PinoyRemote
Every December, my feed fills up with friends planning what to do with their 13th month pay. If you freelance, you probably already know the quiet answer to the question you just typed into Google: there is no 13th month pay for freelancers in the Philippines. No client is legally required to give you one.
I felt that shift myself. When I quit my stable full-time job to bet on myself as a VA, I gave up every benefit that came with being an employee, and the guaranteed December pay bump was one of them. Masakit ‘yon at first, especially here where Christmas practically runs on that extra month of salary.
This is not a sad post, though. Below: what Presidential Decree No. 851 actually says, the one case where a “freelancer” can still legally claim it, and how to build your own year-end bonus instead.
Key takeaways
- There is no 13th month pay for freelancers or independent contractors. PD 851 covers rank-and-file employees only, and you have clients, not an employer.
- Employees must receive it on or before December 24, computed as at least 1/12 of the basic salary they earned that year.
- Labels do not decide everything. If a “client” controls your hours, tools, and methods, the law can still treat you as an employee. On an employer of record or agency payroll, it is mandatory.
- You can build your own version. Move 8.5% of every client payment into a separate account all year.
Table of Contents
Is there 13th month pay for freelancers in the Philippines?
No. 13th month pay is an obligation the law places on employers, and as a freelancer you do not have one. Presidential Decree No. 851, signed on December 16, 1975, requires employers to pay their employees a 13th month pay not later than December 24 of every year. Memorandum Order No. 28, issued on August 13, 1986, removed the old ₱1,000 monthly salary ceiling, so every rank-and-file employee is covered no matter what they earn. Notice the word that repeats in every version of the law. Employees.
Whether you work through Upwork, OnlineJobs.ph, or a direct contract, you are an independent contractor. Your client pays your invoice for a service, the same way they pay their internet provider. There is no employer-employee relationship, so the whole framework of labor benefits, from 13th month pay to holiday pay to separation pay, does not attach to you. A foreign client sits further outside still, because a company in the US or Australia is not a Philippine employer under our Labor Code at all.
This is the same logic behind the rest of our setup. It is why we register with the BIR as self-employed instead of receiving a Form 2316, and why we pay our own SSS, PhilHealth, and Pag-IBIG. I am registered as a self-employed single proprietor on the 8% flat tax option, and nothing in that registration entitles me to a December bonus from anyone. Freelancing hands you higher earning potential and control over your time, and in exchange you become your own HR department. So stop waiting for a rule that does not exist, kasi that part is very fixable.
Who actually qualifies for 13th month pay under Philippine law?
Rank-and-file employees in the private sector who worked at least one month during the calendar year. The latest DOLE guidance, Labor Advisory No. 16, series of 2025, says the benefit is due regardless of position, designation, or employment status, and regardless of how wages are paid. That covers piece-rate workers, employees paid a fixed wage plus commission, employees with more than one employer, resigned or terminated employees (prorated), and women on maternity leave who received a salary differential. Managerial employees are the main exclusion, and government workers sit on a separate scheme entirely: a year-end bonus plus a cash gift under Republic Act No. 6686 as amended, not PD 851.
The computation is simple. It is not less than 1/12 of the total basic salary earned within the calendar year. An employee on ₱25,000 basic pay for all twelve months gets ₱25,000. Work six months and you get half. Overtime, allowances, and most cash benefits are not part of “basic salary,” which is why the actual amount sometimes disappoints people who expected their whole take-home pay to be doubled.
Two dates matter. Payment must land on or before December 24, and DOLE has been firm that no requests for exemption or deferment are allowed. Employers then file a compliance report through the DOLE online reporting portal by January 15 of the following year. The Revised Guidelines also let an employer split it, half before the opening of the regular school year and half by December 24, which is why your employed friends sometimes mention a mid-year “bonus” that is really an advance. Learn that 1/12 formula anyway. It is the blueprint you will copy later in this post.
What happens to your 13th month pay when you move from BPO to freelancing?
You lose it, along with every other employee benefit, the day you resign. A lot of us came into VA work from BPO, and this is the part of the transition that surprises people most in December of their first freelance year. As a call center agent you were rank-and-file, so the 13th month arrived automatically, on top of HMO, paid leaves, and employer-shared SSS contributions. On that same ₱25,000 basic pay, that was a guaranteed extra ₱25,000 every December. Once you freelance, all of it becomes your responsibility on day one.
Do not forget the prorated amount on your way out. If you resign in August, you are still legally entitled to a proportionate 13th month pay for January to August, normally released with your final pay. That money is yours under the same DOLE rules, so count it in your transition fund instead of treating it as a pleasant surprise.
