What 13th month pay is and how to calculate it
13th month pay is an extra month's salary paid to employees in the Philippines, usually in November or December. It is not a bonus — it is a mandatory benefit under Philippine labor law. The basic calculation is straightforward: divide your annual gross salary by 12, then multiply by the number of months you worked that year.
The formula is: (Annual Gross Salary ÷ 12) × Months Worked = 13th Month Pay. If you worked the full year, you divide your total earnings by 12 and that is your 13th month pay. If you started mid-year or left before December, you count only the months you were actually employed.
Your annual gross salary includes your base pay plus all regular allowances — transportation allowance, meal allowance, hazard pay, or any other allowance you receive every pay period. It does not include bonuses, commissions, or overtime pay unless those are part of your regular monthly compensation.
Key Takeaways
- 13th month pay equals one month's gross salary divided by 12 months, then multiplied by the number of months you worked in the calendar year.
- Your gross salary for the calculation includes your base pay and all regular monthly allowances, but not bonuses or overtime unless they are may provide every month.
- If you worked fewer than 12 months, count only the months you were actually employed — even one month of work entitles you to a proportional 13th month payment.
- Employers must pay 13th month pay by December 24 each year, though some companies pay it earlier or split it across two payments.
- If your employer does not pay 13th month pay, you can file a complaint with the Department of Labor and Employment (DOLE).
Step-by-step calculation for a full-year employee
Start by adding up all your gross monthly income for the entire year. This includes your base salary plus every regular allowance you receive — transportation, meal, clothing, hazard pay, or any other allowance that appears on your payslip every month. Do not include overtime pay, bonuses, or commission unless you receive it every single month without fail.
Once you have your total annual gross income, divide it by 12. This gives you your average monthly gross salary. That number is your 13th month pay. For example, if your annual gross is ₱240,000, your 13th month pay is ₱240,000 ÷ 12 = ₱20,000.
Some employers calculate it differently: they take your most recent monthly gross salary and pay that as your 13th month. This method is faster but may not be accurate if your salary changed during the year. The law-compliant method is to average the full year.
How to calculate 13th month pay if you did not work the full year
If you started your job mid-year or left before December, you are still may have access to to 13th month pay for the months you worked. Count only the months you were actually employed, even if it was just one month.
The calculation is the same formula: add up your gross income for the months you worked, divide by 12, then multiply by the number of months you were employed. For example, if you earned ₱180,000 over nine months of work, your 13th month pay is (₱180,000 ÷ 12) × 9 = ₱135,000.
If you left your job before December, your employer must still pay your 13th month pay by the time you leave — or at least by the next regular payday. If they do not, you can include it in a claim with DOLE.
What counts as gross salary and what does not
Include in gross salary: base pay, transportation allowance, meal allowance, clothing allowance, hazard pay, night shift differential, and any other allowance you receive every pay period. These are considered part of your regular compensation.
Do not include: bonuses (Christmas bonus, performance bonus, productivity bonus), commissions, overtime pay, holiday pay, separation pay, or any payment that is not part of your regular monthly payslip. Even if you received a bonus every year, it is not part of the 13th month calculation unless it is may provide in writing as part of your monthly salary.
If you are unsure whether something counts, check your employment contract or ask your HR department. Your payslip should clearly separate regular allowances from bonuses and overtime.
When employers must pay 13th month pay
By law, employers must pay 13th month pay on or before December 24 each year. Some companies pay it earlier — in November or even October — and some split it into two payments (half in November, half in December). Your company policy should state when you will receive it.
If you leave your job before December, your employer must pay your proportional 13th month pay by your last day of work or by the next regular payday, whichever comes first. Do not wait until December to ask for it if you have already left.
If your employer misses the December 24 important date, that is a violation of the Labor Code. You can file a complaint with DOLE or with your company's HR department first. Keep copies of your payslips and employment contract as proof of your salary.
Common mistakes in 13th month pay calculations
The most common mistake is including bonuses or overtime in the calculation. A Christmas bonus is not part of 13th month pay — it is a separate benefit. If your company gives you both, you receive both, but they are calculated differently. Only regular monthly allowances count toward 13th month pay.
Another mistake is miscounting the months worked. If you started on January 15, you still count January as a full month of work for 13th month purposes. You do not need to work a full calendar month to count it — any work in that month counts. The same applies if you left mid-month.
Some employees forget to include all their allowances. Check your payslip carefully. If you receive a transportation allowance, meal allowance, or any other regular allowance, it must be included in the gross salary used for the calculation.
What to do if your employer does not pay 13th month pay
If your employer refuses to pay or claims you are not may have access to to it, you have legal recourse. 13th month pay is mandatory under Philippine labor law for all employees, regardless of company size or industry. The only exception is if you worked fewer than one month in the year.
Start by requesting it in writing from your HR department or manager. Keep a copy of your request. If they do not respond within a reasonable time, you can file a complaint with the Department of Labor and Employment (DOLE). You will need copies of your payslips, employment contract, and your written request.
You can also file a case with the National Labor Relations Commission (NLRC) if DOLE does not resolve it. Bring your payslips and any written communication with your employer. The process is free, and you do not need a lawyer, though having one can help.
Frequently Asked Questions
Do I get 13th month pay if I was on unpaid leave for part of the year?
No. 13th month pay is calculated based on the months you actually worked and were paid. If you took unpaid leave, that month does not count toward your 13th month pay. Only months during which you received a salary count.
What if I received a salary increase during the year?
Use the salary you actually earned each month. Add up all 12 months of gross income (at whatever rate you were earning each month), divide by 12, and that is your 13th month pay. If you got a raise in June, your January–May salary is lower than your June–December salary, and both are included in the total.
Can my employer deduct taxes from my 13th month pay?
No. 13th month pay is exempt from income tax under Philippine law. Your employer cannot deduct income tax from it. They can deduct other legal obligations like SSS, PhilHealth, or Pag-IBIG contributions if those are normally deducted from your salary, but not income tax.
What if I was promoted and my salary changed mid-year?
Use the actual gross salary you earned each month. If you earned ₱15,000 per month for six months and ₱20,000 per month for six months, your total annual gross is ₱210,000. Your 13th month pay is ₱210,000 ÷ 12 = ₱17,500.
Do I get 13th month pay if I work part-time?
Yes, if you are a regular part-time employee. The calculation is the same — add your gross income for the months you worked, divide by 12, and multiply by the number of months. If you are a casual or contractual worker, check your contract; some casual workers are not may have access to to 13th month pay under certain conditions.