13th month pay calculator
13th month pay
₱25,000
₱25,000 x 12 months, over twelve.
How to use this
- Put in the basic monthly salary. Basic only: no overtime, no premium, no allowances.
- Set how many months of the year were worked. A part-year is fine and a fraction is fine, because the entitlement is pro-rated to what was actually earned.
- Read the figure. It is the total for the calendar year, due on or before 24 December.
How the number is worked out
Total basic salary earned in the calendar year, divided by twelve. That is the formula in the Department of Labor and Employment’s own guidance on Presidential Decree 851, and it is a pro-rated share rather than a flat extra month: somebody who worked half the year gets half.
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: a gift described as an entitlement becomes an expectation, and an entitlement described as a gift is a dispute waiting to happen.
This page exists on a freelancer platform for that sentence. The arithmetic is trivial and widely published; what is usually missing is who it applies to.
What this cannot tell you
This is the published formula with the exclusions stated. It is not legal or tax advice, and anything that turns on how somebody is engaged, registered or taxed is a question for DOLE, the BIR or an accountant.
It also cannot tell you whether a particular arrangement is really contracting or really employment. That is decided by how the work is actually controlled, not by what the agreement is called.
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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