There is a pricing lesson here too. If you set your freelance rate by dividing your old BPO salary into hours, you are underpricing yourself, because that salary came bundled with a 13th month your rate now has to cover. Spread across twelve months, a ₱25,000 basic salary is really worth about ₱27,000 before you even count HMO and leaves. Price with that missing month already baked in and the December gap closes before it opens. I break down the full math in my guide on moving from BPO to virtual assistant work.
When is a freelancer actually an employee who is owed 13th month pay?
Here is the exception worth knowing: the label on your contract does not decide your status, the reality of the working relationship does. Philippine labor law uses the four-fold test, and the heaviest factor is control. If a company dictates your shift, requires a time tracker and attendance, controls your tools, directs every step of the work, and treats you like staff in everything but name, an employer-employee relationship can exist even though your contract says “independent contractor.” Philippine law firms like Respicio and Co. are blunt about it: misclassified workers can still claim employee benefits, including 13th month pay. Three setups come up most often.
| Your setup | Are you an employee? | 13th month pay |
|---|---|---|
| Invoicing clients directly (Upwork, OnlineJobs.ph, direct contract) | No, you are an independent contractor | Not required, purely voluntary |
| Hired through an employer of record or a Philippine agency payroll | Yes, of the local entity that employs you | Mandatory by law |
| Called a “contractor” but controlled like staff by a local company | Possibly, under the four-fold test | Can be claimed if misclassification is proven |
The second row is the happy one. When a foreign company hires a Filipino through an employer of record like Remote or Deel, or a Philippine agency payroll like Penbrothers, a local entity legally employs you on that company’s behalf. That makes 13th month pay, SSS, PhilHealth, and Pag-IBIG part of the package by law, not by generosity.
The third row is the one to watch. A Philippine company that manages you exactly like staff while calling you a freelancer is a real gray zone, and it may be worth raising with DOLE or a labor lawyer. Everyone else, meaning most of us, sits in the first row.
Do clients or platforms ever give freelancers a year-end bonus?
Sometimes, but always as a voluntary gesture, never an obligation. Upwork, OnlineJobs.ph, and Fiverr do not give contractors any year-end pay, and nothing requires your direct clients to either. Plenty of long-term clients who work with Filipino VAs do learn about our 13th month culture and choose to match it. Some send a full extra month, some a flat holiday bonus, some nothing at all, and all three are within their rights.
I have talked to and worked with different types of clients over the years, so I can tell you the ones most likely to give are the ones where the relationship runs deep and you have shown steady value all year, not the ones you started with in November. If it matters to you contractually, negotiate it into the agreement when you land the client or at renewal, framed as a 13th month equivalent, since many foreign clients who have hired Filipinos before will recognize the term. The worst outcome is a polite no. Just plan your December as if it will not come.
How to build your own 13th month pay as a freelancer
Simplehan natin: pay yourself the way the law would have made an employer pay you. The PD 851 formula is 1/12 of annual basic pay, which is 8.33% of everything you earn. So the whole system is one rule. Every time a client payment lands, move 8.5% of it into a separate account you do not touch until December. I round up because freelance income dips and rises. Earn ₱50,000 in a month and that is ₱4,250 set aside. Do it all year and you release yourself roughly ₱51,000 in December, possibly more than your old BPO version, because it is computed on your whole income and not just basic pay.
Here is what I would do if I were just starting out: treat that transfer as a bill, not a decision. Freelance income is uneven, so the month you feel rich is the month you overspend, and the month a client pays late is the month you skip the transfer and promise to catch up. Move the money the same day the payment clears, before you budget anything else, the way SSS was deducted before your BPO salary ever reached you. If a slow month makes 8.5% impossible, move something smaller instead of nothing. The habit is what you are protecting.
Where you park it matters more than it seems. Keep it out of your everyday GCash or main checking account, because visible money gets spent. A separate digital bank account works well here: opening one takes minutes with a valid ID, the interest beats a regular passbook savings account, and deposits are insured by the PDIC up to ₱1,000,000 per depositor per bank, after coverage doubled from ₱500,000 on March 15, 2025. I am deliberately not quoting a rate, because digital bank rates here move every few months, so check the bank’s own page first. The separation is the real point.
Then release it the way an employer would, in the first or second week of December, so it covers Noche Buena, gifts, and the January bills that follow (tuition, and your quarterly tax deadlines land in that stretch too). One tax note, since we handle our own: the ₱90,000 tax-free ceiling on 13th month pay and other benefits under the TRAIN law is for employees. Your fund is your own business income, already covered when you pay your 8% or graduated income tax, so moving it in December triggers nothing new.
Once that habit sticks, stack it: 8.5% for December, plus separate percentages for taxes and for your SSS, PhilHealth, and Pag-IBIG contributions. Freelancing did not remove the system. It just made you the one running it.
