Christmas with no money. One thing you could look at is Digido. It is an online establishment that offers loans to those who qualify.

Here are the benefits of getting a loan from Digido:

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14th month pay in the Philippines

Apart from the 13th month pay, the Philippines has a Senate bill that proposes a mandatory 14-month wage for all workers. The author of the bill wants the 14th month pay approved for all officially employed Filipinos. Regardless of employment status, workers in public and private companies will be paid their 13-month salaries no later than June 14 and their 14th month salaries no later than December 24.
How to compute 14th month pay? The calculation of pay for month 14 is the same as for month 13. The minimum wage for the 14th month is at least half of the employee’s total basic pay. Under the 14th month pay law the bonus will be available to all employees who have been with the company for at least one month during the calendar year.

14th month pay for government employees 2022

Since the government has not yet passed a law requiring employers to give out 14th month pay, government employees are not yet entitled to receive 14th month pay. However, they can receive midyear, Christmas and other special bonuses as their bosses deem fit.
As for private employees, the awarding of bonuses other than the 13th month pay will depend on their employers as well. The amount that they will receive will depend on their bosses and/or their performance.

14th month pay release

Employees from the government and private companies alike will have to wait for the law to be passed in order to officially receive any mandatory 14th month pay. For now, this special bonus will only be released to employees depending on the discretion of their employers.

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Written by: Sean Martin D. Plantado

Author pages:
Sean Martin Plantado is the head of Customer Care Dept. and Online Sales Dept. of Digido Finance Corp. creating articles, blogs, and other learning mediums that helps Filipinos struggling on their financial literacy. Sean also loves Cycling, Photography, Cinematography, Online gaming, Fine Arts, and dreams of becoming a Doctor of Veterinary Medicine.

Reviewed by: Rafael Hular

Author pages:
Rafael “Raffy” L. Hular is, the Finance and Accounting Manager. of Digido Finance Corp., monitoring and controlling the flow of cash that comes in and out of the company to meet the company’s business needs, preparing the financial reports and analysis of income and expenses, and monitoring tax compliance.  Raffy loves reading Japanese comics called manga and watching Japanese animated cartoon series. He dreams of establishing his own Accounting and Auditing Firm and teaching in a University.