Yes, a mid-year bonus is fundamentally different from a 13th-month pay. In the private sector, 13th-month pay is a mandatory benefit mandated by law, while a mid-year bonus is usually a discretionary reward or a contractual perk offered at the employer’s discretion.
In the government, mid-year bonus is granted to government employees by virtue of Executive Order (EO) No. 201, s. 2016, entitled “Modifying the Salary Schedule for Civilian Government Personnel and Authorizing the Grant of Additional Benefits for Both Civilian and Military and Uniformed Personnel“, as implemented under DBM Budget Circular No. 2017-2 entitled “Rules and Regulations on the Grant of the Mid-Year Bonus for FY 2017 and Years Thereafter”.
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13th Month Pay vs. Mid-Year Bonus
Nature
The 13th month pay is a mandatory benefit for workers in the Philippines required under Presidential Decree No. 851 approved by then President Ferdinand Marcos Sr. Government employees also have 13th month pay in the form of a year-end bonus plus a cash gift of ₱5,000.00.
On the other hand, the mid-year bonus is discretionary, meaning, it may not be given to private sector employees as their employers are not required by any law to provide the same. In the government sector however, the mid-year bonus is mandated (required) under EO No. 201, s. 2016.
Eligibility
The 13th month pay is required for all rank-and-file employees in the private sector who have worked for at least one month during the calendar year. Similarly, the 13th month pay in the form of year end bonus of government employees shall be granted to employees who met the conditions prescribed by the Department of Budget and Management (DBM) under existing guidelines which include, among others, meeting the 4-months service requirement, must be in government service as of October 31 of the current year. [see Budget Circular No. 2016-4 and 2024-3 for more details]
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Timing
The 13th month pay of private sector employees must be paid on or before December 24 of the current year whereas the year end bonus of government employees shall be paid “simultaneously with their 1st payroll for November of the current year” [see Budget Circular No. 2024-3 to learn more]
Meanwhile, there’s no prescribed date when the mid year bonus for private sector, if any, shall be paid. On the other hand, the mid year bonus of government employees is paid not earlier than May 15 of the current year.
Amount/Computation
The 13th month pay, year end bonus and mid year bonus are equivalent to or computed as follows:
13th month pay (private sector employees): Equivalent to 1/12 of the total basic salary earned by the employee within the calendar year.
Year End Bonus (government employees): Equivalent to one (1) month basic salary as of October 31 of the current year.
Mid Year Bonus (private sector employees): No prescribed amount. It would depend on company policy or discretion of the employer.
Mid Year Bonus (government employees): Equivalent to one (1) month basic salary as of May 15 of the current year.
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Summary
13th Month Pay and Year End Bonus
Private sector employees are entitled to receive 13th month pay equivalent to 1/12 of the total basic salary to be given not later than December 24 of the current year as mandated under Presidential Decree No. 851 and pertinent labor laws, rules and regulations. On the other hand, government employees are likewise entitled to receive 13th month pay from the government in the form of year end bonus which is equivalent to one (1) month basic salary as of October 31 of the current year to be paid in November of the current year.
Mid Year Bonus
In contrast, mid year bonus is not mandatory for private sector employers, hence, private sector employees may or may not receive mid year bonus. On the other hand, government employees are entitled to mid year bonus equivalent to one (1) month basic salary to be paid not earlier than May 15 of the current year, as mandated under EO No. 201, s. 2016.
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