Separation pay in the Philippines: a month a year for redundancy, half for retrenchment
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 16 Oct 2026.An employee in the Philippines on ₱30,000 a month whose job is declared redundant after 7 years and 6 months gets at least ₱240,000 in separation pay. The 6 extra months count as a whole year, so 8 years at one month each. Retrenchment pays half a month per year, ₱120,000.
2026 · Rates and rules read from Labor Code of the Philippines, articles 298 and 299 (283 and 284 before renumbering), LawPhil on 16 Oct 2026; they may have changed since.
Type your latest monthly pay.
Enter your years of service and the extra months; six months or more count as a whole year.
Choose the cause of the termination.
Read the years counted, the rate per year and the separation pay, with the one-month minimum.
When an employer in the Philippines ends a job for an authorised cause, the Labor Code sets a minimum separation pay. This page applies articles 298 and 299, which were articles 283 and 284 before the code was renumbered.
Redundancy and labour-saving devices. One month of pay for every year of service, or one month of pay, whichever is higher.
Retrenchment and closure. Retrenchment to prevent losses, and a closure or cessation of business that is not due to serious losses, give half a month of pay for every year of service, or one month, whichever is higher. A closure due to serious business losses carries no separation pay.
Disease. An employee whose illness makes continued work unlawful or harmful gets one month of salary or half a month per year, whichever is greater (article 299).
How service is counted. A fraction of at least six months counts as a whole year, so 7 years and 6 months is 8 years, while 7 years and 5 months is 7. Whatever the length, the one-month minimum applies.
Not included. Dismissal for a just cause, which carries no separation pay; illegal dismissal, where backwages and separation pay instead of reinstatement are awarded; retirement pay; better terms in your contract or collective agreement; and the final pay items owed on top, such as the last salary, the pro-rated 13th month pay and unused service incentive leave. An estimate from the Labor Code, not legal advice.
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Multiply your monthly pay by the years of service and by the rate for the cause: one month per year for redundancy or labour-saving devices, half a month for retrenchment, closure not due to serious losses, or disease. Six months or more of a part year count as a year, and the result is never below one month of pay.
One month of pay for every year of service, or one month, whichever is higher (article 298). On ₱30,000 a month after 7 years and 6 months that is 8 years, ₱240,000.
Half a month of pay for every year of service, or one month, whichever is higher. The same rate applies when a business closes for reasons other than serious losses, and for termination because of disease.
Yes, for an authorised cause. The law sets a minimum of one month of pay whatever the length of service, and six months or more already count as a whole year.
Only if the closure is not due to serious business losses or financial reverses. Then it is half a month per year or one month, whichever is higher. A closure because of proven serious losses carries no separation pay under the Labor Code.
No. Serious misconduct, wilful disobedience, gross neglect, fraud and the other just causes of article 297 carry no separation pay under the Labor Code, though the final pay owed must still be paid.
Rates and rules change; check the source before you rely on a figure.
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