The formula
13th month pay = total basic salary actually earned during the calendar year ÷ 12. It isn't a flat one-month bonus handed out automatically — it's based on what you actually earned, so it scales down if you didn't work the full year.
You still get it even if you resigned
Under PD 851, any rank-and-file employee who worked at least one month within the calendar year is entitled to a prorated 13th month pay — even if they resigned, were terminated, or went AWOL before December. It's computed the same way: basic salary actually earned, divided by 12. Employers may deduct unreturned company property or documented damages, but they can't withhold the whole benefit just because you didn't finish the year.
13th month pay vs. Christmas bonus
These are often confused, but they're legally different things. 13th month pay is a mandatory, legally required benefit under PD 851 — every qualified rank-and-file employee gets it, no exceptions. A Christmas bonus, mid-year bonus, or performance incentive is typically discretionary, meaning the employer isn't legally required to give it unless it's stated in a contract or CBA, or has become a long-standing, consistent company practice.
Who's entitled — and who isn't
- Entitled: all rank-and-file employees, regardless of position — including part-time, probationary, and resigned employees (prorated).
- Generally not entitled: managerial employees, government employees (covered by separate rules), and employees already receiving an equivalent benefit under an existing scheme.
Payment deadline
- Must be paid on or before December 24 each year.
- Employers may split it: 50% by May 31 and the remaining 50% by December 24.
- If you resign or are terminated mid-year, your prorated 13th month pay is typically released along with your final pay, not held until December.
- Employers must submit a compliance report to DOLE by January 15 of the following year.
Wondering if any of your 13th month pay is taxable?
Check the ₱90,000 Tax Exemption Rule →