Philippine labor-law tool
Separation Pay Calculator
Estimate statutory separation pay based on the termination ground, monthly pay basis, and credited years of service. See the formula, assumptions, and documents to verify before relying on the result.
Enter the case details
Inclusion depends on the allowance’s nature and the governing rule. The tool shows it separately for review.
Your estimate
Complete the fields and select Calculate estimate. The result will show the applicable formula and any eligibility warning.
Rules used by this calculator
| Ground | Ordinary statutory formula |
|---|---|
| Redundancy or labor-saving devices | At least 1 month pay, or 1 month pay for every credited year of service, whichever is higher. |
| Retrenchment; closure not due to serious business losses | At least 1 month pay, or ½ month pay for every credited year of service, whichever is higher. |
| Disease under Article 299 | At least 1 month salary, or ½ month salary for every credited year of service, whichever is higher. |
| Closure due to proven serious business losses | No automatic statutory separation-pay estimate; a contract, CBA, policy, or practice may still provide a benefit. |
| Just cause, resignation, or ordinary contract/project completion | Generally no automatic statutory separation pay, subject to a more favorable agreement, policy, practice, or a special legal ruling. |
A fraction of at least six months is treated as one whole year for these formulas. The calculator compares the service-based amount against the one-month statutory floor.
What to check before accepting a computation
- Termination letter and the exact ground cited
- Employment contract, CBA, handbook, and written company policy
- Payslips and proof of regular allowances
- Start date, last day, and any breaks in service
- For authorized causes, the employee and DOLE notices and proof supporting the cause
- For disease, the required certification and legal conditions
Read the detailed guides
How to compute separation pay · Authorized-cause procedure · Redundancy · Retrenchment · Termination due to disease
Primary legal text: Labor Code of the Philippines (Lawphil).
Direct answer and formula
Separation pay depends on the authorized cause. The usual statutory formulas are one month pay or one month pay per credited year for redundancy or labor-saving devices, and one-half month pay per credited year for retrenchment, closure not due to serious losses, and qualifying disease termination—subject to the applicable one-month minimum.
| Ground | Ordinary statutory basis |
|---|---|
| Redundancy or labor-saving devices | 1 month pay × credited years |
| Retrenchment, covered closure or disease | ½ month pay × credited years, subject to the statutory floor |
A fraction of at least six months is ordinarily counted as one whole year. Company policy, CBA, contract, retirement plan or jurisprudence may provide a more favorable or different result.
Official legal basis
Review Labor Code Articles 298 and 299, the DOLE Handbook on Workers’ Statutory Monetary Benefits, and the detailed separation-pay guide. Verify the actual termination ground and pay base before relying on the estimate.
Separation pay calculator FAQs
Who is usually entitled to separation pay?
Employees terminated for specified authorized causes—such as redundancy, installation of labor-saving devices, retrenchment, qualifying closure, or disease—may be entitled if the legal requirements are met.
How is a year of service counted?
Completed years count in full. A remaining fraction of at least six months is generally treated as one whole year for the statutory separation-pay formulas.
Is the minimum always one month?
For the covered authorized-cause and disease formulas shown here, the law compares the service-based computation with at least one month pay or salary and uses the higher amount.
Does “one-half month pay” always mean exactly 15 days?
The phrase can involve legal questions about the components of “one month salary” or “one-half month pay.” This calculator uses 50% of the entered monthly basis as a transparent estimate; verify the employer’s computation and current controlling authority.
Are allowances included?
It depends on the allowance’s character, regularity, and the applicable authority. The tool lets you include or exclude a regular monthly allowance provisionally so you can compare the result.
Do resigned employees receive separation pay?
Voluntary resignation ordinarily does not create statutory separation pay. A contract, CBA, policy, or consistent company practice may grant a benefit.
Is separation pay due after dismissal for just cause?
Ordinarily, no statutory separation pay is due for a valid just-cause dismissal. A more favorable policy or an exceptional judicial ruling may affect a particular case.
What if the business closed because of serious losses?
If serious business losses are genuine and sufficiently proven, statutory separation pay may not be required for closure. The employer bears the burden of proving the claimed losses, and contractual benefits may remain.
Is retirement pay the same as separation pay?
No. Retirement pay follows separate rules and should not be calculated with this tool.
Can an employer pay more than the calculator result?
Yes. A CBA, contract, policy, established practice, or voluntary package can provide a higher benefit. The more favorable enforceable benefit may control.
Does payment make an otherwise illegal dismissal valid?
No. Paying separation pay does not by itself prove a valid ground or proper procedure. Illegal-dismissal remedies may include reinstatement, backwages, damages, or separation pay in lieu of reinstatement depending on the case.
Where can I question an unpaid or incorrect amount?
You may start with the employer’s HR/payroll records and consider SEnA or the proper DOLE/NLRC route. Use the filing decision tool for a preliminary route.
Featured photo: Vitaly Gariev / Unsplash.