Your entries are calculated in this browser. No registration, email, or payment is required, and this tool does not intentionally store or transmit calculator inputs.
How the calculation works
The calculator adds the basic monthly salary and the regular monthly allowance entered to create the estimated monthly-pay base. It credits a fraction of at least six months as one whole year, applies the formula selected for the authorized cause, and applies the statutory one-month minimum.
Which formula applies?
For redundancy or installation of labor-saving devices, the estimate uses one month pay for every credited year of service. For retrenchment to prevent losses, closure or cessation not due to serious business losses, and disease under the statutory conditions, it uses the higher of one month pay or one-half month pay for every credited year.
Supreme Court jurisprudence recognizes regular allowances in the salary base in appropriate cases, but an allowance is not regular merely because it is paid monthly. Conditional, liquidated, or employer-convenience allowances may be excluded. Review the allowance’s nature, purpose, conditions, employment documents, company policy, and applicable rulings.
Important limitations
Closure due to duly proven serious business losses may have a different consequence. Voluntary resignation and dismissal for just cause generally do not create statutory separation-pay entitlement, although a contract, collective bargaining agreement, company policy, established practice, or settlement may provide otherwise. Separation pay awarded in lieu of reinstatement after illegal dismissal also requires a different factual and legal analysis.
Frequently asked questions
Does every monthly allowance count?+
No. Regularity, purpose, conditions, and the governing documents matter. Reimbursements and conditional allowances may not form part of the salary base.
How are partial years treated?+
A fraction of at least six months is credited as one whole year. A shorter fraction is not rounded up by this calculator.
Is separation pay the same as final pay?+
No. Final pay may separately include unpaid salary, prorated 13th-month pay, convertible leave credits, and other amounts due.
Does the result determine legal entitlement?+
No. Entitlement depends on the actual ground for termination, proof, compliance, and governing contracts, policies, or agreements.
Legal references
Labor Code Articles 298 and 299 (formerly Articles 283 and 284); Millares v. NLRC, G.R. No. 122827, March 29, 1999 →
Legal disclaimer
This calculator provides a general estimate only. It does not determine whether a termination is valid, whether separation pay is legally due, or which payments belong in the salary base. Laws and jurisprudence may change, and specific facts and documents can materially affect the result. Use does not create an attorney-client relationship. Consult qualified legal counsel for an actual case.