How much you get, how to pro-rate it, and whether any of it is taxed — with a worked example.
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.
₱75,000 monthly basic salary, full year: ₱75,000 13th month pay, all of it within the ₱90,000 tax-free ceiling. At this pay level, many readers are managers — and that's where the law gets interesting.
₱75,000 full year₱37,500 6 months₱6,250 per month₱287.36 per unpaid day₱15,000 tax-free room left
An example from payroll
Teresa heads the finance department of a mid-sized food manufacturer in Valenzuela. She has authority to hire and discipline staff and sits on the management committee — a managerial employee under Article 219 of the Labor Code. Strictly, PD 851 doesn't require her company to give her a 13th month.
Her company does anyway, as it has for every manager for over ten years. That long, deliberate, consistent practice makes it a benefit the company can't simply take away — the non-diminution of benefits rule in Article 100 of the Labor Code. So her ₱75,000 is effectively guaranteed, though by practice rather than by PD 851.
Managers, the law and company practice
The 1987 guidelines apply the 13th month to rank-and-file employees. Managerial employees — those who lay down and execute management policies, or who hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees — are outside it. Supervisors are not.
Most Philippine companies give managers a 13th month or an equivalent bonus anyway, often written into the offer letter. If yours is in the contract, it's enforceable as a contract term. And for tax, it doesn't matter whether you're a manager: the ₱90,000 exemption applies to everyone.
Tax-free room for other bonuses
The ceiling covers the 13th month and other benefits combined, per taxpayer per year (NIRC Sec. 32(B)(7)(e), as amended by TRAIN).
A full-year 13th month of ₱75,000 is entirely exempt. You still have ₱15,000 of tax-free room for a Christmas bonus, productivity incentive or other benefits paid in 2026. With a ₱20,000 bonus you'd be ₱5,000 over, costing about ₱1,250 in tax at your 25% top rate.
The 13th month is never subject to SSS, PhilHealth or Pag-IBIG contributions. Tax estimates assume a full year at ₱75,000 with employee contributions of about ₱3,825 a month deducted.
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.
Fun equivalents. NCR minimum wage: ₱755 a day for non-agriculture workers under Wage Order NCR-28 (from 26 September 2026).
Leave without pay: the effect in pesos
Paid leave doesn't reduce anything. Unpaid days, undertime and tardiness deductions do — but only by a twelfth of the amount deducted.
Unpaid days
5-day week
6-day week
1 day
₱74,712.64 −₱287.36
₱74,760.38 −₱239.62
3 days
₱74,137.93 −₱862.07
₱74,281.15 −₱718.85
5 days
₱73,563.22 −₱1,436.78
₱73,801.92 −₱1,198.08
10 days
₱72,126.44 −₱2,873.56
₱72,603.83 −₱2,396.17
Before you check your December payslip
If you are moving into a managerial role, check that the new contract keeps the 13th month (or an equivalent bonus) in writing.
Keep the employer's computation. If you were paid less than one-twelfth of your basic salary for the year, a written query to HR settles most cases before DOLE is needed.
Payday falls on a weekend or holiday? 24 December 2026 is a Thursday, so there's no excuse for “we'll pay after Christmas”. Employers may — and many do — pay earlier.
FAQ
Are managers entitled to 13th month pay?
Not under PD 851, which covers rank-and-file employees. But many companies pay it by contract or long practice, and a consistent practice cannot be withdrawn because of the non-diminution rule.
Is ₱75,000 13th month pay taxable?
No, as long as your 13th month and other bonuses for the year total ₱90,000 or less. Only ₱15,000 of further bonuses would fit tax-free.
Do I need to work a minimum period to get it?
Yes — at least one month during the calendar year. Below that, there is no entitlement under PD 851.
How is 13th month pay computed on a ₱75,000 salary?
Add up the basic salary you earned from January to December and divide by 12. For a full year at ₱75,000 that gives ₱75,000; each month worked adds ₱6,250.
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.