Separation Pay Calculator Philippines

How separation pay is computed

Separation pay only applies to authorized-cause terminations — situations the employer initiates for business or health reasons, not employee misconduct. The Labor Code sets two different floors depending on the exact cause:

Retrenchment, closure not due to serious losses, or disease — at least half a month's pay for every year of service, or one month's pay, whichever is higher.
Redundancy or installation of labor-saving devices — at least one full month's pay for every year of service, or one month's pay, whichever is higher.

Years of service aren't simply rounded down. A fraction of at least six months counts as one whole additional year — so 4 years and 7 months of service is treated as 5 years for this computation, while 4 years and 3 months stays at 4.

Quick Answers to Common Questions

Does this apply if I resigned or was fired for cause?▼

No. Separation pay under this computation is only for authorized-cause terminations initiated by the employer, such as retrenchment, closure, redundancy, or disease. Employees who resign voluntarily or are dismissed for just cause (e.g. misconduct) are generally not entitled to separation pay unless a company policy or employment contract says otherwise.

What counts as "monthly salary" here?▼

Your regular basic monthly salary at the time of separation, excluding allowances and benefits not integrated into basic pay — unless your employment contract defines it more generously.