13th-month pay formula
13th Month Pay = Total Basic Salary Earned During the Calendar Year ÷ 12
Your 13th-month pay is therefore not always equal to your latest monthly salary. It depends on qualifying basic salary actually earned during the year.
Example: full year
If basic salary is ₱30,000 for all 12 months, total basic salary is ₱360,000 and the estimated 13th-month pay is ₱30,000.
Example: prorated pay
If an employee earns ₱25,000 basic salary for six months, total basic salary is ₱150,000. Dividing by 12 gives estimated 13th-month pay of ₱12,500.
What generally counts as basic salary?
The statutory calculation generally starts with basic salary earned for services rendered. Overtime, night differential, holiday pay, premium pay and certain allowances or benefits are generally excluded when they are not treated as part of basic salary under the applicable arrangement.
What if salary changed during the year?
Use the basic salary actually earned during each period. For example, six months at ₱25,000 plus six months at ₱30,000 equals ₱330,000 total basic salary; divided by 12, the estimate is ₱27,500.
13th-month pay after resignation
A covered employee who resigns during the year may generally receive proportionate 13th-month pay based on qualifying basic salary earned before leaving. It may form part of final pay.
When is it paid?
The statutory 13th-month pay is generally due not later than December 24, subject to applicable rules and payment arrangements.
Official reference
For authoritative guidance, consult the Department of Labor and Employment (DOLE) and Presidential Decree No. 851.
Frequently asked questions
How do I calculate 13th-month pay?
Add qualifying basic salary earned during the calendar year and divide the total by 12.
Do I get it if I worked only part of the year?
Covered employees may generally receive proportionate 13th-month pay based on basic salary actually earned.
Is overtime included?
Ordinary overtime is generally excluded when it is not considered part of basic salary.
Can resigned employees receive it?
Covered employees who resign may generally receive proportionate 13th-month pay based on basic salary earned before leaving.
Worked example with a salary increase
Suppose an employee earned ₱25,000 basic salary for January through June and ₱30,000 for July through December. Total basic salary earned is ₱150,000 + ₱180,000 = ₱330,000. Dividing by 12 gives a minimum 13th-month-pay estimate of ₱27,500.
Worked example for a partial year
If an employee earned ₱30,000 basic salary for only six months of the calendar year, the entered basic salary total is ₱180,000. Dividing by 12 gives an estimate of ₱15,000. This illustrates why the statutory formula is based on basic salary actually earned during the year rather than simply multiplying a monthly salary by months worked and then paying a full extra month.
Items that need special attention
Bonuses, allowances, leave conversions, commissions and other payments are not automatically part of the statutory basic-salary base. Company policy, a contract or established practice can also provide benefits beyond the statutory minimum. When reviewing a payslip or year-end computation, separate basic salary from other compensation before applying the one-twelfth formula.
A month-by-month method is safer
If salary changed during the year, employment began or ended midyear, or there were unpaid periods, list basic salary actually earned for each month and total the entries. The PaycheckPH calculator follows this approach so the assumptions remain visible.
Important note
PaycheckPH provides general educational information and estimates. Verify important calculations against current official government guidance and your actual employment circumstances.