How the pay is estimated
- Redundancy / labor-saving device — one (1) month pay per year of service.
- Retrenchment / closure / disease — one-half (½) month pay per year of service.
- Retirement (RA 7641, no company plan) — 22.5 days (about three-quarters of a month) per year of service.
A fraction of at least six months counts as one whole year, and separation pay (for the causes above) is at least one month's pay. Amounts for causes beyond the employee's control, and qualified retirement pay, are generally tax-exempt.
Frequently asked questions
What if my employer has its own retirement plan?
RA 7641 sets the legal minimum used here. If your company plan or collective bargaining agreement is more generous, its terms apply instead — check your own plan.
Is separation or retirement pay taxable?
Separation pay for causes beyond the employee's control, and qualifying retirement pay, are generally tax-exempt. Confirm your specific case with the BIR.
How are partial years of service counted?
Six months or more is rounded up to a full year; less than six months is dropped. This follows the usual rule for computing the benefit.
Is my information uploaded?
No. The calculation runs entirely in your browser. Nothing you enter is stored or sent to a server.