How is Retirement Pay Calculated in the Philippines?

Discover how retirement pay is computed in the Philippines based on years of service and salary components.

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Retirement pay in the Philippines is calculated based on 22.5 days’ worth of salary for every year of service. This includes 15 days of salary, 5 days of service incentive leave, and 2.5 days representing one-twelfth of the 13th-month pay. Eligibility starts after 5 years of continuous service. Employers are required to pay this upon an employee’s retirement.

FAQs & Answers

  1. How is retirement pay calculated in the Philippines? Retirement pay in the Philippines is calculated as 22.5 days’ worth of salary for every year of service, which includes 15 days of salary, 5 days of service incentive leave, and 2.5 days accounting for one-twelfth of the 13th-month pay.
  2. What is the eligibility criteria for retirement pay in the Philippines? Employees become eligible for retirement pay after 5 years of continuous service with the same employer.
  3. Who is responsible for paying retirement benefits in the Philippines? Employers are required to pay retirement benefits to eligible employees upon their retirement in accordance with Philippine labor laws.
  4. What components are included in the retirement pay calculation? The retirement pay calculation includes base salary for 15 days, 5 days of service incentive leave, and an additional 2.5 days which represents one-twelfth of the 13th-month pay.

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