Retirement Pay in the Philippines: Who Qualifies and How Much

The rule is in Article 302 [287] of the Labor Code ([287] is its number before the 2015 renumbering). Its current wording comes from Republic Act No. 10757 (2016), which rewrote the whole article. The core rule reads:

So this minimum applies when the company has no retirement plan or agreement. If there is a plan, a collective bargaining agreement (CBA) or another agreement, the employee gets what it provides, but the article says those benefits "shall not be less than those provided herein".

The term is also explained in retirement pay.

In De La Salle Araneta University v. Bernardo (2017), the Supreme Court listed three conditions for retirement pay under the article:

1. the employee has reached 60 (optional retirement) or 65 (compulsory retirement);
2. the employee has served at least five years in the establishment; and
3. there is no retirement plan or other agreement giving retirement benefits to employees in the establishment.

In that case, a part-time college lecturer qualified. The Court relied on the implementing rules, which cover all private sector employees "regardless of their position, designation or status".

At least one-half month salary for every year of service. A fraction of at least six months counts as one whole year.

The article then defines one-half month salary:

So "one-half month" is more than 15 days of pay. It adds 1/12 of the 13th month pay and up to five days of service incentive leave. If the 13th month pay equals one month of salary, 1/12 of it is about 2.5 days of pay, and the three parts add up to about 22.5 days of pay for each year of service. This is our reading of the text, not a figure written in the law. For how the 13th month pay is computed, see the 13th month pay guide.

For retirement pay and separation pay side by side, see separation pay vs retirement pay.

Yes. Republic Act No. 10757 lets underground and surface mine workers retire earlier:

The law says surface mine workers "shall only include mill plant workers, electrical, mechanical and tailings pond personnel".

The article says: "Retail, service and agricultural establishments or operations employing not more than ten (10) employees or workers are exempted from the coverage of this provision."

No. They are two different benefits:

• Retirement pay under Article 302 is paid by the employer.
• The SSS retirement pension is paid by the Social Security System from the contributions you paid.

The last paragraph of Article 302 says nothing in it deprives an employee of benefits under the Social Security Act and other laws or company policies. For the SSS side, see the SSS pension guide and the SSS pension calculator.

Retirement pay is a money claim, so the three-year period of [Article 306 [291]](/law/labor-code/article-306) applies. In De La Salle Araneta University (2017), the Court said the lecturer's cause of action for retirement benefits arose only when the university refused to pay them, so the three years ran from that refusal. See How long do you have to file a labor money claim?

These are made-up examples to show how the rules work. They are not advice for any real case.

Jun is 62 and has worked seven years at a hardware store in Cebu with 25 workers. The store has no retirement plan. He may retire and receive at least one-half month salary for each of his seven years.

Rey is 51 and has worked six years as a mill plant worker in a surface mine. Under the rule added by Republic Act No. 10757, he may retire from 50.

Liza is 63 and has worked eight years at a small bakery with six workers. The bakery is a retail and service business with not more than ten workers, so the article exempts it.

Talk to a lawyer if your employer refuses to pay retirement pay, if it says a company plan replaces the law but the plan pays less, or if you are not sure whether your workplace is exempt. If you cannot afford a lawyer, see Free legal help in the Philippines. Complaints usually start with conciliation at DOLE: see How to file a labor complaint.