When should final pay be released in the Philippines?

Within 30 days from the date of separation, under DOLE Labor Advisory No. 06, Series of 2020. A company policy, contract or CBA can set a shorter period.

What is included in final pay?

Unpaid salary, proportionate 13th month pay, cash conversion of unused service incentive leave, separation or retirement pay if due, any tax refund, and other benefits under the contract, policy or CBA, less lawful deductions.

How many days does an employer have to issue a Certificate of Employment?

3 days from the employee's request, whatever the reason the employee left.

Can an employer withhold final pay until clearance is completed?

The Supreme Court has allowed employers to hold final pay until the employee settles accountabilities (Milan v. NLRC, 2015). The 30 day release period still applies, so clearance should be handled quickly.

Is a resigned employee entitled to separation pay?

Not by law. Separation pay is owed for authorized causes such as redundancy, retrenchment or closure. A resigning employee gets it only if the company policy, contract or CBA grants it.

Final Pay and Certificate of Employment Rules (Philippines)

Final pay must be released within 30 days from the date an employee leaves, unless your company policy or a CBA sets a shorter period. A Certificate of Employment must be issued within 3 days of the employee's request. Both rules come from DOLE Labor Advisory No. 06, Series of 2020, and apply however the employee left.

Final pay was the single most common complaint to the DOLE hotline in 2025. Most cases are not about the amount. They are about the wait.

What goes into final pay

Final pay, sometimes called last pay or back pay, is everything the company still owes the employee on separation:

unpaid salary up to the last day worked;
the proportionate 13th month pay for the year;
cash conversion of unused service incentive leave, and other leave if your policy makes it convertible;
separation pay, if the separation is for an authorized cause such as redundancy or retrenchment;
retirement pay, if the employee qualifies under RA 7641 or your retirement plan;
any tax refund from the year end adjustment;
other amounts due under the employment contract, company policy or CBA.

Lawful deductions, such as unpaid company loans the employee authorized, come off the total.

A worked example

An employee earning ₱30,000 a month resigns effective August 15, with the August 1 to 15 pay period still unpaid and 3 days of unused service incentive leave. The company uses a factor of 261 days.

Unpaid salary, August 1 to 15₱15,000.00

Proportionate 13th month (₱225,000 basic earned ÷ 12)₱18,750.00

Unused leave, 3 days at ₱1,379.31 (₱30,000 × 12 ÷ 261)₱4,137.93

Final pay before tax and deductions₱37,887.93

Clearance and the 30 day rule

Employers may require clearance before releasing final pay. The Supreme Court has allowed holding final pay until the employee settles company property and accountabilities (Milan v. NLRC, 2015). The 30 days still run, so keep the clearance process short and start it on the employee's last day, not after.

The Certificate of Employment

A Certificate of Employment states the dates the employee started and ended, and the kind of work they did. Issue it within 3 days of the request, whatever the reason the employee left. Do not hold it hostage to clearance. It is a separate obligation.

Often missed on separation

Give the employee BIR Form 2316 on the day you make the last payment of wages, so the next employer can do their year end tax computation.
If the employee is 60 or older with at least 5 years of service, check whether retirement pay under RA 7641 is due instead of, or on top of, other benefits.
Separation pay is not owed on a voluntary resignation unless your policy or contract grants it.
Employees can file a request for assistance with DOLE under the Single Entry Approach (SEnA) if pay is late.

Zalamea's payroll team computes final pay, prepares BIR Form 2316 and tracks clearance deadlines for client companies. Where retirement pay is due, our actuarial team can compute it. See our payroll and HR solutions or talk to our team.

Sources: DOLE Labor Advisory No. 06, Series of 2020, on the release of final pay and issuance of Certificates of Employment; Presidential Decree No. 851 on 13th month pay; Article 95 of the Labor Code on service incentive leave; Articles 298 and 299 of the Labor Code on separation pay; Republic Act No. 7641; BIR Revenue Regulations No. 2-98, as amended, on BIR Form 2316; Milan v. NLRC, G.R. No. 202961, February 4, 2015; DOLE Hotline 1349 complaint figures as reported by the Manila Bulletin, January 22, 2026.

Final Pay and Certificate of Employment: What Employers Must Release, and When