Is 13th Month Pay Taxable? The ₱90,000 Rule

Short answer: not until it exceeds ₱90,000 — combined with your other bonuses. Here's exactly how the ceiling works.

What the ₱90,000 ceiling covers

Under the Tax Code (as amended by TRAIN), "13th month pay and other benefits" are excluded from gross income up to ₱90,000 per year. The ceiling covers your 13th month pay plus Christmas bonus, mid-year bonus, productivity incentives and similar benefits — added together.

What does NOT count toward it

De minimis benefits (rice subsidy, uniform allowance, small gifts within BIR limits) are exempt separately and do not eat into the ₱90,000. Your basic salary, overtime and night differential are ordinary taxable compensation and are also outside this ceiling.

How the excess is taxed

Only the amount above ₱90,000 is added to your taxable compensation and taxed at your regular income tax bracket. Example: 13th month ₱70,000 + Christmas bonus ₱40,000 = ₱110,000 → ₱20,000 is taxable; the first ₱90,000 stays exempt.

Estimate your 13th month first: 13th Month Pay Calculator →