Final Pay, Separation & Retirement Pay Calculator Philippines

Leaving your job? Estimate what your employer owes you: your last salary, pro-rated 13th month pay, unused leave, and separation or retirement pay if the law requires it. Everything is computed on your device.

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Estimate your final pay

Example: 30000
Allowances you receive every month. They are included in separation pay (not in retirement pay).
Used for unused leave and retirement pay. Ask HR, or estimate it below.
Estimate my daily rate from my monthly salary

Daily rate = monthly salary × 12 ÷ days a year. These factors are DOLE suggestions; your employer may use another.

From January 1 to your last day. Used for your pro-rated 13th month pay.
Salary not yet paid since your last payday.
For example: other unused leaves your company converts to cash, a tax refund, or a cash bond to be returned.
Up to 3 decimals, e.g. 5.833. Estimate it below if you're not sure.
Estimate my unused leave days

5 days for each unused year, plus a pro-rated share for this year.

What you are owed when you leave

Your employer must release your final pay within 30 days from your last day, unless your company policy or contract is better, and give you a certificate of employment within 3 days of your request.(DOLE Labor Advisory No. 06-20)

Separation pay

ReasonSeparation pay
Installation of labor-saving devices1 month per year of service
Redundancy (your position is no longer needed)1 month per year of service
Reinstatement ordered but no longer possible1 month per year of service
Security guard: no assignment because of age1 month per year of service
Retrenchment to prevent losses½ month per year of service
Closure of the business NOT due to serious losses½ month per year of service
Disease (not curable within 6 months)½ month per year of service
Security guard: no assignment for 6 months½ month per year of service
Contractor's worker: no assignment for 3 months½ month per year of service
Closure of the business due to serious lossesNot required by law

You always get at least 1 month's pay. A fraction of at least 6 months counts as a whole year. Separation pay uses your latest salary including regular allowances.(Labor Code Arts. 298–299; DOLE Handbook Ch. 14)

Retirement pay

Retirement pay = daily rate × 22.5 days × years of service

For employees aged 60 to 65 with at least 5 years with the employer, when there is no better retirement plan. The 22.5 days are 15 days' salary, 5 days of service incentive leave, and 2.5 days (1/12) of 13th month pay. COLA and allowances are not included.(Labor Code Art. 302; DOLE Handbook Ch. 15)

Worked examples

Example 1: Redundancy after 7 years and 6 months

Example 2: Retiring at 60 after 20 years, ₱1,000 daily rate

Frequently asked questions

When should I receive my final pay?

Within 30 days from your last day, unless your company policy or contract gives you a shorter period. Your employer must also give you a certificate of employment within 3 days of your request. If there is a problem, you can go to the nearest DOLE office.

What is included in my final pay?

Everything your employer still owes you, whatever the reason you left: unpaid earned salary; cash conversion of unused service incentive leave; cash conversion of other unused leaves, if your company policy or agreement provides it; pro-rated 13th month pay; separation pay, if applicable; retirement pay, if applicable; refund of excess income tax withheld, if any; other pay stated in your contract or collective agreement; cash bonds or deposits due back to you. The pro-rated 13th month pay is your basic salary earned this year ÷ 12.

Do I get separation pay if I resign?

Not under the Labor Code. Separation pay is required only when your employer ends your employment for an authorized cause, such as redundancy, retrenchment or closure. You may still get it if your contract, collective bargaining agreement or company policy provides for it.

How is separation pay computed?

It depends on the reason. One month's pay for every year of service for: installation of labor-saving devices; redundancy (your position is no longer needed); reinstatement ordered but no longer possible; and security guard: no assignment because of age. Half a month's pay for every year of service for: retrenchment to prevent losses; closure of the business not due to serious losses; disease (not curable within 6 months); security guard: no assignment for 6 months; and contractor's worker: no assignment for 3 months. Either way you get at least 1 month's pay. A fraction of at least 6 months counts as a whole year, and the computation uses your latest salary including regular allowances.

How much is retirement pay?

At least 22.5 days of pay for every year of service: 15 days' salary, 5 days of service incentive leave, and 2.5 days (1/12) of 13th month pay. You qualify at age 60 to 65 with at least 5 years of service, unless your employer is one of the retail, service and agricultural establishments or operations regularly employing not more than ten employees (and the government). A retirement plan or CBA can give more, but not less.

What happens to my unused leave?

After one year of service you earn 5 days of service incentive leave a year. If you haven't used it when you leave, you are paid its cash value at your current daily rate, including a pro-rated share for the current year. It doesn't apply to: government employees (including government-owned or controlled corporations with original charters); persons in the personal service of another; managerial employees; officers or members of a managerial staff; field personnel and others whose time and performance are not supervised by the employer; employees already enjoying this benefit; employees already given at least 5 days of vacation leave with pay; employees of establishments regularly employing fewer than 10 employees; employees of establishments exempted by the Secretary of Labor because of their viability or financial condition. Managerial employees and managerial staff are left out only if their actual duties fit DOLE's definition of those roles, not just their job title.

Is separation pay or retirement pay taxed?

Separation pay received because of death, sickness or other physical disability, or any cause beyond your control, is not taxed. Retirement pay under the Labor Code (RA 7641) is not taxed. Retirement benefits from a private plan are tax-free only if the plan qualifies and you are at least 50 years old with at least 10 years of service with the same employer, once in your lifetime.

Related

Sources

  1. Labor Code of the Philippines (PD 442), Book III, Title I: Arts. 82, 83, 86, 87, 93, 94
  2. DOLE Labor Advisory No. 06, Series of 2020: Guidelines on the Payment of Final Pay and Issuance of Certificate of Employment
  3. DOLE Bureau of Working Conditions, Handbook on Workers' Statutory Monetary Benefits (2024 Edition)
  4. Presidential Decree No. 851 (13th Month Pay Law), December 16, 1975

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