The 13th month pay is the law. The 14th is a company gift — here's how it usually works, how it's computed when granted, and what the tax rules say.
No. Philippine law (PD 851) mandates only the 13th month pay. A 14th month pay exists only where a company grants it — through company policy, an employment contract, or a collective bargaining agreement. It's common in multinationals, banks, and some BPOs as a recruitment edge.
One important protection: if a company has granted it consistently and unconditionally for years, the benefit can become demandable under the non-diminution of benefits principle — an employer generally can't just withdraw a benefit that has ripened into company practice.
| Common scheme | Formula | Typical release |
|---|---|---|
| Mirror of the 13th | Basic salary earned ÷ 12 (prorated the same way) | Mid-year (June) |
| Flat one month | One month's current basic salary | Mid-year or December |
| Performance-linked | A multiple of monthly salary tied to ratings | After appraisal cycle |
If your company mirrors the 13th month formula, our main calculator computes it identically — same inputs, same math.
All of these are "other benefits" under the TRAIN law: they share one combined ₱90,000 tax-free cap with your 13th month pay. Below the cap, everything is tax-free; the excess is added to taxable income. Run your numbers on the tax check calculator.
No — only the 13th month pay is mandated. The 14th is voluntary, by policy, contract, or CBA.
Per company policy — usually mirroring the 13th month formula (basic earned ÷ 12) or a flat month's salary.
It shares the ₱90,000 combined cap with the 13th month and other bonuses; only the excess is taxed.
No legal deadline — most companies pay it mid-year as the counterpart of December's 13th.
A long-standing, unconditional 14th month may be protected by non-diminution; conditional or one-time bonuses aren't.
Yes, at some companies, as pure bonuses under the same rules and the same shared tax cap.