What is the 13th Month Pay? Is it Required?

Last updated in March 2026.

Is the 13th month pay required? Yes.

Well, kind of…

If you’re hiring in the Philippines (or thinking about it), the 13th month pay is one of those things you’ll hear about pretty quickly. And if you’re new to managing remote Filipino workers, it can raise a lot of questions.

Is it required by law?
Who qualifies for it?
Do part-time workers get it too?
And how exactly do you calculate it?

In this guide, we’ll break down the basics so you know exactly what to expect when employing Filipino workers.

But quick answer:

• Is the 13th month pay required? Yes, for most employees in the Philippines.
• When is it paid? On or before December 24.
• How much is it? Usually equivalent to 1/12 of an employee’s basic annual salary.
• Does it apply to remote Filipino workers? It depends on the employment setup.

Now let’s talk about why this “extra” pay exists and why Filipino workers look forward to it every year.

What is the 13th Month Bonus?

Once you start to feel the chill in the air, Filipino workers start anticipating for that most magical day of the year.

No, not Christmas! That’s a close 2nd though. What I’m talking about is the day they get their 13th month pay.

Does the Philippines have a secret calendar that nobody else in the world knows about?

If you’re hiring from the Philippines, understanding the local work culture can help you appreciate why this bonus matters so much.

The 13 month bonus is actually an employee benefit unique to Filipino workers. It was made mandatory back in the late 1970’s under the administration of Ferdinand Marcos (yes, that Marcos). This law (Presidential Decree 851) basically says that at the end of the year, workers are entitled to an extra month’s salary.

This was done to achieve a few things:

• give workers more money during the Christmas holidays
• stimulate the holiday economy
• reduce absenteeism
• reduce worker sluggishness during the holidays

Because it’s mandated by law, qualified employees who have rendered at least one month of service during the calendar year are entitled to receive it. The amount is computed on a pro-rated basis and is equivalent to at least one-twelfth (1/12) of the employee’s total basic salary earned within the year.

Now that you have a general idea of what the 13th month benefit is, let’s dive into the math.

Computing for the 13th Month Bonus

Let’s say you have a Filipino VA, Mario, who you pay P12,000 a month. He started working for you April of this year. How much is he entitled to get for his 13th month?

Here’s the basic formula:

Since Mario is earning P12,000 per month, you need to divide that number by 12 for the 12 months of the year.

You get P1,000. For every month Mario has been working for you, he is entitled P1,000 for his 13th month.

If he started working for you in January, he would get the full month’s salary, P12,000. But since Mario only started in in April, that means he’s only been working 9 months. So he’s only entitled P9,000 in his 13 month bonus.

Here’s the formula with the sample:

If you’re not sure whether that salary is typical or competitive, you might want to check this Filipino Virtual Assistants Salary Guide to see common pay ranges for different roles.

Another Way to Compute the 13th Month Pay

If you have a VA on a part-time or hourly basis, another way to compute for the 13th month pay is to get the total of how much you’ve paid them for a year and divide it by 12 months. Let’s say you’ve paid your part-time virtual assistant P72,000 for the year. You can simply divide that number by 12 and you have the 13th month bonus amount.

This formula works better if you also have some special virtual assistants that aren’t hired full time, but you feel also deserves the 13th month.

Do I Really Need to Pay 13th Month?

It’s a benefit we strongly encourage because it’s really a good motivator for employees. Getting their 13th month on time and in full can sometimes make the difference between having a great Christmas or just getting by.

It’s legally required if you’ve set up a shop in the Philippines. Like if you’re registered in the Philippines, you have office space there, and you’re paying taxes. But otherwise, not really.

For foreign employers hiring Filipino virtual assistants or remote contractors, the 13th month pay is optional and depends on the terms of the agreement between the parties.

That said, many foreign employers still choose to give a 13th month bonus voluntarily as a way to show appreciation and take care of their Online Filipino Specialists — especially during the holidays.

I agree though that there are cases where the 13th month pay does not apply.

If you’re paying your worker by the hour, the 13th month bonus might not make sense.

If your virtual assistant doesn’t do long term work for you, or they work mainly on short term projects with gaps in between tasks, then the 13 month bonus wouldn’t work as well.

But just because they’re not entitled to a bonus doesn’t mean you can’t send them a little extra over the holidays.

Anything Else I Should Know?

Remittances to the Philippines usually peak during the last quarter of the year. And if you send your 13th month in the last few weeks in December, you’ll run into multiple bank holidays. So if you want your virtual assistant to receive their 13th month pay on time, send it early. The first week of December is usually best.

Or ask your VA if they want to receive their bonuses on January (some prefer this). That way, you can avoid any salary issues over the holidays.

Frequently Asked Questions

Do freelancers or independent contractors receive 13th month pay?

Not necessarily. The 13th month pay is a benefit required for rank-and-file employees under Philippine labor law. If your Filipino worker is classified as a freelancer or independent contractor, the law typically does not require it.

What happens if an employee resigns before December?

Employees who leave the company before December are still entitled to a prorated 13th month pay.This means they should receive a portion of the bonus based on how many months they worked during the year.

Is the 13th month pay the same as a Christmas bonus?

No. The 13th month pay is a legally mandated benefit, while a Christmas bonus is optional and given at the employer’s discretion. Some companies provide both, but only the 13th month pay is required by law.

What Employers Should Remember

The 13th month pay might seem like just another line on your budget, but for Filipino workers, it’s something they really look forward to every year.

If you’re considering this benefit for your Filipino workers, plan for it in your costs to avoid last-minute stress. But it’s more than numbers. Giving your team this bonus shows you value their hard work and care about their holidays and families.

A little thoughtfulness goes a long way. When your team feels appreciated, they stick around, work happier, and give their best. And that makes your business stronger too!

Do you have any other burning questions about outsourcing you need answers to? Let us know in the comments below and we’ll try to answer them in future blog posts.