13th month pay calculator

Basic salary earned in the year, over twelve. And the part most calculators skip: who it actually applies to.

Basic monthly salaryBasic pay only. Overtime, holiday premium, night differential and allowances are outside the base.Months worked this yearPart of a month counts as part of a month: the entitlement is pro-rated to what was actually earned.

13th month pay

₱25,000

₱25,000 x 12 months, over twelve.

It applies to employees, not to contractors

13th month pay is a legal entitlement of rank-and-file employees under Presidential Decree 851. A freelancer engaged as an independent contractor, which is what everybody on RemoteHire.ph is, has no legal claim to it and you have no legal obligation to pay it. Plenty of clients send something at the end of the year anyway. That is a bonus you have chosen to give, and it is worth being clear with each other about which of the two it is.

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Questions

Does a freelancer get 13th month pay?: No. It is a legal entitlement of rank-and-file EMPLOYEES under Presidential Decree 851. An independent contractor is not an employee, and freelancers on RemoteHire.ph are contractors, so there is no legal obligation on you to pay it and no legal claim for them to make. Some clients pay something anyway at the end of the year; that is a gift or a bonus you have agreed, not this.
How is it worked out?: Total basic salary earned in the calendar year, divided by twelve. Somebody who worked six months at ₱30,000 earned ₱180,000 of basic pay, so their 13th month pay is ₱15,000. It is pro-rated by what was actually earned rather than being a flat extra month.
What counts as basic salary?: Basic pay only. Overtime, holiday and rest-day premium, night shift differential, and cash allowances are excluded from the base by the Department of Labor and Employment's own guidance. Leaving them in makes the number bigger and wrong.
When is it due?: On or before 24 December each year, under the same decree. Employers who pay it in two instalments usually pay half around the middle of the year.
Is this legal or tax advice?: No. It is the published formula with the exclusions stated. Anything that turns on how somebody is engaged, registered or taxed is a question for DOLE, the BIR or an accountant.

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It applies to employees, not to contractors

Questions

Does a freelancer get 13th month pay?

No. It is a legal entitlement of rank-and-file EMPLOYEES under Presidential Decree 851. An independent contractor is not an employee, and freelancers on RemoteHire.ph are contractors, so there is no legal obligation on you to pay it and no legal claim for them to make. Some clients pay something anyway at the end of the year; that is a gift or a bonus you have agreed, not this.

How is it worked out?

Total basic salary earned in the calendar year, divided by twelve. Somebody who worked six months at ₱30,000 earned ₱180,000 of basic pay, so their 13th month pay is ₱15,000. It is pro-rated by what was actually earned rather than being a flat extra month.

What counts as basic salary?

Basic pay only. Overtime, holiday and rest-day premium, night shift differential, and cash allowances are excluded from the base by the Department of Labor and Employment's own guidance. Leaving them in makes the number bigger and wrong.

When is it due?

On or before 24 December each year, under the same decree. Employers who pay it in two instalments usually pay half around the middle of the year.

Is this legal or tax advice?

No. It is the published formula with the exclusions stated. Anything that turns on how somebody is engaged, registered or taxed is a question for DOLE, the BIR or an accountant.