How to Compute 13th Month Pay in the Philippines (2026 Guide)
A step-by-step guide to accurately computing the mandatory 13th month pay for your employees under Philippine labor laws (DOLE).
Determine Employee Eligibility
Under DOLE regulations, all rank-and-file employees who have worked for at least one (1) month during the calendar year are entitled to 13th month pay, regardless of the nature of their employment.
Calculate Total Basic Salary Earned
Sum up all the basic salary actually earned by the employee during the calendar year. Do not include unpaid absences, maternity leave benefits, holiday pay, premium pay, night shift differential, overtime pay, and allowances—unless these are integrated into the basic salary.
Divide by 12 Months
Take the total basic salary earned from Step 2 and divide it by 12. The resulting figure is the minimum 13th month pay required by law.
Process Payout Before December 24
Ensure that the 13th month pay is distributed to all eligible employees on or before December 24 of the current year to remain strictly compliant with DOLE mandates.