Executive summary

Family drivers employed by a private household are generally not legally entitled to 13th-month pay. They fall outside the coverage of the 13th-Month Pay Law and are expressly excluded from the definition of “kasambahay” under the Domestic Workers Act. By contrast, company or business-employed drivers are entitled to 13th-month pay as rank-and-file private-sector employees. That said, a contract or established employer practice can create a right to a 13th-month benefit even where the statute does not require it.

Legal framework

1) Presidential Decree No. 851 (the 13th-Month Pay Law)

Coverage. All rank-and-file employees in the private sector are entitled to a 13th-month pay, regardless of their position, designation, or manner of payment, as long as they have worked for at least one month in a calendar year.
Key exemption relevant to family drivers. PD 851 and its implementing rules historically exclude “household helpers” or persons in the personal service of another (i.e., those employed by a private household rather than a business). A family driver hired by a household fits this category, so the statutory benefit does not attach.

2) Republic Act No. 10361 (the “Batas Kasambahay” or Domestic Workers Act) and its IRR

Who is a kasambahay? A domestic worker who regularly performs work in or for a household (e.g., househelp, yaya, cook, laundry person, gardener, etc.).
Express exclusion. Family drivers are excluded from the definition of “kasambahay.” Because of that exclusion, the kasambahay-specific rules on 13th-month pay do not apply to family drivers.
Practical upshot. Household employers must comply with kasambahay benefits (including 13th-month pay) for covered domestic workers—but not for family drivers, who sit outside that statute.

Bottom line under the statutes: a family/household driver = not covered; a company/business driver = covered.

When a driver is entitled to 13th-month pay

A. Company or business-employed drivers

If the driver is hired by a company or any business enterprise (e.g., assigned to deliver goods, drive executives, or support operations), they are a rank-and-file private-sector employee under PD 851 and are therefore entitled to 13th-month pay.

Computation (standard rule):

13th-month pay = 1/12 of the employee’s basic salary actually earned within the calendar year.
Basic salary excludes allowances and monetary benefits not part of the basic pay unless integrated by contract or long practice.
Proration applies if the employee worked less than a full year (e.g., hired mid-year, resigned, or terminated).

Payment deadline: not later than 24 December of each year (many employers split it—mid-year + December).

B. Contract, policy, or established practice

Even for family drivers, a 13th-month benefit may become legally demandable if:

It is expressly granted in a written contract, handbook, or policy; or
It has been consistently and deliberately given over a significant period (Philippine jurisprudence often treats 3 or more consecutive years of uniform, unconditional grants as an established company practice that cannot be unilaterally withdrawn).

If the household has regularly paid a “13th-month” or year-end bonus to a family driver on the same terms and schedule for years, that practice can ripen into an enforceable benefit.

Common scenarios and how the law applies

Family driver hired by a household
- Default rule: No statutory entitlement.
- Exception: There’s a contract granting it, or a consistent long-standing practice of paying it.
Driver hired by the family’s corporation but also drives the family
- Look at the true employer and where services are principally rendered.
- If the driver is on the company payroll and supports business operations—even if occasionally driving family members—they are typically covered by PD 851.
Household pays the driver but also uses him for family business errands
- If the primary relationship is still a household engagement and the business use is incidental, the driver will generally be treated as a family driver (no statutory entitlement).
- If, however, the substantial, regular duties are for the business, the safer view is to treat the driver as a business employee (entitled).
Driver supplied by an agency
- Determine the employer of record and actual control. If the driver is deployed to a business and supervised by it, PD 851 applies. If deployed to a household as a family driver, the default no-coverage rule applies (subject to contract/practice).

Tax treatment (when 13th-month is paid)

The 13th-month pay and other bonuses are income-tax-exempt up to ₱90,000 in a year (under TRAIN-era rules).
Any excess over ₱90,000 forms part of taxable compensation income.
This tax rule matters for company drivers and for family drivers only if the benefit is contractually or customarily provided.

Compliance tips & documentation

For household employers (family drivers)

Spell out in a simple written agreement that no 13th-month pay is provided, if that is the intent, and avoid creating a contrary practice (e.g., by giving a labeled “13th-month” every December).
If you want to give a discretionary gift, label it “ex gratia, non-precedential” and vary the amount and timing to avoid an implied practice.

For businesses (company drivers)

Track basic salary actually earned for the year and compute 1/12 thereof.
Pay not later than 24 December (or via an authorized split schedule).
Keep payroll records showing computation and receipt.

For drivers

Identify your true employer. Are you on a household payroll or a company payroll?
Check your contract (if any) and past payouts. If you’ve been regularly receiving a 13th-month-like payment for years, you may have a practice-based right even as a family driver.

Quick checklist

Family driver (household): Not covered by PD 851; excluded from “kasambahay”; no statutory 13th-month.
Company/business driver: Entitled to 13th-month as rank-and-file.
Contract/practice can override: Yes—express grant or consistent long-standing practice can make it demandable.
Computation when covered: 1/12 of basic salary actually earned; prorated if less than a year.
Pay-out deadline: On or before 24 December.
Tax: Exempt up to ₱90,000 per year (excess taxable).

Practical examples

Example 1 (No entitlement): A family in Quezon City hires a driver to bring the kids to school and the parents to errands. He’s paid by the household. There’s no contract granting a 13th-month benefit, and the family has not consistently given a year-end “13th-month.” → No legal entitlement.
Example 2 (Entitled): A logistics firm employs a driver to deliver goods on scheduled routes. He’s on company payroll. → Entitled to 13th-month pay computed as 1/12 of basic salary actually earned.
Example 3 (Practice-based entitlement): A household has given its family driver a December “13th-month” in the same amount each year for 5 years without conditions. → Benefit may have become a demandable company practice.

Bottom line

If you’re a family driver engaged by a private household, the default rule is no statutory 13th-month pay. If you’re a driver employed by a business, you are entitled to it. And contracts or consistent practices can create or expand rights beyond the default legal baseline in either case.