PHP 90,000 exemption ceiling

13th Month Pay Calculator

Every rank-and-file employee in the Philippines is legally entitled to 13th month pay, and the first PHP 90,000 of it (combined with any other bonuses counted against the same ceiling) is exempt from income tax under Republic Act 10963, the TRAIN Law. Enter your 13th month pay amount below to see the tax-exempt portion, the taxable excess (if any), and your estimated net amount. This is a separate calculation from your regular monthly salary tax; see the main tax calculator for that.

Your 13th month pay amount Usually your total basic salary earned during the year, divided by 12.

Your monthly basic salary Used only to estimate your marginal tax rate on any taxable excess above the PHP 90,000 exemption.

Other bonuses/benefits already received this year (optional) Any other benefit counted against the same PHP 90,000 combined ceiling (e.g. a mid-year bonus). Leave at 0 if none.

13th month pay -

Tax-exempt portion -

Taxable excess -

Estimated tax on excess -

Estimated net 13th month pay - Enter your 13th month pay amount to see the result.

Updated 2026-09-02 · Source: BIR / RA 10963 (TRAIN Law), Section 32(B)(7)(e)

Estimate: the PHP 90,000 exemption (RA 10963) covers 13th month pay + other bonuses/benefits COMBINED per year. Tax on any excess is estimated using your marginal monthly tax rate; your employer's actual payroll computation may differ slightly.

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What is 13th month pay?

13th month pay is a mandatory benefit under Presidential Decree No. 851, paid to all rank-and-file employees who have worked for at least one month during the calendar year, regardless of the nature of their employment. It is legally required to be paid on or before December 24 each year. The standard formula is:

13th month pay = Total basic salary earned during the calendar year ÷ 12
"Basic salary" means your regular monthly pay. It does NOT include overtime pay, holiday premium, night-shift differential, allowances, or other monetary benefits not integrated into basic pay.
If you didn't work the full year (e.g. you started in April), your 13th month pay is prorated based on the months actually worked.

The PHP 90,000 tax-exempt ceiling

Under Section 32(B)(7)(e) of the National Internal Revenue Code, as amended by the TRAIN Law, the first PHP 90,000 per year of 13th month pay AND other benefits COMBINED is exempt from income tax. Important details:

The PHP 90,000 ceiling is shared: if you also received, say, a mid-year performance bonus of PHP 20,000 that counts against the same ceiling, only PHP 70,000 of that ceiling remains available for your 13th month pay.
Any amount above the combined PHP 90,000 is added to your taxable income and taxed at your marginal rate, typically withheld by your employer from the bonus payout itself.
De minimis benefits (things like a small rice subsidy, uniform allowance, or laundry allowance, each with its own separate BIR-prescribed limit) are NOT counted against this PHP 90,000 ceiling as long as they stay within their own individual limits; only the excess over each de minimis limit gets folded into the PHP 90,000 pool.

Worked example

Suppose your monthly basic salary is PHP 30,000 and you worked the full year with no other bonuses. Your 13th month pay is PHP 30,000 ÷ 12 × 12 = PHP 30,000, well under the PHP 90,000 ceiling, so it's entirely tax-free. You take home the full PHP 30,000.

Now suppose you're a manager earning PHP 100,000/month with a full 13th month pay of PHP 100,000, and no other bonuses. PHP 90,000 of that is exempt; the remaining PHP 10,000 is taxable. At your marginal monthly rate (25% for a PHP 100,000/month earner under the TRAIN Law's monthly brackets), the estimated tax on that excess is roughly PHP 2,500, leaving an estimated net 13th month pay of about PHP 97,500. Try both scenarios in the calculator above.

13th month pay vs. Christmas bonus

These are often confused, but they are legally different. If you want the full picture of how your regular paycheck is taxed the rest of the year, see our tax calculator and TRAIN Law tax brackets guide:

13th month pay is mandatory (PD 851): every eligible employer must pay it, and it's computed with the fixed formula above.
Christmas bonus (or any other year-end bonus) is discretionary unless your employment contract or a collective bargaining agreement specifically guarantees it. If given, it counts toward the same PHP 90,000 combined tax-exempt ceiling as your 13th month pay.

Frequently asked questions

Is 13th month pay mandatory in the Philippines?

Yes. Presidential Decree No. 851 requires all employers to pay rank-and-file employees 13th month pay, on or before December 24 each year, as long as the employee worked at least one month during the calendar year.

Is my 13th month pay taxable?

Only the portion above PHP 90,000 per year (combined with any other benefits counted against the same ceiling) is taxable. For most rank-and-file employees, whose 13th month pay equals one month's basic salary, the full amount is well under PHP 90,000 and therefore completely tax-free.

How is 13th month pay computed if I didn't work the full year?

It's prorated: total basic salary actually earned during the calendar year, divided by 12. For example, if you earned PHP 180,000 in basic salary over 6 months, your 13th month pay is PHP 180,000 ÷ 12 = PHP 15,000.

Does overtime pay count toward 13th month pay?

No. Only your basic salary counts. Overtime pay, holiday premium, night-shift differential, and most allowances are excluded from the 13th month pay computation unless your company policy explicitly integrates them into basic pay.

What happens if my employer doesn't pay 13th month pay?

It's a labor standards violation. Employees can file a complaint with the Department of Labor and Employment (DOLE). This calculator doesn't provide legal advice; for a dispute, consult DOLE or a labor lawyer directly.