13th Month Pay (PD 851)
All rank-and-file employees are entitled to 13th month pay regardless of employment status.
Computation:
13th Month Pay = Total Basic Salary Earned ÷ 12
Key Rules:
- Deadline: Must be paid on or before December 24
- Coverage: All rank-and-file employees (regardless of position, designation, or employment status)
- Pro-rated: For employees who worked less than 12 months
What is included in Basic Salary?
- Regular wage or salary
- COLA (if integrated into basic pay)
What is NOT included?
- Overtime pay
- Holiday pay
- Night differential
- Allowances
- Commissions (variable, not fixed)
Tax Exemption:
13th month pay up to ₱90,000 is tax-exempt (combined with other benefits)
Legal Basis
Presidential Decree No. 851