Philippines Retirement Pay Calculator for Employees (RA 7641)
The legal minimum: 22.5 days of pay for every year of service, and who qualifies.
Philippines · RA 7641 Labor Code Article 302 (formerly 287) · 22.5 days a year · Sources
How the days add up
| Part | A year | In all |
|---|
Retirement ages and service
| Worker | Optional | Compulsory |
|---|---|---|
| Most private-sector employees | 60 | 65 |
| Underground or surface mine worker | 50 | 60 |
| Professional racehorse jockey licensed by PHILRACOM | — | 55 |
The ages from which you may retire (optional) and at which you must (compulsory); each needs at least 5 years of service. Article 302 for most employees; RA 8558 and RA 10757 for mine workers; Article 302-A (RA 10789) for licensed jockeys. A plan or agreement can set its own age, but not smaller benefits.
What else you are paid when you retire
- The pro-rated 13th month pay for the calendar year.
- The cash equivalent of accrued leave benefits.
- Any unpaid salary up to the last day, a refund of income tax withheld in excess, and cash bonds or deposits due back to you.
- Your SSS retirement pension or lump sum, which is separate from this retirement pay, and your Pag-IBIG total accumulated value.
The final pay is released within 30 days of the separation unless a company policy or agreement is more favourable, and a certificate of employment is issued within three days of a request (DOLE Labor Advisory No. 06).
How this was calculated
Rules and official sources
- Labor Code of the Philippines (Presidential Decree No. 442), as amended
- Republic Act No. 7641: retirement pay in the absence of a retirement plan (Labor Code Article 302)
- Republic Act No. 8558: retirement age of underground mine workers
- Republic Act No. 10757: retirement age of surface mine workers
- Republic Act No. 10789: Racehorse Jockey Retirement Act (Labor Code Article 302-A)
- DOLE: Handbook on Workers' Statutory Monetary Benefits (separation pay, retirement pay, equivalent monthly rate)
- Tax Code (Republic Act No. 8424), Section 32(B)(6): retirement benefits and separation pay excluded from gross income
- DOLE Labor Advisory No. 06: guidelines on the payment of final pay and the certificate of employment
- DOLE Bureau of Working Conditions
An estimate for information, not legal advice. A retirement plan or collective bargaining agreement can give more, never less.
For general information only, not legal advice. Templates are generic starting points — have a qualified lawyer review anything you rely on.
About the Philippines Retirement Pay Calculator for Employees (RA 7641)
Under Republic Act No. 7641 — Article 302 of the Labor Code, formerly Article 287 — a private-sector employee who retires between 60 and 65 (65 is the compulsory retirement age) after at least 5 years with the employer is entitled to retirement pay of at least half a month salary for every year of service, when there is no retirement plan or the plan gives less. "Half a month salary" means 15 days plus one twelfth of the 13th month pay plus the cash equivalent of up to 5 days of service incentive leave — 22.5 days — so the minimum is your daily rate × 22.5 × your years of service, a fraction of six months or more counting as a year.
Enter your age, your service and your pay — a daily rate, a monthly salary, or your earnings for the last year if you are paid by results. The calculator checks whether you qualify, including the lower ages for mine workers and racehorse jockeys and the exemption for small retail, service and agricultural employers; works out the minimum and its three parts; compares a company plan and checks whether that plan's benefit would be tax-free; and lists what else is paid when you retire. Everything stays in your browser.
How to use it
- Choose who you are: most private-sector employees, an underground or surface mine worker, or a licensed racehorse jockey.
- Enter your age on the retirement date, and your service as years and months or as the exact dates.
- Enter your pay: your daily rate; or your monthly basic salary and the days a year it pays for (365 if you are paid for every day of the month); or, if you are paid by results, your earnings for the last 12 months and the days you actually worked. Leave out COLA.
- Say what kind of employer you have — a government office, or a retail, service or agricultural business with 10 or fewer workers, is outside the law — and optionally enter what a company plan gives.
- Read whether you qualify, the minimum retirement pay and how the 22.5 days add up. Copy the summary or download it as a text file.
Examples
Age 60 · 20 years · ₱700 a day
₱700 × 22.5 days = ₱15,750 for each year of service × 20 years = ₱315,000 (15 days a year alone would be ₱210,000)
Age 62 · 25 years · ₱30,000 a month · paid for every day (365)
Daily rate ₱30,000 × 12 ÷ 365 = ₱986.30 ₱986.30 × 22.5 × 25 = ₱554,793.75
Age 65 · 12 years 6 months · ₱700 a day
Counts as 13 years: ₱700 × 22.5 × 13 = ₱204,750
₱180,000 earned in the last 12 months over 300 working days · 10 years
Average daily salary ₱600 · ₱600 × 22.5 × 10 = ₱135,000
Underground mine worker · age 52 · 8 years · ₱800 a day
Eligible from 50 · ₱800 × 22.5 × 8 = ₱144,000
Age 60 · 20 years · ₱700 a day · plan gives ₱250,000
Minimum ₱315,000, so the employer pays the ₱65,000 difference
Age 62 · 4 years 8 months
Not eligible under Article 302: it needs at least 5 years of service
Common uses
- Check what your employer must pay you when you retire without a company retirement plan.
- Compare a company plan’s benefit with the legal minimum before you sign off on it.
- Plan the retirement-pay liability for long-serving staff of a small or growing business.
- See whether working a few more months would add a year under the six-month rule.
Who qualifies
- Most private-sector employees: from age 60 (optional retirement) to 65 (compulsory retirement), with at least 5 years in the establishment (RA 7641).
- Underground and surface mine workers: from 50 to 60, with at least 5 years as a mine worker. Surface mine workers are mill plant workers and electrical, mechanical and tailings pond personnel (RA 8558, RA 10757).
