Retirement pay: at least half a month per year of service

R.A. 7641 amended the Labor Code. If the establishment has no retirement plan or agreement, an employee aged 60 or more, up to 65, with at least 5 years of service may retire and gets at least one-half month salary for every year of service. A fraction of at least 6 months counts as one whole year.

Unless you agreed on more, one-half month salary means 15 days, plus 1/12 of the 13th month pay, plus the cash equivalent of not more than 5 days of service incentive leave.

Example

Illustrative example only. Daily rate ₱600, service of 20 years and 7 months, so 21 years count. 15 days = ₱9,000. 13th month pay ₱15,600, so 1/12 = ₱1,300. 5 days of leave = ₱3,000. One year = ₱13,300. Times 21 = ₱279,300.

⚠️ Tandaan

Retail, service and agricultural establishments with not more than 10 employees are exempted. If there is a CBA or plan, its benefits can't be less than this minimum.

Bago mag-retire

• ☐ Ask HR kung may retirement plan o CBA
• ☐ Get your date hired in writing
• ☐ Count your years: 6 months up = 1 year
• ☐ List your pay and unused leave

COE request letter, handa na: proof ng years of service mo 👇

Basis: R.A. 7641, amending Art. 287 of the Labor Code.