Is the 13th-month pay taxable under the TRAIN law?

Last Updated on 04/28/2020 by FilipiKnow

It depends.

Under the TRAIN Law1, the 13th-month pay and other benefits received by an employee not exceeding Php 90,000 are excluded from the computation of gross income, and thus, exempt from taxation.

Hence, if you receive a 13th-month pay amounting to more than Php 90,000, the excess of said amount is included in your gross income and shall be taxable.

Related: TRAIN Law Tax Table: A Guide to Computing Income Tax

Go back to the main article: How to Compute 13th Month Pay in the Philippines: An Ultimate Guide

 

Reference.

  1. Republic Act 10963, “Tax Reform for Acceleration and Inclusion (TRAIN)” (2017).