13th month pay for contractual, probationary and daily-paid workers
Who PD 851 covers — and the short list of people it doesn’t.
ESTIMATE
Guide and estimates as of 3 November 2026, for information only — not legal or tax advice. Rules: PD 851 and its 1987 Revised Guidelines, DOLE Labor Advisory No. 16, Series of 2025 (issued late November 2025), the ₱90,000 exemption under RA 10963 (TRAIN). The 2026 DOLE advisory had not been published when this was written; the rules have been the same every year.
Employment status doesn't matter. DOLE's advisories say all rank-and-file employees are entitled “regardless of their position, designation or employment status, and irrespective of the method by which their wages are paid”, if they worked at least one month in the year. That includes probationary, contractual, project, seasonal, part-time, agency-hired, piece-rate and daily-paid workers.
Covered vs not covered
Covered by PD 851
Regular and probationary employees
Contractual, project and seasonal workers
Part-time employees
Agency/contractor-hired workers (paid by the contractor)
Daily-paid and hourly-paid workers
Piece-rate workers
Employees with fixed pay plus commission (on the basic part, at least)
Those with several employers — each pays its share
Resigned or terminated employees (pro-rated)
Outside PD 851
Managerial employees
Government employees (year-end bonus system)
Workers paid purely on commission, boundary or task basis
Those who worked less than one month in the year
Household workers — now covered by the Kasambahay Law instead
The “not covered” list comes from the 1987 Revised Guidelines. Note that the guidelines also exempted employers already paying an equivalent benefit — a Christmas bonus of at least one month's basic salary counts as compliance, but a smaller one doesn't.
Three quick examples
Daily-paid: ₱650 a day, 5 days a week
Rey works Monday–Friday at an auto parts shop. He was paid for 245 working days in 2026 (holiday pay excluded, three unpaid days). Basic: 245 × ₱650 = ₱159,250. 13th month: ₱13,270.83.
Part-time: four hours a day
Celine is a part-time library assistant at a private college, paid ₱9,000 a month for half days. Twelve months gives ₱108,000 of basic pay and a 13th month of ₱9,000. Part-time status cuts the base, not the entitlement.
Agency worker, two assignments
Ronnie is employed by a manpower agency and deployed to a supermarket (January–June, ₱16,000) and then a warehouse (July–December, ₱17,000). His employer is the agency for the whole year, so it owes (6 × ₱16,000 + 6 × ₱17,000) ÷ 12 = ₱16,500. If the agency doesn't pay, the principals are jointly liable under DOLE's contracting rules.
Examples from this guide; rates are illustrative.
Work out your own 13th month pay
Enter your monthly basic salary, the months you worked and any unpaid absences — the calculator also shows how much falls under the ₱90,000 tax-free ceiling.
That policy breaks the law. The one-month minimum is the only service requirement. A probationary employee hired on 1 November and still employed on 1 December has earned a 13th month for 2026.
Several employers at once
Someone who works mornings for one company and evenings for another gets a 13th month from each, computed on what each one pays. The ₱90,000 tax exemption, however, is per person per year — two concurrent employers means you'll file your own annual income tax return.
Supervisors are not managers
A frequent misunderstanding: the 13th month isn't only for the lowest-paid staff. “Rank-and-file” in PD 851 means everyone who isn't a managerial employee. Team leaders and supervisors who don't make management policy or hire and fire are covered.
FAQ
Are contractual employees entitled to 13th month pay?
Yes. Contractual, project and seasonal employees are covered if they are rank-and-file and worked at least one month in the calendar year.
Do part-time workers get 13th month pay?
Yes, computed on the basic pay they actually earned. A part-timer earning ₱9,000 a month all year gets ₱9,000.
Who pays 13th month pay for agency workers?
The contractor or agency, as the employer. Under DOLE rules on contracting, the principal is jointly and severally liable if the contractor fails to pay.
Who is not entitled to 13th month pay under PD 851?
Government employees (who receive a year-end bonus instead), managerial employees, and workers paid purely by commission, boundary or task without a fixed wage. Kasambahay are covered separately under RA 10361.
Are piece-rate workers covered?
Yes. Their 13th month is one-twelfth of total earnings for the year, excluding overtime and premium pay.
Presidential Decree No. 851 (1975) and the Revised Guidelines on the Implementation of the 13th Month Pay Law (1987): one-twelfth of basic salary earned in the calendar year, rank-and-file employees, at least one month of service, pay on or before 24 December.
DOLE Labor Advisory No. 13, Series of 2024 and No. 16, Series of 2025 (reported by PNA/SunStar, 29 Nov 2025): no exemption or deferment, “basic salary” definition and exclusions, compliance report through the DOLE online portal by 15 January.
National Internal Revenue Code Sec. 32(B)(7)(e) as amended by RA 10963 (TRAIN): 13th month pay and other benefits exempt up to ₱90,000 a year; graduated income tax rates in force since 1 January 2023. House Bill 7661 (₱150,000 cap) was still pending in November 2026.
Employee contributions used for tax estimates: SSS 5% of the monthly salary credit (₱5,000–₱35,000), PhilHealth 2.5% (5% shared, ₱10,000–₱100,000), Pag-IBIG ₱200.