How to Compute 13th Month Pay PH? – All You Need to Know!

The 13th month pay is a bonus that employees in the Philippines look forward to each year, and it's a key part of employee compensation. If you’re curious about how this extra pay works, when you’ll get it, or how it’s calculated (especially if you've had some absences), you're in the right place! Let’s break down all the essential details you need to know about.

In the Philippines, 13th month pay is a government-mandated bonus that employees get each year. It’s roughly equal to a month’s basic salary and gives a nice financial boost, especially as the holiday season rolls around. Think of it not as a holiday bonus or a Christmas gift from your employer, but as a well-deserved benefit that’s required by law.

All rank-and-file employees who have worked for at least one month within the calendar year are entitled to receive this pay. This means if you’re a regular employee, probationary, or even under a project-based contract, you’re eligible.

To compute your 13th month pay in the Philippines, use this simple formula:

• 13th Month Pay = Total Basic Salary Earned for the Year ÷ 12

So, just add up your basic salary earned throughout the year and divide it by 12. This will give you the amount you’re entitled to for your 13th month’s pay!
 

Yes, contractual employees in the Philippines are entitled to 13th month pay. As long as they are rank-and-file (not managerial) and have worked at least one month during the year, they qualify for this benefit, regardless of their employment status.

The law states that employers must release 13th month pay on or before December 24 each year, just in time for the Christmas season! Many companies, however, choose to release it earlier, sometimes in two installments (one in June and the other in December) or as a lump sum.

The timing helps employees prepare for the holidays. Whether it’s for gift-giving, family gatherings, or even just a chance to save a little extra, the 13th month pay is a welcome addition to many people’s budgets at the end of the year.

The calculation is simple. To get your 13th month pay, take your total basic salary earned throughout the year and divide it by 12.

Example Calculation: Let’s say your monthly salary is PHP 20,000, and you worked the full year without any unpaid absences. In this case, your 13th month pay would be PHP 20,000. Easy, right?
 

If you had some unpaid absences during the year, your 13th month pay will be based on the actual amount you earned, not your full annual salary. Simply add up your total basic salary for the months you worked, then divide by 12.
Example Calculation with Absences: Imagine you missed some days and ended up earning PHP 230,000 for the year instead of PHP 240,000. To find your 13th month pay, just divide PHP 230,000 by 12. In this case, your 13th month pay would be around PHP 19,167.
 

To compute prorated 13th month pay, calculate the employee’s total basic salary earned for the months they worked, then divide by 12.
Example: If an employee earned PHP 15,000 monthly and worked 6 months, the computation is:

• Total earned = PHP 15,000 x 6 = PHP 90,000
• Prorated 13th month pay = PHP 90,000 ÷ 12 = PHP 7,500

This gives the prorated 13th month pay based on their actual months worked.

• Eligibility: All employees, regardless of employment status (as long as they are not managerial), are entitled.
• Calculation: The computation includes only your basic salary and excludes overtime, allowances, and other benefits.
• Timing: By law, the 13th month pay must be released on or before December 24.

The 13th month pay is a fantastic benefit that employees look forward to each year. Whether you’re planning to save it, spend it on gifts, or treat yourself to something special, understanding how it’s computed ensures you get what you deserve.

If you’re thinking about holiday shopping, one smart approach is to buy gifts in affordable installments. This way, you can spread out your expenses rather than making one big purchase all at once. With installments, you’ll have more flexibility, keep more of your budget intact, and still get to enjoy the joy of gift-giving without the post-holiday money crunch!