- Racehorse jockeys licensed by the Philippine Racing Commission: compulsorily retired at 55 with the same retirement benefits, paying additional SSS premiums (RA 10789).
- Part-time workers are entitled too, in proportion to the salary and related benefits due them, once the same conditions are met (DOLE handbook).
- Not covered: government employees, and retail, service and agricultural establishments or operations regularly employing not more than 10 employees or workers.
A collective bargaining agreement or employment contract may set its own retirement age, but the benefits it gives may not be less than the law's.
The 22.5 days
Unless the parties provide for broader inclusions, "one-half month salary" is 15 days plus one twelfth of the 13th month pay plus the cash equivalent of not more than 5 days of service incentive leave (Labor Code). DOLE counts it as 22.5 days — 15 days of salary at the latest rate, 2.5 days for the 13th month pay (one twelfth of a 30.41-day month, which DOLE counts as 2.5) and 5 days of leave, following the Supreme Court in Capitol Wireless v. Confesor — and leaves COLA out: minimum retirement pay = daily rate × 22.5 days × years of service (DOLE handbook). Paying only 15 days a year leaves out a third of what the law requires. Other benefits may be included if the employer and employee agree or a collective bargaining agreement says so.
Your daily rate
For a monthly-paid employee — paid for every day of the month, rest days and holidays included — the daily rate is the monthly salary × 12 ÷ 365, the factor DOLE uses for monthly-paid employees. A daily-paid employee uses the daily rate itself; to turn a monthly figure into one, the calculator also offers DOLE's 313 days (six working days a week) and 261 days (five). DOLE calls these factors guides, so you can enter your own number of days. For workers paid by results without a fixed monthly salary rate, DOLE uses the average daily salary: the earnings of the last 12 months, reckoned from the retirement date, divided by the days actually worked in that period.
A retirement plan that gives less
A plan or agreement must give at least what Article 302 gives; if it gives less, the employer pays the difference. Where employer and employee both contribute to a retirement fund, the employer's contributions with their accrued interest may not be less than the retirement benefit the law would have required, and the employer pays any deficiency (DOLE handbook). Enter the plan's benefit and the calculator compares it.
Tax, the SSS pension and the rest of your final pay
Retirement benefits under RA 7641 are excluded from gross income, so they are not taxed. A benefit from a reasonable private benefit plan is excluded too, but only if you have been in the service of the same employer for at least 10 years, are at least 50 at retirement, and claim the exclusion only once (Tax Code, Section 32(B)(6)(a)) — enter the plan's amount and the calculator checks the first two against your figures.
The retirement pay is separate from the SSS retirement pension. On retiring you are also entitled to the pro-rated 13th month pay for the calendar year and the cash equivalent of accrued leave benefits, and the final pay is released within 30 days, with a certificate of employment within three days of a request (DOLE Labor Advisory No. 06).
Other countries
For India, the Gratuity Calculator (India) works out the gratuity under the Code on Social Security; for the Gulf states, the Gulf End-of-Service Gratuity Calculator applies each country’s labour law. The Philippines Separation Pay Calculator covers a job that ends before retirement.
Limitations
- The legal minimum only. A retirement plan, collective bargaining agreement or contract can give more, and the larger amount then applies.
- The calculator treats the five years as five completed years and applies the six-month rule to the pay only, as Article 302 is worded. Ask DOLE about a case right on the line.
- Service is taken as you enter it. Whether breaks, project or seasonal work count can be a legal question.
- Part-time work is not pro-rated for you: enter the daily rate or earnings you actually receive, and the result follows them.
- Government employees retire under the GSIS and other government rules, which this calculator does not work out.
- An estimate for information, not legal advice.
Privacy
Everything happens in your browser. What you enter or open here is not uploaded or stored by MySmartCoPilot.
Frequently asked questions
How do I compute my retirement pay under RA 7641?
Multiply your latest daily rate by 22.5 days and by your years of service, counting a fraction of six months or more as a whole year. On ₱700 a day after 20 years that is ₱700 × 22.5 × 20 = ₱315,000. For a monthly salary, the daily rate of a monthly-paid employee is the salary × 12 ÷ 365.
Why is it 22.5 days and not 15?
Article 302 defines "one-half month salary" as 15 days plus one twelfth of the 13th month pay (2.5 days) plus up to 5 days of service incentive leave. DOLE adds them up to 22.5 days for each year of service, following the Supreme Court in Capitol Wireless v. Confesor.
Can I retire before 60?
Not with retirement pay under Article 302, unless you are an underground or surface mine worker (from 50) or a licensed racehorse jockey (compulsorily at 55). A company retirement plan or collective bargaining agreement can allow an earlier retirement on its own terms.
Is retirement pay taxable in the Philippines?
Retirement pay under RA 7641 is excluded from gross income under Section 32(B)(6)(a) of the Tax Code, so no income tax is due on it. A benefit from a reasonable private retirement plan is excluded as well, but only if you have served the same employer for at least 10 years, are at least 50 and use the exclusion only once.
Is COLA included in retirement pay?
No. DOLE’s handbook says the cost of living allowance is not included in the computation of retirement pay; use your basic daily rate or basic monthly salary.
What if my company plan gives less than the law?
The employer must pay the difference: benefits under a plan or agreement may not be less than those of Article 302. Enter the plan’s amount and the calculator shows the difference.
Do I still get my SSS pension?
Yes. The retirement benefits under RA 7641 and RA 8558 are separate and distinct from those granted by the Social Security System, so your SSS retirement pension or lump sum is paid on top of this retirement pay.
Is what I enter sent anywhere?
No. Everything is worked out in your browser; nothing you type is uploaded or stored on a server, and the page works offline once it has loaded.