Is 13th-Month Pay Taxable in the Philippines?

What shares the ₱90,000 exclusion?

Qualifying 13th-month pay, Christmas bonuses and other similar benefits share one annual exclusion. Excess qualifying de minimis benefits also enters this pool. Ordinary salary, commissions and an unsupported allowance do not become exempt merely because payroll calls them a bonus. Identify the payment category before entering an amount.

The exclusion covers qualifying employee benefits in public and private employment. A self-employed professional cannot treat business receipts as an employer-paid 13th-month benefit. Someone with both employment and business income keeps the two categories separate. TRAIN, amendment to NIRC §32(B)(7)(e); BIR RR 11-2018.

Example: ₱85,000 bonus plus ₱6,000 benefit excess

For a current-rule example, qualifying rice subsidy of ₱3,000 a month exceeds the ₱2,500 category limit by ₱500. Over twelve qualifying months, that excess is ₱6,000. Use the rules applicable when the payment was made; do not backdate today’s category limit. RR 29-2025; current de minimis categories and limits.

Below, at and above the annual limit

Crossing the limit does not make the whole pool taxable. The calculation is max(0, qualifying annual pool − ₱90,000). The same rule applies when a bonus is paid in installments: track the cumulative year total.

How much tax is deducted from the excess?

There is no separate universal “13th-month tax rate.” The excess joins taxable compensation. Payroll reconciles the applicable annual taxable total and prior withholding. A month with a large bonus deduction should be checked against that computation, rather than multiplying the bonus by a guessed flat rate.

For example, assume an ordinary resident individual using the graduated schedule, with ₱400,000 annual taxable income before a ₱10,000 taxable bonus excess and no other changes. Under the schedule effective from 2023 onward, tax on ₱400,000 is ₱22,500; on ₱410,000 it is ₱22,500 + 20% × ₱10,000 = ₱24,500. The increase is ₱2,000. This is an annual illustrative difference, not everyone’s December withholding. TRAIN, NIRC §24 schedule.

Once you have the annual taxable total, use the homepage income-tax calculator. To calculate the gross 13th-month amount from earned basic salary, use the 13th-month pay calculator.

What if I changed jobs or have two employers?

Do not claim ₱90,000 separately from each employer. If qualifying benefits are ₱50,000 from one employer and ₱60,000 from another, the combined ₱110,000 pool has ₱90,000 exempt and ₱20,000 taxable. Include any other qualifying pool items before finalizing the total.

Give the relevant payroll team your previous Form 2316 and a breakdown of annual benefits and earlier withholding. Concurrent or successive employment can require an annual return rather than substituted filing; determine your actual filing obligations rather than assuming the bonus excess alone triggers a return. Understand Form 2316 and check Form 1700.

Questions about taxable 13th-month pay

Why is my 13th-month pay taxable even though it is under ₱90,000?

Check the whole year: earlier bonuses, other qualifying benefits and excess qualifying de minimis may already have used part of the pool. Ask payroll to show the annual reconciliation. If its classification or amounts are wrong, request a corrected breakdown.

Are 13th- and 14th-month pay taxed separately?

Qualifying 14th-month benefits share the same annual pool with 13th-month pay and similar benefits. There is not another ₱90,000 exclusion for the extra month. Confirm the payment’s actual classification.

Is 13th-month pay always taxable?

No. A qualifying pool within the annual limit is excluded. An excess joins taxable compensation, but whether tax is ultimately due depends on the applicable annual total and rules.

Is 13th-month pay included in taxable income?

Only its portion that exceeds the available combined annual exclusion joins taxable compensation. Keep the exempt portion separate in payroll and Form 2316.

How much is non-taxable 13th-month pay?

Its exempt portion depends on how much of the ₱90,000 pool remains after other qualifying benefits. If they already total ₱40,000, only ₱50,000 of exclusion remains before considering further pool items.

Does an unused exemption carry over?

No. This is an annual employee exclusion. Unused capacity does not increase next year’s limit.

Is the same rule used for 2016, 2017 or older examples?

The ₱90,000 TRAIN limit applies from 2018. The preceding ₱82,000 limit applied under RA 10653 in 2015–2017; older periods used different rules. Match the tax year before reusing an old calculation. RA 10653; TRAIN effectivity.

What about the Netherlands?

This reference covers Philippine rules. A Dutch employment payment or cross-border arrangement needs the relevant jurisdiction and residency analysis; the Philippine ₱90,000 limit does not determine Dutch tax.

Ask payroll for these figures

1. Gross 13th-month pay and other qualifying annual bonuses.
2. De minimis category totals, their applicable limits and only the excess entering this pool.
3. Benefits from earlier or simultaneous employers.
4. The exempt pool amount, taxable excess and resulting annual taxable compensation.
5. The annual tax calculation, withholding already credited and Form 2316 figures.

You can download the numerical pool split from the checker above. Keep it with payroll’s reconciliation; it does not certify BIR compliance or replace the underlying records.

Sources and method

The pool splitter adds two nonnegative annual inputs, excludes up to ₱90,000 and shows the excess. Original examples, a visual split and a downloadable calculation are provided here. Checks cover zero, the exact threshold, excess and invalid inputs. Nothing is sent to BIR.

Source checks dated 11 October 2026 use RA 10963, RA 10653 for the earlier threshold, RR 11-2018 and RR 29-2025 for current de minimis limits. No named tax specialist’s review is claimed. A disputed classification needs the actual payment records and applicable BIR rules.