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Redundancy Separation Pay

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1 Redundancy Separation Pay on Fri Mar 17, 2017 3:12 am

Mc2012


Arresto Menor
Attys or HR folks:

If an employee is let go due to workforce reduction due to redundancy (very long time on-bench), I researched that the minimum separation pay is one month of last salary per year of service (where 6 months + 1 day is considered one year). How about SLs and VLs conversion? Is this on the prerogative of the employer? How about the 13th month pay--- is this in full or as a fraction of the current year (so if you get retrenched in June, will you get HALF 13th pay, or the FULL 13th month pay)?

Lastly, are these TAX EXEMPT?

Thanks for any clarifications.

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2 Re: Redundancy Separation Pay on Fri Mar 17, 2017 4:26 am

council

avatar
Reclusion Perpetua
The employee is entitled to all benefits accrued, including pro-rated 13th month pay, etc.

Separation pay is not taxable under certain conditions and requirements of the BIR. To claim the exemption, the employer will need a BIR ruling and approval.

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