Philippines Gratuity Calculator

Calculate your end-of-service gratuity for Philippines. Free, accurate calculator based on Philippines labor laws.

Calculate Your Gratuity

Basic salary only (excluding allowances)

About Philippines Gratuity

Philippines gratuity calculation is based on local labor laws and regulations.

Calculation Formula

1 month/year (redundancy) or ½ month/year (retrenchment)

0

Philippines separation pay under Labor Code Articles 298-299. Applies to authorized termination causes only.

What is Separation Pay in Philippines?

The Philippines does not have mandatory gratuity as in Gulf countries, but has separation pay requirements under the Labor Code (Articles 298-299, formerly 283-284) for authorized termination causes.

Separation pay is required when employees are terminated due to redundancy, retrenchment, installation of labor-saving devices, business closure (not due to serious losses), or disease that prevents employment.

The formula differs by termination reason: one month salary per year for redundancy/closure, or half month per year for retrenchment/disease. Service of 6+ months in a year counts as a full year.

Final pay (unpaid wages, 13th month, unused SIL) is always due regardless of termination reason. Use our Philippines separation pay calculator to estimate your entitlement.

Philippines Separation Pay Formula

Formula

1 month salary per year (redundancy/closure) or ½ month per year (retrenchment/disease)

  • Redundancy / Labor-saving devices / Business closure: 1 month salary × years of service (minimum 1 month)
  • Retrenchment / Disease: ½ month salary × years of service (minimum 1 month)
  • Service ≥6 months in a year rounds up to full year
  • Applies only to authorized termination causes—not resignation or dismissal for just cause
  • Use our Philippines separation pay calculator: enter salary, years of service, and termination reason for an instant result.

Minimum service: 0 year

Gratuity Calculation Examples

Example: Philippines Separation Pay – Redundancy (5 Years)

Basic Salary: PHP 30,000/month

Years of Service: 5 years

Calculation:

Redundancy formula: 1 month × 5 years = 5 months. Separation pay = 30,000 × 5 = PHP 150,000

Example: Philippines Separation Pay – Retrenchment (3 Years)

Basic Salary: PHP 25,000/month

Years of Service: 3 years

Calculation:

Retrenchment formula: ½ month × 3 years = 1.5 months. Separation pay = 25,000 × 1.5 = PHP 37,500

Example: Philippines – 3 Years 7 Months (Rounds to 4 Years)

Basic Salary: PHP 20,000/month

Years of Service: 4 years

Calculation:

Service ≥6 months rounds up. 3y 7mo = 4 years. Redundancy: 20,000 × 4 = PHP 80,000. Retrenchment: 20,000 × 0.5 × 4 = PHP 40,000

Tips & Best Practices

📋 Know Your Termination Reason

Separation pay amount depends on why you were terminated. Redundancy/closure gets 1 month per year; retrenchment/disease gets ½ month per year.

💰 Final Pay vs Separation Pay

Final pay (unpaid wages, 13th month, unused leave) is always due. Separation pay is additional and only for authorized causes.

Frequently Asked Questions

Separation pay is required under Labor Code Art. 298-299 when terminated for authorized causes: redundancy, retrenchment, installation of labor-saving devices, business closure (not due to serious losses), or disease. It is NOT required for resignation, retirement, or dismissal for just cause.
For redundancy, labor-saving devices, or business closure: 1 month salary per year of service (or 1 month minimum). For retrenchment or disease: ½ month salary per year (or 1 month minimum). Service of 6+ months rounds up to a full year. Use our Philippines separation pay calculator for an estimate.
Final pay includes unpaid wages, pro-rated 13th month, and cash equivalent of unused Service Incentive Leave—due to all separated employees. Separation pay is additional compensation for employees terminated due to authorized causes (redundancy, retrenchment, etc.) and is calculated per Labor Code formulas.