How to compute 13th month pay: DOLE computation guide

To compute your 13th month pay, add up the basic salary you actually earned from January to December and divide the total by 12. That is DOLE's rule: the 13th month pay can't be less than one-twelfth of the total basic salary you earned in the calendar year, and your employer must pay it on or before 24 December ^[2][3].

DOLE's own example in its 2025 guidelines: an employee who earned ₱209,774.20 in basic salary over the year is owed ₱209,774.20 ÷ 12 = ₱17,481.18 ^[3]. Every peso example in this guide is DOLE's. As of 3 November 2026, the latest DOLE guidelines on the Bureau of Working Conditions' site are the 2025 ones. The sections below cover what changes the total: unpaid leave, commissions, joining or leaving mid-year, a daily or weekly rate, payment in two halves, and tax.

What is the 13th month pay formula?

Total basic salary earned during the year ÷ 12 = your 13th month pay ^[3].

To compute it from your payslips:

1. Get your payslip for every month, from January (or the month you started) to December.
2. Write down the basic salary you actually received each month. A month with unpaid absences is lower.
3. Leave out overtime, holiday pay, night shift differential, allowances and anything else that isn't basic salary (the list is below).
4. Add up the months.
5. Divide by 12. Always 12, however many months you worked ^[3][6].

If you're computing before the year ends, November and December are estimates. Use your usual basic salary for those two months, and lower it for any unpaid leave you plan to take.

"Earned" is the word that matters. You add up what your employer actually paid you as basic salary, month by month. A month's basic pay that was reduced by unpaid absences goes in at the reduced amount.

If you worked the whole year at one monthly rate with no unpaid absences, the result is exactly one month's basic pay, because one month is one-twelfth of the year's total.

What counts as basic salary for 13th month pay?

DOLE defines basic salary as all pay for services you rendered, minus the allowances and benefits that aren't part of your regular salary ^[3]. In practice:

Overtime, premiums, night shift differential, holiday pay, COLA and unused leave credits are all named in DOLE's 2025 guidelines ^[3]. There's one exception: if your contract, a collective agreement, or company practice or policy treats any of them as part of your basic salary, it counts ^[3].

Do commissions count toward 13th month pay?

It depends on what the commission is. DOLE's 2025 guidelines cite the Supreme Court in Boie-Takeda Chemicals v. De la Serna: when you're paid a fixed wage plus commission, the fixed wage is your basic salary and the commission is left out ^[3]. In DOLE's example, an employee earned ₱216,782.12 in fixed wage and ₱30,000 in commissions over the year. The 13th month pay is ₱216,782.12 ÷ 12 = ₱18,065.18, with none of the ₱30,000 in it ^[3].

The Supreme Court drew a line in Philippine Duplicators v. NLRC in 1995. There, salesmen's commissions, a set percentage of the price of each item they sold, were held to be an integral part of their basic salary and were counted. The Boie-Takeda payments were left out because they were productivity bonuses ^[7].

Having a fixed wage doesn't settle it. The salesmen in Philippine Duplicators had a small fixed wage too, only 15% to 30% of their yearly earnings, and their commissions still counted ^[7]. A percentage you earn on each sale can count, and a productivity bonus doesn't. Check how your contract describes it.

How do you compute 13th month pay with absences?

Subtract only the unpaid ones. This is DOLE's worked example from its 2025 guidelines, for an employee whose basic pay is ₱18,127.92 a month ^[3]:

₱209,774.20 ÷ 12 = ₱17,481.18 ^[3]. June stays in full because those 5 days of leave were paid. Only September and November drop.

How do you compute pro-rated 13th month pay if you worked only part of the year?

You're entitled once you've worked at least one month in the calendar year ^[3][4]. The formula doesn't change: total basic salary earned ÷ 12. For a constant monthly salary with no unpaid absences, that works out to your monthly basic pay × months worked ÷ 12:

If you worked 6 months, you get half a month's basic pay. Dividing those 6 months of salary by 6 instead of 12 would give a full month's pay, and nothing in DOLE's rules supports that.

How do you compute 13th month pay if you resigned or were terminated?

The same way, over the months you worked. DOLE's FAQ says an employee who resigned or was terminated before the payout date is still entitled, in proportion to the time worked: if you worked January to September, you get one-twelfth of the basic salary you earned in those months ^[4].

If you already received a 13th month pay earlier in the year, the count starts from that payment instead of from January ^[4].

Your employer has 30 days from your separation to release your final pay, unless company policy is more favourable to you. That final pay includes your pro-rated 13th month pay. The rule is DOLE Labor Advisory No. 06, Series of 2020, which DOLE restated in a January 2026 news release ^[8].

How do you compute 13th month pay if your salary changed during the year?

Add up each month at the rate you were actually paid, then divide by 12 ^[3]. A raise in July counts only from July. If you multiply your new salary by 12 instead, you overstate what the law requires your employer to pay.

How do you compute 13th month pay for daily paid or weekly paid employees?

Add up the basic pay you earned on every day or week you were paid in the year, then divide by 12. DOLE's rule covers you whatever the method by which your wages are paid ^[3], and its handbook says the same ^[6].

Your payslips are the easiest record. Add up the basic pay line on each one, and leave out overtime, holiday pay and other premiums. DOLE doesn't publish a worked example for a daily or weekly rate, so this guide doesn't give one.

How is 13th month pay computed for piece-rate workers?

