YOU DO NOT NEED TO COMPLETE A FULL YEAR TO QUALIFY

The rules cover private-sector rank-and-file employees who have worked for at least one month during the calendar year. Employment status and the way wages are paid do not, by themselves, remove that coverage. Being newly hired or still on probation is therefore not enough reason to withhold the benefit from an otherwise covered employee.

The salary ceiling in the original 1975 decree is no longer the rule. Memorandum Order 28 removed it in 1986, extending the requirement to rank-and-file employees regardless of salary level. This explainer concerns that private-sector benefit; government year-end bonuses follow separate rules.

ADD THE BASIC SALARY EARNED, THEN DIVIDE BY TWELVE

The minimum amount is one-twelfth of the total basic salary earned during the calendar year. It is not automatically the employee’s latest monthly salary, especially when the person joined midway through the year or received a pay increase.

For a simple hypothetical example, someone who earns exactly ₱20,000 in basic salary for each of twelve months has ₱240,000 in annual basic earnings. Dividing that by twelve gives ₱20,000. If the same person earns exactly ₱20,000 for only six months, the total is ₱120,000 and the corresponding amount is ₱10,000.

Those examples assume the stated basic salary was actually earned for every month counted. Where pay changes or unpaid periods affect the annual total, use the payroll records rather than multiplying the latest rate by twelve.

CHECK WHAT COUNTS AS BASIC PAY

Total take-home pay is not the same as basic salary. Overtime, premiums, allowances and other payments may appear beside basic pay on a payslip without automatically forming part of the 13th-month-pay computation. Their treatment can also depend on whether they have been integrated into basic salary under the applicable agreement or company practice.

Commissions need particular care. DOLE’s current explanation excludes commissions that are not part of basic salary; that should not be read as a blanket rule excluding every commission. Supreme Court decisions have distinguished between different commission arrangements, including sales commissions that form part of a worker’s wages.

A worker paid a fixed wage plus commission should ask payroll which payments were included and why. The contract, payroll breakdown and actual compensation arrangement are more useful than the label “commission” alone.

LEAVING THE JOB DOES NOT ERASE THE AMOUNT ALREADY EARNED

Covered employees who resign or whose employment ends before year-end remain entitled to the proportionate benefit based on basic salary earned during their service that year. The computation does not require them to remain employed until Christmas.

For example, an employee who earned a total of ₱180,000 in basic salary before leaving has a corresponding minimum 13th-month amount of ₱15,000. Any amount already paid for that same entitlement must be considered when checking what remains due; the example is not an additional payment on top of a fully settled benefit.

Keep the final-pay breakdown and earlier payslips. They help show both the earnings used in the computation and any portion of the benefit already released.

CHECK THE PAYMENT DATE AND KEEP THE RECORDS

DOLE’s advisory sets December 24, 2026 as the deadline and says applications for exemption or deferment will not be accepted. An employer’s payout announcement should therefore give workers a date that complies with that requirement.

Keep payslips, the computation, payment confirmation and any written exchange about a shortfall. If the amount or payment remains unresolved, seek assistance from the DOLE regional, field or provincial office covering the workplace.

A separate Christmas bonus may depend on a contract, collective agreement or company practice. Check what each payment is for instead of assuming every year-end amount has the same basis or that a promised extra bonus automatically replaces the required benefit.