Government Employees: Year-End Bonus & Cash Gift vs 13th Month Pay (2026)

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.

PD 851 doesn't apply to government. Instead, national government employees receive a year-end bonus equal to one month's basic pay (as of 31 October) plus a ₱5,000 cash gift, released with the first payroll in November, and a separate mid-year bonus in May. Together they work out to more than a private-sector 13th month.

Side by side

	Private sector	Government (national)
Legal basis	PD 851	RA 6686 as amended; DBM circulars
Amount	1/12 of basic salary earned in the year	Year-end bonus = 1 month basic pay as of 31 Oct
Cash gift	None required	₱5,000
Mid-year bonus	None required	1 month basic pay as of 15 May
Minimum service	1 month	4 months (1 Jan–31 Oct)
Deadline / release	On or before 24 Dec	With first November payroll
Tax	Exempt up to ₱90,000 combined	Exempt up to ₱90,000 combined

Sources: DBM press releases (Nov 2023, Nov 2025); DBM Budget Circulars 2016-4 and 2024-3; PTV News. Local government units and GOCCs follow their own approved budgets and charters.

Example: a teacher with ₱35,000 basic pay

Ma'am Joanna teaches in a public high school in Tarlac. Say her basic pay is ₱35,000 a month. In May she receives a mid-year bonus of ₱35,000; in early November, a year-end bonus of ₱35,000 and the ₱5,000 cash gift. That's ₱75,000, all within the ₱90,000 tax-free ceiling.

Her sister works for a private BPO on the same ₱35,000 basic. Her 13th month is ₱35,000, plus whatever Christmas bonus the company decides to give.

Statutory amounts only; excludes PBB, PEI and private-sector Christmas bonuses.

Government personnel may also receive a Productivity Enhancement Incentive and a Performance-Based Bonus. Those go into the same ₱90,000 bucket, so higher-paid officials often end up with a taxable portion.

Working in the private sector?

Use the 13th month calculator for PD 851 amounts — it also checks the ₱90,000 ceiling.

Open the 13th month calculator →

Eligibility details

Year-end bonus: at least four months of service from 1 January to 31 October, and still in service on 31 October. Personnel who left before 31 October may get a pro-rated amount under the conditions in the DBM circular.
Cash gift: ₱5,000, with the same eligibility; pro-rated for part-time and some contractual arrangements as specified by DBM.
Mid-year bonus: at least four months of service from 1 July of the previous year to 15 May, still in service on 15 May, and at least a “satisfactory” performance rating.

Job order and contract-of-service workers

JO and COS workers in government aren't employees and aren't covered by the year-end bonus rules or PD 851. Some agencies give them a gratuity under a separate DBM issuance when funds allow; it isn't guaranteed. Agency-supplied workers (security guards, janitors) are employees of their private contractor, which owes them a regular PD 851 13th month.

FAQ

Do government employees get 13th month pay?

Not under PD 851. They receive a year-end bonus of one month’s basic pay plus a ₱5,000 cash gift in November, and a mid-year bonus of one month’s basic pay in May.

When is the government year-end bonus released in 2026?

Under DBM Budget Circular No. 2024-3, the year-end bonus and cash gift are released with the first agency payroll in November, instead of the older “not earlier than 15 November” rule.

Who is eligible for the year-end bonus?

Personnel who have rendered at least four months of service from 1 January to 31 October and are still in government service on 31 October. Those with less service get a pro-rated amount under DBM rules.

Is the government year-end bonus taxable?

Only if the year-end bonus, mid-year bonus, cash gift and other benefits together exceed ₱90,000 for the year. The excess is taxed at the employee’s regular rate.

Is the mid-year bonus the same as a 14th month pay?

It is often called that informally. It is one month’s basic pay as of 15 May, paid to eligible government personnel with at least four months of service and a satisfactory performance rating.

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Sources

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.

Government year-end bonus vs 13th month pay