13th Month Pay Calculator

What's Included

An XLSX template for computing 13th month pay across your entire workforce:

• Employee name and employment start date
• Monthly basic salary
• Actual months/days worked in the calendar year
• Pro-rated 13th month pay (for mid-year hires or employees with unpaid leaves)
• Tax-exempt indicator (first ₱90,000 of 13th month and other bonuses is exempt from income tax)
• Summary table for total 13th month pay liability
• Payment breakdown per employee

Legal Requirement

Presidential Decree 851 requires all employers to pay 13th month pay to rank-and-file employees on or before December 24 of each year. It is mandatory, not discretionary.

Exempted employers: those paying a 13th month equivalent or more under a Collective Bargaining Agreement (CBA) or equivalent arrangement.

Covered employees: All rank-and-file employees who have worked at least one (1) month during the calendar year. Managerial employees are technically excluded from PD 851, but many companies extend the benefit to them anyway.

Formula

13th Month Pay = Total Basic Salary Earned During the Year ÷ 12

What counts as basic salary:

• Regular daily rate × days worked
• Regular monthly salary (excluding OT, allowances, incentives)

What does NOT count:

• Overtime pay
• Holiday pay
• Night differential
• Commissions
• Allowances (transportation, meal, etc.)
• Profit sharing

Mid-Year Hires Example

An employee hired on July 1 with a ₱25,000 monthly basic salary:

• Months worked = 6 (July to December)
• 13th month pay = (₱25,000 × 6) ÷ 12 = ₱12,500

Tax Exemption Reminder

Under the TRAIN Law, the first ₱90,000 of 13th month pay and other benefits (Christmas bonus, productivity incentives) combined is tax-exempt. Amounts above ₱90,000 are added to taxable compensation.

How to Use This Template

1. Paste your employee list with hire dates and monthly salaries.
2. Enter any months with half-pay or unpaid leave separately.
3. The template computes each employee's pro-rated 13th month pay.
4. Review the total liability and compare against your cash position before the December payment deadline.