14th, 15th & 16th Month Pay: Computation and Tax (2026)
Only the 13th month is required by law. A 14th, 15th or 16th month is a company bonus, usually computed the same way: basic salary earned in the year ÷ 12, so one month of basic pay for a full year. All of it shares one ₱90,000 tax-free limit a year; only the excess is taxed.
How to compute 14th to 16th month pay
- Add up the basic salary you earned this year (exclude overtime, allowances and night differential, unless your company includes them).
- Divide by 12. That is one bonus month. Full year on ₱30,000 gives ₱30,000; 6 months gives ₱15,000.
- Add every bonus month and other benefits for the year. The first ₱90,000 is tax-free.
- The rest is added to your taxable pay. Example: 13th to 16th month on ₱30,000 is ₱120,000; ₱30,000 is taxable, about ₱4,500 in tax, so you keep ₱115,500.
Bonus months by salary, after tax
Total bonus and what you keep after tax, if each bonus month equals one month of basic pay and you get no other taxable benefits.
| Monthly basic | 13th only | Up to 14th | Up to 15th | Up to 16th |
|---|---|---|---|---|
| ₱20,000 | ₱20,000 tax-free | ₱40,000 tax-free | ₱60,000 tax-free | ₱80,000 tax-free |
| ₱25,000 | ₱25,000 tax-free | ₱50,000 tax-free | ₱75,000 tax-free | ₱98,500 ₱100,000 less ₱1,500 tax |
| ₱30,000 | ₱30,000 tax-free | ₱60,000 tax-free | ₱90,000 tax-free | ₱115,500 ₱120,000 less ₱4,500 tax |
| ₱40,000 | ₱40,000 tax-free | ₱80,000 tax-free | ₱114,000 ₱120,000 less ₱6,000 tax | ₱146,000 ₱160,000 less ₱14,000 tax |
| ₱50,000 | ₱50,000 tax-free | ₱98,000 ₱100,000 less ₱2,000 tax | ₱138,000 ₱150,000 less ₱12,000 tax | ₱178,000 ₱200,000 less ₱22,000 tax |
| ₱60,000 | ₱60,000 tax-free | ₱114,000 ₱120,000 less ₱6,000 tax | ₱162,000 ₱180,000 less ₱18,000 tax | ₱208,570 ₱240,000 less ₱31,430 tax |
| ₱80,000 | ₱80,000 tax-free | ₱142,500 ₱160,000 less ₱17,500 tax | ₱202,500 ₱240,000 less ₱37,500 tax | ₱262,500 ₱320,000 less ₱57,500 tax |
| ₱100,000 | ₱97,500 ₱100,000 less ₱2,500 tax | ₱172,500 ₱200,000 less ₱27,500 tax | ₱247,500 ₱300,000 less ₱52,500 tax | ₱322,500 ₱400,000 less ₱77,500 tax |
Tax is the extra annual income tax from the bonus above ₱90,000, computed with the BIR 2023-onward table on top of your regular salary.
Is it required, and when is it paid?
Presidential Decree 851 requires only the 13th month, paid on or before December 24 to rank-and-file employees who worked at least a month. Anything beyond that comes from your contract, company policy or CBA. Many companies release extra months mid-year or tie them to performance, so check your handbook for the formula and the release date.
Frequently asked questions
How is 16th month pay computed?
There is no legal formula, because only the 13th month is required by law. Most companies use the same method as the 13th month: your total basic salary earned in the year divided by 12, which is one month of basic pay if you worked the whole year. On ₱30,000 a month, the 13th to 16th month together are ₱120,000.
Is 14th, 15th or 16th month pay mandatory in the Philippines?
No. Only the 13th month pay is mandatory under Presidential Decree 851. A 14th, 15th or 16th month is a company bonus, given by policy, contract or collective bargaining agreement. Once it is a regular, long-standing company practice, it can become hard for the employer to withdraw.
Is 16th month pay taxable?
Your 13th month pay and all other bonuses and benefits share one tax-free limit of ₱90,000 a year. Only the part above that is taxed, at your regular income tax rate. For example, on ₱30,000 a month, four bonus months are ₱120,000: ₱90,000 is tax-free and ₱30,000 is taxable, about ₱4,500 in tax.
How much is the tax on 13th to 16th month pay on ₱50,000?
Four bonus months on ₱50,000 total ₱200,000. After the ₱90,000 exemption, ₱110,000 is taxable, about ₱22,000 in extra income tax, so you keep about ₱178,000.
How do I compute a pro-rated 14th to 16th month pay?
If your company follows the 13th-month method, divide the basic salary you actually earned in the year by 12. Joining in July on ₱30,000 (6 months worked) gives about ₱15,000 per bonus month. Your company policy decides whether new hires qualify at all.
When is 14th to 16th month pay released?
Company policy decides. The 13th month must be paid on or before December 24. Extra months are often released mid-year (around June), at year end, or tied to performance or company results.
Related
- 13th month pay guide: the legal formula and the ₱90,000 rule.
- 13th month pay by salary: amounts and tax for common salaries.
- Take-home pay calculator: add bonus months to see your real yearly net.
- Withholding tax table 2026: the monthly BIR tax by salary.
- Pasko budget planner: plan where the bonus goes before it arrives.
- High-yield savings: where to park a bonus so it earns.
Educational estimate. Bonus formulas are set by each employer; tax figures assume one bonus month equals one month of basic pay and no other taxable benefits. Confirm with your HR or payroll.
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