This Philippines retirement / end-of-service calculator estimates the statutory retirement pay an employee is entitled to under Republic Act 7641. Enter your monthly basic salary and years of service to see the legally-mandated minimum benefit.
How it works
The law sets a minimum of 22.5 days of salary per year of service. That 22.5-day figure is built from three parts:
- 15 days of basic salary
- 5 days of service incentive leave (SIL)
- 2.5 days representing one-twelfth of the 13th-month pay
The daily rate is your monthly salary divided by the standard factor of about 26.08 (313 paid working days a year ÷ 12). The total benefit is:
Retirement pay = daily rate × 22.5 × years of service
A fraction of at least six months counts as one whole year. The minimum applies only when an employee reaches retirement age (optional at 60, compulsory at 65) and has at least 5 years of service.
Example
A worker earning PHP 20,000 a month retires after 10 years. Daily rate = 20,000 ÷ 26.08 ≈ PHP 766.87. Retirement pay = 766.87 × 22.5 × 10 ≈ PHP 172,545.
Notes
This is the statutory minimum. A company retirement plan or collective bargaining agreement may grant more, in which case the more favourable terms apply. The benefit is tax-exempt if the employee is at least 50 years old, has served at least 10 years, and avails of the exemption only once. Always confirm with HR and your retirement plan documents.