Quick answer
Final pay (often called back pay) is everything your employer still owes you when you leave: unpaid salary, pro-rated 13th month pay, cash conversion of unused service incentive leave (and other convertible leave under company policy), any tax refund, and separation or retirement pay if applicable, minus lawful deductions such as unpaid company loans. Under DOLE Labor Advisory 06-2020, it must be released within 30 days from separation.
Key takeaways
- Final pay must be released within 30 days from separation, unless a more favorable policy or agreement applies.
- Includes unpaid salary, pro-rated 13th month, convertible unused leave, tax refund, and separation or retirement pay when applicable.
- Separation pay is for authorized-cause terminations (e.g., redundancy, retrenchment, closure), not for voluntary resignation.
- Employers may deduct only lawful amounts, such as taxes, contributions and debts you authorized or agreed to.
- If it's late, file a Request for Assistance with DOLE through SEnA, which is free.
On this page
Whether you resigned, finished a contract, or were laid off, your employer still owes you money after your last day. Here's what should be included, how to check the amount, and what to do if it's late.
What's included in final pay
| Component | When it applies |
|---|---|
| Unpaid salary | Days worked since your last payday |
| Pro-rated 13th month pay | Always, for rank-and-file employees |
| Unused service incentive leave (SIL) | Cash conversion of unused SIL (5 days a year by law for those with at least 1 year of service, if not covered by an equivalent leave policy) |
| Other convertible leave | Unused vacation leave, if company policy or contract makes it convertible |
| Tax refund | If too much tax was withheld during the year |
| Separation pay | Only for authorized-cause terminations, or if your contract or policy grants it |
| Retirement pay | If you're retiring under RA 7641 or a company plan |
| Other benefits | Pending commissions, allowances or incentives due under policy or contract |
Possible deductions: withholding tax, employee contributions on your final salary, outstanding company loans and cash advances, and other amounts you authorized in writing.
The 30-day rule
DOLE Labor Advisory No. 06, Series of 2020, sets the standard:
- Final pay: released within 30 days from the date of separation or termination.
- Certificate of Employment: issued within 3 days from your request.
A more favorable company policy, contract or collective bargaining agreement prevails.
Worked example: resignation
Ana earns ₱30,000 a month and resigned effective August 15. Her last regular payday covered up to July 31. She has 5 unused SIL days, a ₱5,000 company loan balance, and received no 13th month advance this year.
| Item | Computation | Amount |
|---|---|---|
| Unpaid salary (Aug 1–15) | Half-month salary | ₱15,000.00 |
| Less: SSS, PhilHealth, Pag-IBIG for August | ₱1,500 + ₱750 + ₱200 | (₱2,450.00) |
| Pro-rated 13th month pay | (₱30,000 × 7.5 months) ÷ 12 | ₱18,750.00 |
| Unused SIL (5 days) | 5 × daily rate of ₱1,379.31* | ₱6,896.55 |
| Less: company loan balance | (₱5,000.00) | |
| Final pay before tax adjustment | ₱33,196.55 |
*Daily rate = ₱30,000 × 12 ÷ 261 working days (a common factor for 5-day workweeks; your company's factor may differ).
Her employer will also annualize her tax for January to August 15. Depending on what was withheld, she may get a refund or have a small additional deduction. The pro-rated 13th month is tax-exempt because her total bonuses are under ₱90,000. She should also receive BIR Form 2316 to give her next employer.
Separation pay: when you're entitled
Separation pay is required by the Labor Code for authorized causes, not for voluntary resignation:
| Cause | Minimum separation pay |
|---|---|
| Installation of labor-saving devices, redundancy | 1 month's pay per year of service, or 1 month's pay, whichever is higher |
| Retrenchment to prevent losses, closure not due to serious losses | ½ month's pay per year of service, or 1 month's pay, whichever is higher |
| Disease (when continued employment is prohibited by law or harmful) | ½ month's pay per year of service, or 1 month's pay, whichever is higher |
A fraction of at least six months counts as one whole year.
Example: monthly pay ₱30,000, 4 years and 7 months of service (counted as 5 years). - Redundancy: ₱30,000 × 5 = ₱150,000 - Retrenchment: ₱15,000 × 5 = ₱75,000
Employees dismissed for just causes (such as serious misconduct) generally aren't entitled to separation pay.
Retirement pay (RA 7641)
If you retire at 60 to 65 with at least 5 years of service and there's no better company retirement plan, the minimum retirement pay is one-half month's salary for every year of service, where "one-half month" is defined as 22.5 days' pay (15 days' salary + 5 days of SIL + 1/12 of the 13th month pay).
How to check your final pay
- Ask HR for a written breakdown.
- Check unpaid days against your attendance and last payslip.
- Recompute your 13th month pay.
- Confirm unused leave balances.
- Verify every deduction and ask for documentation.
What to do if it's late or incomplete
- Follow up in writing, citing Labor Advisory 06-2020 and the 30-day period.
- File a Request for Assistance through SEnA (Single Entry Approach) at the nearest DOLE field office or online. It's free and aims to settle the issue within 30 days.
- If conciliation fails, the case may proceed to the appropriate labor office or the NLRC.
Keep copies of your resignation letter, clearance, payslips and all communication.
Plan for the gap
Final pay can take up to a month to arrive, and your new job's first salary may come weeks later. Keep enough in your emergency fund to cover at least one or two months of expenses during the transition. For the resignation process itself, see how to resign properly.
Frequently asked questions
How long does it take to get final pay in the Philippines?
Within 30 days from the date of separation or termination, according to DOLE Labor Advisory No. 06-2020, unless your company policy, contract or CBA gives a shorter period.
Is 13th month pay included in final pay?
Yes. You're entitled to a pro-rated 13th month pay: total basic salary earned from January to your last day, divided by 12, minus any 13th month already advanced that year.
Can my employer deduct unreturned equipment from my final pay?
Deductions are limited by the Labor Code to those authorized by law or by you in writing, or for debts you owe the employer. Agree on any deduction in writing during clearance; return company property to avoid disputes.
How much is separation pay for redundancy?
At least one month's pay for every year of service, with a fraction of at least six months counted as one whole year. For retrenchment, closure not due to serious losses, or disease, it's one month's pay or half a month's pay per year of service, whichever is higher.
Is final pay taxable?
Unpaid salary and leave conversions beyond tax-exempt limits are taxable compensation, and your employer will compute your annual tax and may refund or deduct the difference. Pro-rated 13th month is exempt up to ₱90,000 combined with other bonuses. Separation pay due to causes beyond your control, such as redundancy, is generally tax-exempt.
Sources
Figures checked against these official and primary sources on October 4, 2026. Government rates and promos change, so confirm on the agency's site before you act.
- HG Law: Final pay and COE release periods under DOLE Labor Advisory 06-2020
- Labor Code of the Philippines (Articles 298–302 on termination and retirement)
- Republic Act No. 7641, Retirement Pay Law
- Presidential Decree No. 851, 13th Month Pay Law
General information, not personal financial, tax or legal advice. See our editorial standards and disclaimer. Found an outdated figure? Email support@success.ph.