Do OFWs get 13th-month pay? PD 851 and why December is padala season

Every December the same expectation lands in the family group chat, and it has a legal shape behind it. In the Philippines, a private-sector worker is owed a 13th-month pay before Christmas, and the person abroad who funds the December ask often has no 13th month of their own. Here is what the law actually requires, and where the 13th month ends and a Christmas bonus begins.

13th-month pay vs Christmas bonus, under Philippine law Posted terms — see sources

	13th-month pay (PD 851)	Christmas bonus
Legal basis	Presidential Decree No. 851 (1975), as amended	None; no law requires it
Mandatory or discretionary	Mandatory; legally demandable	Discretionary; given at the employer's option
How it is sized	At least 1/12 of the total basic salary earned in the calendar year	Any amount the employer sets
Deadline	Not later than December 24 each year	No legal deadline
Who is covered	Rank-and-file who worked at least one month in the year	Whoever the employer chooses

Sourced to PD 851 (Official Gazette) and the DOLE Bureau of Working Conditions FAQs on 13th Month Pay, checked 2026-09-03. These rules bind Philippine private-sector employment; a job held abroad is governed by that host country's rules.

How to read this table

The table describes what Philippine law asks of a Philippine employer. The left column is the point of difference. A 13th-month pay is a benefit the law names, sizes, and dates; a Christmas bonus is a separate voluntary payment that carries none of those obligations. The two are often spoken of as one thing, and in law they are not.

What PD 851 requires

The decree is short and specific. Section 1 states: “All employers are hereby required to pay all their employees receiving a basic salary of not more than P1,000 a month, regardless of the nature of their employment, a 13th-month pay not later than December 24 of every year” (PD 851, Official Gazette, checked 2026-09-03). That original ₱1,000 monthly ceiling was removed by Memorandum Order No. 28 in 1986, so as amended the benefit covers all rank-and-file private-sector employees, regardless of position or how they are paid, who have worked at least one month during the calendar year (DOLE Bureau of Working Conditions, checked 2026-09-03).

Two details fix the size and the timing:

The amount. The Department of Labor and Employment states the 13th-month pay is not less than one-twelfth of the total basic salary the employee earned within the calendar year (DOLE, checked 2026-09-03). It scales with a year’s basic pay, and someone who worked only part of the year receives a proportionate share.
The deadline. PD 851 requires payment not later than December 24 of every year. DOLE also allows an employer to pay one-half of it before the opening of the regular school year, with the balance on or before December 24 (DOLE, checked 2026-09-03). That December 24 date is the calendar reason the padala peak clusters in the days before Christmas: the family’s own bonus lands in the same window the overseas send is expected.

What counts as “basic salary”

Because the formula runs on basic salary earned, what is inside that figure decides the size of the 13th month. The DOLE Revised Guidelines draw the line.

Included in the computation

Basic salary earned during the calendar year, for work rendered
Salary-related benefits only where they have been treated as part of basic salary by contract, a collective bargaining agreement, company practice, or policy

Excluded from basic salary (per the DOLE Revised Guidelines)

Overtime pay
Premium pay for rest days and special holidays
Holiday pay
Night shift differential
Cost-of-living allowance (COLA)
Cash value of unused vacation and sick leave credits
Profit-sharing payments

Those items are excluded unless an employer has folded them into basic salary through an agreement or an established practice (DOLE Bureau of Working Conditions, checked 2026-09-03). The default is the narrower base: the pay for hours actually worked, divided by twelve.

Who the rule covers, and who it does not

PD 851 reaches rank-and-file employees in the private sector. It does not reach everyone in the family who works. Several groups sit outside the mandatory rule, per the DOLE Revised Guidelines (DOLE Bureau of Working Conditions, checked 2026-09-03), which matters when the person back home is not on a standard salary.

Outside the mandatory 13th-month rule

Managerial employees

The rule is for rank-and-file staff, not those with managerial rank.
Paid purely on results

Workers paid solely on commission, on a boundary or task basis, or a fixed amount for specific work, with no fixed wage.
Employer already pays an equivalent

Employers already giving a 13th-month pay or its equivalent are treated as compliant.
Government service

Government employees fall under separate rules, not PD 851.

A relative who runs a sari-sari store, drives on a boundary arrangement, or holds a managerial post is not owed a 13th month by this law, even though the same December expectation may still land. The mandatory benefit is a feature of standard rank-and-file employment, not of every kind of work.

A worked example

The method is one line of arithmetic: total basic salary earned in the year, divided by twelve. The table below shows it on invented figures, so the mechanism is clear without standing in for anyone’s real pay.

