DOLE Sets December 24 Deadline for 2026 13th Month Pay, Requires January Compliance Report

Two deadlines for employers, one formula for workers

Private sector employers in the Philippines must release eligible workers' 13th month pay on or before December 24, 2026, and report their compliance through the Department of Labor and Employment's Online Compliance Portal by January 15, 2027. Requests for exemption from payment or permission to delay it will not be accepted under the department's guidelines.

Labor Advisory No. 21, Series of 2026, signed by Labor Secretary Francis N. Tolentino, sets the minimum benefit at one twelfth of the basic salary an employee earned during the calendar year. A worker with PHP 228,010.04 in annual basic salary, for example, should receive PHP 19,000.84.

The coverage extends beyond employees who remain at the same workplace until Christmas. Eligible workers include those who resigned or were dismissed, employees paid according to their output, people working for multiple employers, and employees who took maternity leave and received a salary differential.

The advisory invokes Article 5 of the Labor Code of the Philippines and Presidential Decree No. 851. For workers checking their expected payment, the central task is to identify their basic salary earnings for the year, rather than simply use their latest monthly wage or add together every payment on their payslips.

Who qualifies for the benefit?

Rank-and-file employees in the private sector qualify if they worked for at least one month during the calendar year. Their employment status, job designation or method of wage payment does not remove their entitlement within that covered group.

Rank-and-file generally means employees outside managerial positions. The advisory's broad coverage means workers should check their actual eligibility instead of assuming that a temporary appointment, an unusual pay arrangement or an early departure from a job excludes them.

DOLE identifies several groups covered by the rules:

• Workers paid by the piece or by their production output.
• Employees receiving fixed or guaranteed wages plus commissions.
• Employees with multiple employers.
• Employees who resigned or whose employment was terminated.
• Employees who took maternity leave and received a salary differential.

Household helpers, known as kasambahay, are also entitled to 13th month pay, subject to the requirement that they worked for at least one month during the calendar year. Their entitlement is relevant to households employing domestic workers, as well as businesses reviewing payroll obligations.

How to calculate the amount

The calculation starts with the total basic salary earned during 2026. Divide that amount by 12 to obtain the minimum 13th month pay. The divisor remains 12 even when an employee worked for only part of the year because the smaller earnings total already accounts for the shorter period of employment.

DOLE's example uses annual basic salary of PHP 228,010.04. Dividing it by 12 produces PHP 19,000.84 when rounded to the nearest centavo. A worker with PHP 120,000 in qualifying annual earnings would receive PHP 10,000 using the same formula.

A full month of salary and 13th month pay will match when a worker receives the same basic monthly salary throughout all 12 months. For someone who joined later, received a pay adjustment or had unpaid absences, the annual earnings figure may produce a different amount from the latest monthly salary.

Workers can make the calculation easier to check by adding the basic salary amounts shown on their payslips for the year. Employers need to identify which payroll items belong in that total before applying the formula. A larger total payment on a payslip does not necessarily mean a larger basic salary amount.

Which payments count as basic salary?

DOLE describes basic salary as remuneration or earnings paid by an employer for services rendered. Several other payments are generally excluded when they have not been incorporated into regular or basic salary.

The exclusions include allowances, overtime pay, premium pay, night shift differentials, holiday pay, the cash equivalent of unused vacation and sick leave credits, and cost of living allowances. These amounts can make a substantial difference between a worker's total earnings and the salary figure used to calculate the mandatory benefit.

An agreement, company policy or established company practice can change the treatment of those payments. Where an individual or collective agreement, policy or practice treats a benefit as part of basic salary, it must be included in the calculation. A collective agreement is an arrangement negotiated between an employer and workers represented by their union.

Employees comparing their payment with a colleague's therefore need to look at both basic earnings and the rules applying in their workplace. Two workers with similar total take home earnings may have different amounts of qualifying basic salary because their pay packages contain different components.

Commissions and production earnings follow different examples

Employees receiving a fixed or guaranteed wage plus commissions are covered, but commissions are excluded when they are not part of basic salary. DOLE's illustration uses PHP 235,560.04 in fixed wages and PHP 30,000 in commissions. The resulting 13th month pay is PHP 19,630, calculated from the fixed wages alone.

