Separation pay by ground, with credited years of service.
The post is surplus to a business that can still afford to pay, so the higher rate applies.
What it's for
Estimate the separation pay owed when your employer ends your job for an authorised cause, such as redundancy, retrenchment or closure.
Before you start
Have your termination notice, which should name the reason your job ended, your payslip for your monthly basic salary, and the dates you started and finished.
Pick the reason
In Why was employment ended?, choose the reason in your notice, such as Redundancy or Retrenchment to prevent losses. Read the line under the box — two reasons that sound alike can pay very different amounts, so this changes the answer the most.
Type your basic salary
In Monthly basic salary, type your monthly basic pay as plain digits, without commas or a ₱ sign.
Give your length of service
Press By dates and set when you Started and when the job Ended, or press By years and type your Years of service. A part year such as 4.5 is fine; the page decides whether it counts as a whole year.
Calculate and read the notes
The answer updates as you type. Press Calculate to bring it into view. The notes under the fields say when a part year was counted as whole, and The working shows each step.
Reading the result
If it goes wrong
Separation pay is owed when an employer ends employment for an authorised cause — redundancy, retrenchment, closure, the installation of labour-saving devices, or disease. It is not owed when you resign, and it is not owed when you are dismissed for a just cause.
The ground decides the rate, and not in the direction most people expect. Redundancy pays a full month for every year of service; retrenchment pays half. Both are authorised causes and both look the same from where the employee is standing, so a single "separation pay formula" is wrong for one of them whichever rate it picks.
Two rules then bend the arithmetic in the employee's favour. A fraction of six months or more counts as a whole year, so four years and seven months is paid as five. And there is a floor: one month pay or the per-year rate, whichever is higher, so a few months of service still produces a month.
Because retrenchment presupposes an employer already losing money, and the law asks less of a business in trouble. Redundancy and the installation of labour-saving devices pay one month per year of service; retrenchment, closure and disease pay half a month. The two look alike from the outside, which is why the ground is the first thing this page asks for.
Not under the Labor Code. Separation pay is owed when the employer ends the employment for an authorised cause, not when you leave voluntarily. Company policy or a collective agreement may still provide something, and unused leave is a separate entitlement.
No separation pay is due. Serious misconduct, wilful disobedience, gross neglect, fraud and the other just causes in article 297 carry none, which is why this page does not offer them as a ground — quoting a figure would be answering the wrong question.
Only if the losses are real. Closure due to serious business losses is the one authorised cause that carries no separation pay, but the exemption is narrow: the losses must be serious, actual and proven with audited financial statements, not merely asserted. A closure that is not proven to be loss-driven pays half a month per year.
A fraction of at least six months counts as one whole year. Four years and seven months is credited as five, which is worth a full year of pay — this is the single most common place a hand-worked figure comes out short.
You get one month. The law says one month pay or the per-year rate, whichever is higher, so a short tenure does not produce a fraction of a month. This page applies that floor and says when it is what produced the answer.
Separation pay for a cause beyond the employee’s control is generally exempt from income tax, but the treatment is a BIR matter with conditions attached and this tool does not model it. The figure here is gross. Ask the BIR or your accountant before assuming either way.
The seven months round the service up to five years. Truncating to four would lose ₱30,000 — a full year of the entitlement.
Important
This is an estimate of the statutory minimum, not legal advice. A collective agreement or company policy may provide more, and the tax treatment is not modelled. Nothing you type here is sent to our servers — the calculation runs entirely in your browser.
