Jessie
As July 2025 approaches, private employees in the Philippines are eager for clarity on how the updated 13th month pay guidelines will affect them.
With the Department of Labor and Employment (DOLE) releasing new directives, the revised rules address concerns regarding eligibility, pro-rata distribution, and employer compliance.
This article breaks down the key changes, updates, and what workers need to know.
What’s New in the July 2025 13th Month Pay Policy?
The revised 13th month pay guidelines for 2025 introduce crucial changes that directly impact private sector employees.
Starting July 2025, all rank-and-file employees who have worked for at least one month during the calendar year are entitled to receive the 13th month pay.
This is a significant update, as it offers clearer definitions and considerations regarding basic salary and other pay components like commissions and allowances.
One of the most notable changes is the inclusion of performance-based bonuses and sales incentives in the calculation of the 13th month pay.
These may be partially considered in determining the final payout, depending on the employee’s contract and company policies.
Employers are strongly advised to review and update their employee contracts to ensure they comply with the new rules.
Updated 13th Month Pay Computation – July 2025
The following table provides a detailed breakdown of how the 13th month pay is computed based on different work scenarios:
| Employment Duration | Monthly Basic Pay | Total Work Months | Estimated 13th Month Pay |
|---|---|---|---|
| Full 12 months | PHP 18,000 | 12 | PHP 18,000 |
| 6 months only | PHP 20,000 | 6 | PHP 10,000 |
| 3 months only | PHP 15,000 | 3 | PHP 3,750 |
| With variable income | PHP 12,000 + bonuses | 12 | PHP 13,200* (approximate) |
*Note: Bonuses are calculated proportionally, depending on company policy and contract clauses.
Employer Responsibilities and Compliance Measures
Employers must issue the 13th month pay on or before December 24, 2025. However, mid-year labor reviews are being conducted, and employees who leave the company before year-end must still receive prorated 13th month pay.
The DOLE is also stepping up compliance audits to ensure that all private entities adhere to the labor code updates.
Employers who fail to comply or delay payments may face legal penalties, including administrative sanctions.
To avoid potential disputes, it is recommended that companies maintain transparent payroll systems and issue clear breakdowns of the computations to employees.
How the Labor Code Update 2025 Impacts Workers
The revised 13th month pay policy strengthens protections for private sector workers, particularly those employed on contractual or project-based terms.
The updated Labor Code introduces clearer metrics to determine eligibility and mandates that employees formally acknowledge the receipt of their 13th month pay benefits.
This change is designed to reduce disputes and ensure transparency between employees and employers.
For overseas Filipino workers (OFWs) returning to the Philippines or those hired mid-year, the new guidelines provide a fairer assessment of partial pay entitlements.
These adjustments align with the government’s efforts to improve worker welfare, especially in response to inflation and rising living costs.
The July 2025 13th month pay guidelines represent a significant shift in the Philippines’ labor regulations.
Private workers can now expect more transparent and equitable pay distribution, especially those with variable income or non-traditional pay structures. Employers must ensure compliance with the new rules to avoid penalties.
For workers, these changes ensure a fairer, clearer process for receiving their 13th month pay.
FAQs
Who is eligible for the 13th month pay in July 2025?
All rank-and-file employees in the private sector who have worked for at least one month during the year are eligible for the 13th month pay.
How is the 13th month pay calculated for employees with variable income?
Employees with variable income like bonuses will have their 13th month pay calculated based on their basic salary plus the proportionate value of any bonuses earned.
When should employers release the 13th month pay for 2025?
Employers must release the 13th month pay on or before December 24, 2025, but those leaving employment before year-end must still receive a prorated amount.