In that example, adding the PHP 30,000 commission to the calculation would increase the result by PHP 2,500, since PHP 30,000 divided by 12 equals PHP 2,500. The treatment of the commission therefore matters directly to the amount payable.

Workers paid by the piece use their total earnings from production or output during the calendar year. This arrangement pays employees according to how much they produce rather than solely according to time worked. DOLE's example gives a worker with PHP 120,000 in production earnings a benefit of PHP 10,000.

Resignation and leave affect the calculation

An employee who leaves before December remains entitled to proportionate 13th month pay based on the basic salary earned during the year before resignation or termination. Being absent from the payroll at Christmas does not erase that entitlement.

DOLE illustrates this with an employee who resigned in September after earning PHP 177,236.28 in basic salary. Dividing those earnings by 12 gives PHP 14,769.69. The calculation uses the employee's actual earnings before departure, rather than assuming a full year of employment.

Unpaid absences also reduce the basic salary total. An illustration accompanying the calculation includes 10 days of leave without pay in September and another unpaid day in November. Less basic salary earned in those months means a smaller annual total to divide by 12.

Paid leave works differently when basic salary continues during the absence: the continuing salary remains in the annual calculation. Employees who took maternity leave and received a salary differential are expressly included among those covered by the guidelines. Their benefit should be checked against the qualifying salary recorded for the year.

Christmas Eve is the payment deadline

December 24, 2026, is the final day for employers to release the benefit. The advisory also requires a later compliance submission, creating two separate obligations: pay workers first, then report compliance to DOLE.

The department set out the payment deadline and monitoring responsibility in its statement:

"The 13th month pay must be released on or before December 24, 2026. Compliance with the payment requirements shall be monitored by the appropriate DOLE Regional, Field, or Provincial Office having jurisdiction over the workplace," DOLE said.

The key dates are:

• December 24, 2026: Deadline to release workers' 13th month pay.
• January 15, 2027: Deadline to submit the compliance report through the DOLE Online Compliance Portal.

DOLE's regional, field or provincial office responsible for the workplace will monitor compliance under Department Order No. 238, Series of 2023. Employers cannot obtain an exemption from payment or defer its release under the advisory.

Part VI of Labor Advisory No. 18, Series of 2018, states: "Every covered employer is required to make a report of the establishment's compliance with the 13th Month Pay Law to the nearest Regional Office not later than January 15 of each year."

The prescribed form, titled Report on Compliance with PD 851 (13th Month Pay Law), calls for the establishment's name and address, principal product or business, total employment, total number of workers benefitted, amount granted per employee, total amount of benefits granted, and the name, position and telephone number of the person giving information.

A mandatory payment, separate from a Christmas bonus

The 13th month payment is a required employment benefit. A Christmas bonus is a separate payment that generally depends on an employer's decision. Workers should distinguish the two when reviewing a payroll statement or an announcement about holiday payments.

Employment contracts, company policies and collective agreements may also provide additional benefits. The advisory sets the minimum 13th month payment; employees should check any applicable arrangements when determining their full entitlement.

Workers who receive less than the required amount may seek assistance from the DOLE office responsible for their workplace. A useful starting point is the annual basic salary total, the amount actually received and any agreement or policy governing payments included in basic salary.

Employers, meanwhile, need to review employees who left during the year alongside current staff, identify qualifying earnings correctly and meet both deadlines. For households employing kasambahay, checking the domestic worker's entitlement is also part of preparing for the December payment.

Key Points

• Eligible private sector rank-and-file employees must receive 13th month pay on or before December 24, 2026.
• The minimum payment is total basic salary earned during the calendar year divided by 12.
• Workers must have worked for at least one month during the year to qualify.
• Coverage includes eligible employees who resigned, were terminated, worked for multiple employers or took maternity leave and received a salary differential.
• Allowances and other specified benefits are generally excluded unless incorporated into basic salary by agreement, policy or established practice.
• Employers cannot obtain exemptions or defer payment and must report compliance by January 15, 2027.
• Workers receiving less than required can seek help from the DOLE office responsible for their workplace.