Separation Pay Calculator 2026
For redundancy, separation pay is 1 month(s) of pay for every year of service, and never less than 1 month(s) of pay. With a ₱ 20,000 monthly pay and 5 years of service, it is ₱ 100,000.00. Choose the reason for separation below to apply the right rate.
Tables: 2026
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Result
Separation pay
₱ 100,000.00
Tables: 2026
| Pay per year of service (1 month(s)) | ₱ 20,000.00 |
|---|---|
| Computed for 5 year(s) | ₱ 100,000.00 |
| Minimum (1 month(s) of pay) | ₱ 20,000.00 |
| Separation pay | ₱ 100,000.00 |
Notes
- Use your latest salary rate; regular allowances may be included in it.
How this was computed
Separation pay = monthly pay × 1 × 5 credited year(s) of service, but never less than 1 month(s) of pay. A fraction of at least 6 months counts as one full year.
Estimate only. Not legal, tax, or financial advice.
Worked example
Redundancy, monthly pay ₱ 20,000, 5 years of service: ₱ 20,000.00 per year × 5 years = ₱ 100,000.00. This is above the minimum of ₱ 20,000.00, so the separation pay is ₱ 100,000.00.
How it works
The rate depends on the reason: closure (not due to serious losses) and redundancy pay a higher amount per year of service than retrenchment and illness; the calculator applies the rate from the DOLE table for the reason you choose. A fraction of at least 6 months counts as a full year, and the result is never less than 1 month(s) of pay.
Separation pay = monthly pay × 1 × 5 credited year(s) of service, but never less than 1 month(s) of pay. A fraction of at least 6 months counts as one full year.
Frequently asked questions
How much is separation pay per year of service?
It depends on the reason for separation. For redundancy it is 1 month(s) of pay per year; for retrenchment and illness it is lower. Choose the reason in the calculator to apply the right rate.
Is a fraction of a year counted for separation pay?
Yes. A fraction of at least 6 months counts as one whole year of service.
Do I get separation pay if I resign?
Not by law. Separation pay is due for authorized causes such as closure, redundancy, retrenchment or illness, unless your contract or company policy grants it on resignation.
Is separation pay taxable?
Separation pay received because of causes beyond the employee's control, such as redundancy or closure, is generally exempt from income tax. Check with the BIR or your employer for your case.