Short answer: tax-free up to ₱90,000 — combined with your other bonuses — and only the excess above that is taxed. Here's exactly how the rule works, with a calculator for your own numbers.
Don't know it yet? Compute it first.
Christmas bonus, mid-year bonus, incentives.
Since the TRAIN law took effect, "13th month pay and other benefits" are excluded from taxable income up to ₱90,000 per year, combined. The two key words are combined — your 13th month pay shares the cap with your other bonuses — and excess — crossing ₱90,000 doesn't make everything taxable, only the amount above the line.
| 13th month pay | Other bonuses | Total | Taxable portion |
|---|---|---|---|
| ₱35,000 | ₱0 | ₱35,000 | ₱0 — fully tax-free |
| ₱60,000 | ₱25,000 | ₱85,000 | ₱0 — still under the cap |
| ₱80,000 | ₱40,000 | ₱120,000 | ₱30,000 added to taxable income |
The excess above ₱90,000 is simply added to your taxable compensation and taxed at your regular bracket. Your employer withholds it automatically — you'll see the effect on your December payslip and BIR Form 2316.
Tax-free up to ₱90,000 combined with other benefits; only the excess is taxed.
13th month pay + other benefits: Christmas bonus, mid-year bonus, incentives, and similar payments.
Added to your regular taxable income and taxed at your normal bracket — no special rate.
Yes, identically. Compute yours on the prorated calculator.
It's an "other benefit" sharing the same combined cap — under ₱90,000 total, it's tax-free too. See 14th month pay.
No — your employer withholds any tax due through payroll and reports it on your Form 2316.