On total earnings from your output. DOLE's guidelines say piece-rate workers are covered, and the basis is total earnings from production during the year, divided by 12 ^[3]. DOLE's own example: ₱120,000 earned from January to December 2025 gives a 13th month pay of ₱10,000 ^[3].

How is 13th month pay computed if it's paid in two halves?

DOLE gives no formula for the first half. What it fixes is the total: by 24 December, the two payments together must reach one-twelfth of the basic salary you earned in the whole year ^[3]. So compute the full-year amount with the formula above, and check the second half against it.

Your employer may pay half before the school year opens and the other half on or before 24 December ^[4][6]. DOLE's handbook adds that how often it's paid can be agreed between the employer and the employees' recognised bargaining agent ^[6].

Who is entitled to 13th month pay?

Every rank-and-file employee in the private sector who has worked at least one month in the calendar year, whatever their position, employment status or method of pay ^[3]. That includes ^[3]:

• workers paid by piece rate
• employees paid a fixed or guaranteed wage plus commission
• employees with more than one employer
• employees who resigned or were terminated
• employees who were on maternity leave and received a salary differential

The original 1975 decree covered only employees earning up to ₱1,000 a month ^[1]. A 1986 memorandum order replaced that with all rank-and-file employees ^[2].

DOLE's FAQ lists who is not covered by the decree ^[4]:

• managerial employees, meaning those with power to set and carry out management policy, or to hire, fire or discipline, or to effectively recommend it
• employees of the government and its political subdivisions, including government-owned and controlled corporations, except those operating essentially as private subsidiaries
• employees paid purely by commission, boundary or task, or a fixed amount for a specific job regardless of the time it takes (piece-rate workers stay covered)
• employees of employers who were already paying a 13th month pay or its equivalent when the decree was issued

Kasambahay have their own law. Under Section 25 of the Batas Kasambahay, Republic Act No. 10361, a domestic worker is entitled to 13th month pay, DOLE's handbook says ^[6].

When should 13th month pay be released?

On or before 24 December ^[1][2][3].

The deadline can't be moved: DOLE's 2025 guidelines say no request for exemption from paying the 13th month pay, or for deferring it, will be accepted ^[3]. The 24 December deadline itself comes from the decree and applies every year ^[1][2].

Is 13th month pay taxable?

Not up to ₱90,000. The TRAIN Law excludes 13th month pay and other benefits from taxable income, up to a combined ₱90,000 a year ^[5]. DOLE's handbook states the same ceiling, citing the BIR's withholding rules ^[6].

That ₱90,000 is shared. It covers your 13th month pay plus other benefits such as productivity incentives and Christmas bonuses ^[5][6]. Whatever those benefits add up to above ₱90,000 in the year is taxable income:

(13th month pay + other benefits) − ₱90,000 = the taxable part, if the result is above zero ^[5][6].

Is 13th month pay the same as a Christmas bonus?

No. The 13th month pay is required by law. A bonus is given at the employer's discretion and isn't something you can demand, unless it has been made part of your wage or promised to you in an express agreement ^[4].

What can you do if you don't receive your 13th month pay?

Start with your payroll or HR team, with your payslips and your own computation in hand. If it still isn't paid, DOLE's guidelines say compliance is monitored by the DOLE regional, field or provincial office with jurisdiction over your workplace ^[3]. That is the office to bring it to. Every employer also has to report its compliance to DOLE, including the amount granted to each employee, by 15 January of the following year ^[6].

What if your 13th month pay won't cover what you need?

Work out the amount first, using the formula above, so you're planning around the real figure rather than a full month's salary you may not be owed.

If you're thinking of borrowing for an expense your 13th month pay won't cover, compare the total cost of the loan, every fee included, and how long you'd be repaying it, before you decide.

If you compare offers on liftfin, the lender you pick makes the credit decision, and no loan is approved until that lender says so.

Is 13th month pay included in SSS and PhilHealth contributions?

No. DOLE's 2024 handbook says the 13th month pay isn't part of your regular wage when computing overtime and premium pay, fringe benefits, or contributions to the SSS, PhilHealth, the State Insurance Fund and private retirement plans ^[6].

Why divide by 12 if I worked only a few months?

Because the 13th month pay is one-twelfth of the basic salary you earned in the calendar year ^[3][6]. Dividing by the number of months you worked gives you a full month's pay, which is more than the law owes you for part of a year.

Do I get 13th month pay if I'm on probation or a contractual employee?

Yes, if you're rank-and-file and have worked at least one month in the year. DOLE's guidelines cover employees regardless of their employment status ^[3]. Compute it the same way, on the basic salary you earned in the months you worked.

Is maternity leave included in the 13th month pay computation?

The SSS maternity leave benefit isn't counted ^[4]. The salary differential your employer pays on top of it is, according to DOLE's 2024 handbook, which cites the guidelines under the 105-day maternity leave law, Republic Act No. 11210 ^[6]. DOLE's FAQ has an older example from 2013, before that law: an employee earning ₱10,000 a month was on leave for June and July, so ₱100,000 was counted and the 13th month pay was ₱8,333.33 ^[4]. If your employer paid you a differential for those months, it goes into the total.

Is 13th month pay included in my final pay if I resign?

Yes. DOLE's rule on final pay lists pro-rated 13th month pay among the amounts it includes, and the whole final pay is due within 30 days of your separation unless company policy is more favourable ^[8]. The amount is one-twelfth of the basic salary you earned from January, or from your last 13th month payment, up to the day you left ^[4].

This guide summarises DOLE's published rules on the 13th month pay. It isn't legal or tax advice.