Amy
With July 2025 just around the corner, private sector workers in the Philippines are closely watching for updates on the 13th month pay guidelines.
The Department of Labor and Employment (DOLE) has issued new clarifications under the 2025 Labor Code update, aiming to simplify computations and enforce fairer distribution, especially for contractual workers and employees with performance-based pay structures.
What Is 13th Month Pay?
The 13th month pay is a mandatory monetary benefit provided to all rank-and-file employees in the private sector in the Philippines. It is equivalent to one-twelfth (1/12) of an employee’s total basic salary earned within a calendar year. Employers must release this payment on or before December 24 of every year.
July 2025 Changes: What’s New in the Guidelines?
The July 2025 update brings several key changes that employers and employees must be aware of:
- Eligibility remains unchanged: All rank-and-file employees who have worked for at least one month in a calendar year are still entitled to the benefit.
- Expanded definition of basic salary: New rules allow the partial inclusion of sales commissions and performance bonuses, provided these are stated in employment contracts.
- Pro-rata entitlements clarified: Workers who resign or are terminated mid-year are eligible for prorated 13th month pay.
Updated 13th Month Pay Computation Table – July 2025
Here’s a guide to help employees and employers understand how much should be paid under various employment scenarios:
| Employment Duration | Monthly Basic Pay | Total Work Months | Estimated 13th Month Pay |
|---|---|---|---|
| Full 12 months | PHP 18,000 | 12 | PHP 18,000 |
| 6 months only | PHP 20,000 | 6 | PHP 10,000 |
| 3 months only | PHP 15,000 | 3 | PHP 3,750 |
| With variable income | PHP 12,000 + bonuses | 12 | PHP 13,200* (approximate) |
Note:
Bonus amounts are subject to company policy and contract terms. Only bonuses deemed regular or contractual are included in computations.
Employer Responsibilities and Compliance Measures
Employers are mandated to:
- Pay the 13th month benefit by December 24, 2025.
- Provide prorated payment to employees who separate from the company before December.
- Maintain transparent payroll records and provide a clear breakdown of computation to employees.
Penalties for Non-Compliance:
- Failure to follow the new rules may result in administrative fines, labor disputes, and possible DOLE sanctions.
- Random audits will be conducted by DOLE across sectors to ensure compliance with the Labor Code Update 2025.
Labor Code Update 2025: Impact on Workers
The 2025 reforms bring significant benefits for workers, including:
- Clearer eligibility metrics for those in contractual and project-based roles.
- Mandated written acknowledgment of 13th month pay issuance.
- Better protection against underpayment or employer negligence.
- OFWs who return mid-year are fairly assessed for partial entitlements.
These improvements align with government efforts to enhance employee welfare, especially amid the ongoing economic adjustments.
The July 2025 13th month pay update ensures better transparency, fairer computation, and stronger protection for private sector workers in the Philippines.
By clarifying eligibility and expanding benefit coverage, these changes help both employers and employees navigate payment expectations confidently and legally under the updated labor code.
FAQs
Is the 13th month pay mandatory for all private companies?
Yes. All private companies are required to provide 13th month pay to rank-and-file employees who have worked for at least one month during the year.
Can bonuses and commissions be included in the computation?
Under the July 2025 guidelines, certain bonuses and commissions may be included if explicitly stated in employment contracts or if considered regular components of pay.
What if I resign before December 2025?
You are still entitled to a pro-rata share of your 13th month pay based on the number of months worked, even if you leave your job before year-end.