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As soon as December rolls in, there’s one thing almost every Filipino gets excited about: 13th-month pay.
It’s that little boost you look forward to every year, whether you’re planning your holiday shopping, treating your family, or finally giving yourself something nice. This might even be the perfect time to get that dream phone you’ve been eyeing at the Globe Online Shop.
While employers usually take care of the computation, it still helps to know the basics. Understanding how your 13th-month pay works gives you a clearer picture of what you’ll receive and lets you plan your holiday budget better.
13th-Month Pay Explained
The 13th-month pay is a mandatory benefit given to all rank-and-file employees at the end of the calendar year. It was passed into law on December 16, 1975, after President Ferdinand Marcos signed Presidential Decree No. 851 (PD 851).
Employees must receive their 13th-month pay on or before December 24 each year. Most employers give it at the end of the year. Others choose to release it in two parts, with one in the first half of the year and another in the latter half.
Your 13th-month pay might look a lot like the holiday bonus you get at the end of the year. Unlike a bonus your employer gives voluntarily, the 13th-month pay is required by law.
General DOLE Guidelines on Your 13th-Month Pay
Now that we’ve completely defined what the 13th-month pay is all about, let’s figure out the specifics of this law.
Who’s qualified for a 13th-month pay?
All rank-and-file employees in the private sector are entitled to receive 13th-month pay as long as they have worked for at least one month during the calendar year. This includes regular, casual, contractual, and even resigned or terminated employees.
Who isn’t eligible to receive 13th-month pay?
Employees of government agencies and any political subdivisions aren’t eligible under PD 851. Employees who work for multiple employers, as well as government employees doing part-time work with a private company, are also not covered by the law.
What’s the minimum amount of your 13th-month pay?
Your 13th-month pay is required to be no less than one-twelfth of your base salary. Allowances and other compensation packages aren’t factored into the calculated number. The final amount you receive depends on your months of service with the company and any absences you may have had.
How to Compute Your 13th-Month Pay
As long as you know your total basic salary, you can easily calculate how much you’ll receive. To compute your 13th-month pay, use this formula.
Proportionate 13th-month pay = Total basic salary earned for the year ÷ 12 months
Let’s say you earn ₱25,000 a month. If you rendered service for the entire year, then you’ll get the full ₱25,000 as your 13th-month pay. If you weren’t with your company for the entire year, then your 13th-month pay would be a percentage of how many months you were able to stay with the company.
Below is a quick example of how much money you’d earn for your 13th-month pay if you were able to render work without any unexcused absences for the year, with a base monthly income of ₱25,000:
Months of Rendered Service | 13th Month Pay |
1 Month | ₱2,083.33 |
2 Months | ₱4,166.67 |
3 Months | ₱6,250.00 |
4 Months | ₱8,333.33 |
5 Months | ₱10,416.67 |
6 Months | ₱12,500.00 |
7 Months | ₱14,583.33 |
8 Months | ₱16,666.67 |
9 Months | ₱18,750.00 |
10 Months | ₱20,833.33 |
11 Months | ₱22,916.67 |
12 Months | ₱25,000.00 |
Other 13th-Month Pay FAQs
Still unsure about how the 13th-month pay works? Here are quick answers to common questions.
Can I still receive my 13th-month pay even if I resign?
Yes, as long as you were able to render at least a month’s worth of service to your company. If you worked only a month with your previous employer before leaving, you’ll receive your pro-rated 13th-month pay along with your final pay.
Is my 13th-month pay taxable?
Your 13th-month pay will be subject to tax only if it exceeds a certain amount. Under the TRAIN Law, the tax-exempt threshold increased from ₱82,000 to ₱90,000.
If I go on maternity leave, how will my 13th-month pay be computed?
Your 13th-month pay will be pro-rated based on the months you actually worked. Since maternity leave is a separate benefit, it will be excluded from the computation.
Do employees with multiple employers receive separate 13th-month pays?
Yes, rank-and-file employees with multiple employers can receive a separate 13th-month pay from each one. This applies whether you work full-time or part-time in private companies, including private schools.
Government employees who also have part-time jobs in private enterprises are also covered. Each private employer will compute your proportionate 13th-month pay based on the basic salary you earned from them.
I didn’t receive my 13th-month pay. What should I do next?
If you didn’t receive your 13th-month pay, the first step is to speak with your employer or the Human Resources department to clarify the delay. If no action is taken after you raise the concern, you can call the Department of Labor and Employment (DOLE) 24/7 hotline at 1349, submit your concern through the DOLE Online Query Form, or use the DOLE Online Compliance Portal.
Meaningful Ways to Use Your 13th-Month Pay
Your 13th-month pay can do more than fund holiday gifts. With some planning, you can make it go further and start the new year on a stronger note. Here are practical ways to make the most of it.
Grow Your Savings and Build for the Future
Think of your 13th-month pay as a solid boost toward your financial goals. You can set aside part of it in a high-yield digital bank to grow your savings faster and track your progress easily.
If you want something more long-term and government-backed, you can also explore the Pag-IBIG MP2 program for higher dividends and steady growth over the years.
Lastly, if you’re curious about investing, you can try beginner-friendly platforms to start your investment journey.
Plan a Family Trip for the New Year
If you’d rather spend on experiences, consider using part of your bonus for a memorable family getaway. Whether it’s a local stay or an international destination, thoughtful planning can make your trip smooth and stress-free.
Maximize Your Travel Budget
If you want to use your 13th-month pay for future trips, managing your travel budget wisely can help you enjoy more without overspending. Try booking early, choosing budget-friendly destinations, and using helpful travel apps.
Pay Off Debts to Free Up Your Budget
If you want a lighter financial load next year, you can use part of your 13th-month pay to clear small debts or reduce bigger ones. Even a single lump-sum payment can lower your monthly dues and give you more breathing room for future expenses.
Share Holiday Cheer with Loved Ones
You can also use part of your 13th-month to send aguinaldo to your inaanaks and pamangkins through GCash. It’s quick, convenient, and makes it easy to spread holiday cheer in just a few taps. A little generosity can go a long way, and your 13th-month pay can make the season even brighter for the people you love.
With these options in mind, you can use your 13th-month pay in a way that fits your goals, whether you’re saving or spending on meaningful experiences.
Enjoy a Merrier Holiday with Your 13th-Month Pay
Your 13th-month pay gives you a great opportunity to enjoy the holidays with ease and confidence. Now that you know how it works and how you can use it, you can choose plans that support your goals and the moments you want to celebrate.
Whether you’re growing your savings, creating new memories, or sharing joy with loved ones, your bonus can help you welcome the season feeling inspired and excited.
