When is the 13th month salary paid out in the Philippines?

What is the 13th-month salary in the Philippines?

The 13th-month salary is a mandatory statutory benefit for all employees in the Philippines. It's an additional month’s worth of salary that employees are legally entitled to receive.

Eligibility

According to the Department of Labor and Employment (DOLE), the 13th-month compensation is given to any employee who has worked for at least one month within the current calendar year.

Regardless of the nature of their employment or how they receive their pay, all rank-and-file employees who have worked for at least one month in a company are entitled to a 13th-month pay.

Employees who quit, were fired, or were separated from their individual firms are still entitled to their 13th-month salary, as long as they worked for at least a month.

Government workers are not eligible for a 13th-month pay, although they receive something in kind, often called a “year-end bonus.”

Freelancers, household helpers, and commission-based employees are also exempted from receiving this type of incentive, although they may receive other year-end bonuses at the discretion of their employers.

When is the 13th-month salary paid out at Remote?

The minimum 13th-month pay shall not be less than one-twelfth (1/12) of the total basic salary earned by an employee which will be paid out at the end of November each year.

If the employee leaves the employment before the end of November, eligible employees are entitled to receive the pro-rated 13th-month salary with the final pay.

How to compute prorated 13th month salary

Department of Labor and Employment regulations state that an employee's 13th-month compensation shall equal at least one-twelfth (1/12) of their annual basic wage.

Employees who worked less than 12 months will receive a prorated 13th-month pay based on the number of months they worked for the company

Example: If an employee earns the equivalent of PHP 60,000 annually, they receive PHP 5,000—equivalent to one month's salary—as their 13th-month pay. 

Will the 13th-month salary be taxed?

As per Republic Act 10653, the 13th-month pay is not taxable. However, any amount exceeding PHP 90,000 will be subject to tax. (There's a bonus exemption amounting to PHP 90,000 every year.)

Please visit the official page to see the latest tax table.