13th Month Pay – Is It Subject For Tax Deduction in the Philippines?

Guide on the Release of the 13th Month Pay to Employees in PH

13TH MONTH PAY – Here is a guide on whether or not this year-end pay to the employees is subject for tax deduction in the Philippines.

Every December, one of the most awaited things of Filipino employees is the 13th month pay. It is a year-end pay that helps a lot of people cope with their personal needs.

Also, a part of the said pay-out is usually used for the expenses during the holiday season. One of the longest celebrations of the Christmas season is in the Philippines and Filipinos love to prepare a lot of food and give each other gifts.

Are you also an employee who is set to receive his or her 13th month pay soon? Are you worried about the possible deductions or whether or not it is subject for tax deduction?

Based on an article on the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the tax deduction on the 13th month pay depends on the amount to be received by the employee. Let us first talk on how to get your estimated year-end pay.

Formula:

• Total Salary Received for the Entire Year ÷ 12 = 13th Month Pay

For example:

• Php 120,000.00 ÷ 12 = Php 10,000.00

Based on the primer, if your 13th month pay is Php 90,000.00 and below, it is not subject for tax deduction. It is the current exemption cap after it was raised from Php 82,000.00.

With regards to the specific tax per amount to be implemented on the year-end pay-out that goes higher than Php 90,000.00, it was not specified in the primer. More updates may be posted soon.

Thank you for visiting our website. We hope we have helped you in regards to this. You may keep coming back for more informative guides.

READ ALSO: SSS To Release 13th Month & December Pension Starting December 1