Philippines Separation Pay 2026: How Much You're Owed by Cause
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In the Philippines, what you receive when your job ends depends heavily on the cause of separation.
Authorized-cause separation pay
- Redundancy or installation of labour-saving devices — one month's pay per year.
- Retrenchment, closure, or disease — half a month's pay per year.
There's a one-month minimum, and a part-year of six months or more counts as a full year.
Resignation
Voluntary resignation generally carries no separation pay unless your contract or a collective bargaining agreement provides it.
Retirement pay
Employees aged 60–65 with at least 5 years of service get 22.5 days' pay per year (the half-month-salary equivalent that bundles 15 days plus 13th-month and leave components).
Worked example
PHP 20,000/month, 8 years, retrenchment: ½ × 20,000 × 8 = PHP 80,000. Same tenure under redundancy: PHP 160,000.
Frequently asked questions
How is separation pay calculated in the Philippines?
For authorized-cause dismissals: one month's pay per year of service for redundancy or labour-saving devices, or half a month per year for retrenchment, closure or disease — with a one-month minimum. A part-year of six months or more counts as one year.
Do I get separation pay if I resign?
Generally no. Voluntary resignation does not entitle you to separation pay unless your contract or CBA provides it.
How is retirement pay calculated?
For employees aged 60–65 with at least five years of service, retirement pay is 22.5 days of pay per year of service (half-month salary equivalent).
What counts as a full year for separation pay?
A fraction of at least six months is counted as one whole year.