One honest note
This post is general information based on Presidential Decree No. 851, Memorandum Order No. 28 (1986), the Revised Guidelines on the Implementation of the 13th Month Pay Law, DOLE Labor Advisory No. 16, series of 2025, and the TRAIN law’s ₱90,000 ceiling, all checked as of July 2026. It is not legal or tax advice. DOLE issues a fresh 13th month advisory almost every year, bank rates move constantly, and misclassification questions depend heavily on your specific facts. If you think your “freelance” setup is really employment, talk to DOLE, your RDO, or a Philippine labor lawyer or BIR-accredited tax professional first.
Frequently asked questions
Is a client legally required to give a freelancer 13th month pay in the Philippines?
No. PD 851 obligates employers to pay 13th month pay to their rank-and-file employees. A freelancer has clients, not an employer, so no client, local or foreign, is legally required to pay it. Anything sent in December is a voluntary bonus.
I work full time for one foreign client. Does that entitle me to 13th month pay?
Full-time hours for one client do not by themselves make you an employee, and a foreign company is not a Philippine employer, so PD 851 does not reach it. The picture changes on an employer of record or Philippine agency payroll, because then a local entity legally employs you and the benefit becomes mandatory.
How do I compute my own 13th month equivalent as a freelancer?
Copy the legal formula: 1/12 of what you earn in the year, or 8.33% of every payment. Set aside 8.5% of each client payment in a separate account all year, then release it in early December. On ₱50,000 a month, that is ₱4,250 monthly and roughly ₱51,000 by December.
Is 13th month pay taxable in the Philippines?
For employees, 13th month pay and other benefits are exempt from income tax up to ₱90,000 in total per year under the TRAIN law, and only the excess is taxed. For freelancers that ceiling is irrelevant, since a self-funded December fund is your own income, already taxed under your 8% or graduated rate.
I resigned from my BPO job mid-year to freelance. Do I still get 13th month pay from my old employer?
Yes, a prorated amount. Resigned and terminated employees are entitled to 13th month pay proportional to the months they actually worked that calendar year, normally released with the final pay. Work January to August and you should receive 8/12 of your monthly basic salary.
Nobody hands you the bonus now, so build it yourself
The whole post in one line: the law gives 13th month pay to employees, you are not one, and the two narrow exceptions are misclassification and being on an employer of record or agency payroll. Everything else is on you, and “on you” is very doable at 8.5% of every payment.
I have been on both sides of this. I know what it feels like when the 13th month arrives automatically, and I know the first freelance December where it did not. The version you build yourself honestly feels better, because nobody approved it and nobody delayed it. Start with your very next client payment, even if it is already mid-year, and if you are still setting up the foundations, get your BIR registration sorted first so the rest of your freelance finances stand on something solid. Kaya mo ’yan.
Sources
- Presidential Decree No. 851, Requiring All Employers to Pay Their Employees a 13th-Month Pay, Chan Robles Virtual Law Library (decree dated December 16, 1975; accessed July 30, 2026)
- Memorandum Order No. 28, s. 1986, Official Gazette of the Republic of the Philippines (issued August 13, 1986; accessed July 30, 2026)
- Revised Guidelines on the Implementation of the 13th Month Pay Law, Chan Robles Virtual Law Library (accessed July 30, 2026)
- PMAP, Circular No. 2025-088 on DOLE Labor Advisory No. 16, Series of 2025, Guidelines on the Payment of the Thirteenth-Month Pay (2025; accessed July 30, 2026)
- DOLE Bureau of Working Conditions, DOLE-BWC Urges Employers to Release 13th-Month Pay Not Later Than December 24 (2025; accessed July 30, 2026)
- DOLE, No Delays Allowed on 13th-Month Pay (December 2025; accessed July 30, 2026)
- DOLE Bureau of Working Conditions, FAQs on 13th Month Pay (2024; accessed July 30, 2026)
- Republic Act No. 6686, Official Gazette of the Republic of the Philippines (December 14, 1988; accessed July 30, 2026)
- Respicio and Co., Are Project-Based Employees Entitled to 13th Month Pay Under PD 851 in the Philippines? (accessed July 30, 2026)
- Rappler, Ask the Tax Whiz: A Filipino Employee’s Guide to the 13th-Month Pay (accessed July 30, 2026)
- Tax and Accounting Center, Tax-Exempt Benefits under TRAIN RA 10963 Philippines (accessed July 30, 2026)
- Philippine Deposit Insurance Corporation, Maximum Deposit Insurance Coverage (increase effective March 15, 2025; accessed July 30, 2026)
- Penbrothers, 13th Month Pay in the Philippines: Essential Guide for Remote Work Compliance (accessed July 30, 2026)
