1. What is the Annual Salary Calculation?

In the Philippines, annual salary typically includes 13 months of pay - 12 regular monthly salaries plus a mandatory 13th month pay as required by Philippine labor law.

2. How Does the Calculator Work?

The calculator uses this simple formula:

Where:

• Monthly Salary — The employee's regular monthly compensation
• 13 — Represents 12 months plus the mandatory 13th month pay

Explanation: The calculation accounts for the standard Philippine practice where employees receive an additional month's salary as mandated by law.

3. Importance of 13th Month Pay

Details: The 13th month pay is required by Presidential Decree No. 851 and is equivalent to 1/12 of an employee's basic annual salary, payable before December 24 each year.

4. Using the Calculator

Tips: Enter your monthly basic salary in Philippine Pesos (PHP). The calculator will automatically compute your total annual compensation including the 13th month pay.

5. Frequently Asked Questions (FAQ)

Q1: Is 13th month pay required for all employees?
A: Yes, it's mandatory for all rank-and-file employees in the private sector who have worked at least one month during the calendar year.

Q2: Are bonuses included in the 13th month pay calculation?
A: No, only basic salary is used to compute the 13th month pay. Allowances and bonuses are excluded.

Q3: When is the 13th month pay given?
A: It must be paid on or before December 24 of each year, though some companies pay half in mid-year and half in December.

Q4: What if I resign before December?
A: You're still entitled to a pro-rated 13th month pay based on months worked during the year.

Q5: Is the 13th month pay taxable?
A: The amount up to PHP 90,000 is tax-exempt under Philippine law.