How the 1/12 method works Illustrative example — not posted rates

Situation	Total basic salary earned	1/12 = 13th-month pay
Full year at ₱20,000/month basic	₱240,000	₱20,000
Eight months at ₱20,000/month basic	₱160,000	₱13,333.33

Illustrative only. The formula — at least one-twelfth of the total basic salary earned in the calendar year — is from PD 851 and the DOLE FAQ (checked 2026-09-03). The peso amounts are made up for the example and are not anyone's posted pay.

The second row is the partial-year case: someone who joined mid-year, or left before December, earns a proportionate amount rather than a full twelfth of a full year’s salary.

The ₱90,000 tax-exempt ceiling

There is a tax line on top of the labor rule. Under Republic Act No. 10963, the TRAIN law, which amended the National Internal Revenue Code, 13th-month pay and other benefits are excluded from taxable income up to a stated ceiling: the total exclusion “shall not exceed Ninety thousand pesos (₱90,000)” (RA 10963 §9, amending NIRC §32(B)(7)(e), checked 2026-09-03). The ₱90,000 is a combined annual total. It covers the 13th-month pay together with other benefits such as productivity incentives and a Christmas bonus, and any amount above the ceiling is included in taxable income for the year. That is the statute’s own text, quoted as law, not tax guidance.

The asymmetry on the sender’s side

Here is the part the payroll explainers leave out. PD 851 binds Philippine employers. An OFW employed abroad is paid under the host country’s rules, and a 13th-month pay is not a universal entitlement outside the Philippines, so whether a worker abroad receives one turns entirely on their country and their employer.

So the December pattern has a lopsided shape. The family back home is anchored to a 13th month that arrives by December 24, and the expectation of a Christmas send is sized, consciously or not, to that bonus. The person most expected to provide it, the one working abroad, is often the one who never gets a 13th month at all. That is not a complaint and not a reason to send more or less. It is the mechanism behind the December pressure, named plainly so it is easier to plan around than to just absorb.

Where the money side lives

This article explains a rule and a dynamic; it does not tell anyone what or how much to send. The 13th-month facts here are sourced to PD 851, the DOLE Bureau of Working Conditions, and RA 10963, and dated. The money side, how a paycheck can be split across abroad, padala and savings, and how a Christmas send can be paced, is kept on its own pages: the OFW monthly budget split, the family-pressure piece when the whole family needs help, budgeting the Christmas padala across the month, and exchange rate vs fees on a remittance. None of them, and not this page, carries a “you should send X” — the numbers are the reader’s to decide.

Common questions

Do OFWs get 13th-month pay? Not from Philippine law for work performed abroad. Presidential Decree No. 851 binds employers in the Philippines, so it reaches a domestic private-sector job, not employment overseas. Whether an OFW receives a 13th month depends on the host country’s rules and their employer, and a 13th-month payment is not a universal entitlement outside the Philippines (PD 851, checked 2026-09-03). That is the asymmetry behind December: the family at home is owed a 13th month by December 24, while the sender abroad often is not.

Is 13th-month pay the same as a Christmas bonus? No. The Department of Labor and Employment distinguishes them: 13th-month pay is a mandatory benefit under PD 851 that an employer is legally required to pay, while a Christmas bonus is discretionary, given at the employer’s option, and not a demandable obligation unless it has been folded into the wage or an express agreement (DOLE, checked 2026-09-03). One is owed; the other is a gift.

When is 13th-month pay released in the Philippines? Presidential Decree No. 851 requires it to be paid not later than December 24 of every year (PD 851, checked 2026-09-03). An employer may pay one-half before the opening of the regular school year, with the balance on or before December 24, per the Department of Labor and Employment (DOLE, checked 2026-09-03). That December 24 deadline is why the padala peak clusters in the days before Christmas.

How is 13th-month pay computed? The Department of Labor and Employment defines it as not less than one-twelfth of the total basic salary the employee earned within the calendar year (DOLE, checked 2026-09-03). In practice that is a year’s basic pay divided by twelve. It runs on basic salary earned, so overtime pay, holiday pay, night shift differential, premium pay, COLA, the cash value of unused leave, and profit-sharing are excluded unless an employer has treated them as part of basic salary. Partial-year service earns a proportionate amount.

Is 13th-month pay taxable in the Philippines? Up to a ceiling it is not. Under Republic Act No. 10963, the TRAIN law, 13th-month pay and other benefits are excluded from taxable income, and the law caps that total exclusion so it “shall not exceed Ninety thousand pesos (₱90,000)” (RA 10963 §9, amending NIRC §32(B)(7)(e), checked 2026-09-03). The ₱90,000 is a combined annual figure for the 13th month plus other benefits such as a Christmas bonus; any amount above it is included in taxable income for the year.