When a fixed-term employment contract ends on its agreed expiry date, the employment relationship ceases by operation of the contract—not because you were “terminated.” Even so, you’re entitled to receive all earned pay and statutory benefits without undue delay. This article explains everything you need to know in the Philippine context: what you should receive, when you should get it, what can be deducted, and how to pursue claims if your employer doesn’t pay.

1) What counts as “final pay”?

Final pay (sometimes called back pay or last pay) is the total of all monetary amounts due to the employee upon separation, minus lawful deductions. Typical components:

Unpaid basic wages up to the last working day
Overtime pay, night shift differential, premium pay (rest day/special day/Sunday), and holiday pay, if any
Pro-rated 13th-month pay for the calendar year up to the date of separation
Conversion of unused Service Incentive Leave (SIL) to cash (at least 5 days per year for qualified employees), if unused
Unused leave credits convertible under company policy or collective bargaining agreement (CBA)
Commissions/allowances that are wage-integrated or contractually due and already earned (e.g., paid on billed/collected sales per policy)
Tax refund, if year-to-date withholding exceeds the final tax due
Separation benefits only if:
- provided by law for certain authorized causes (e.g., redundancy), or
- expressly promised in a contract, policy, or CBA, or
- required by special rules in your sector (rare)
Other earned benefits that have accrued and are payable under policy (e.g., longevity pay already vested)

Not usually included: separation pay for an ordinary contract expiration, future/contingent commissions not yet earned per policy, discretionary bonuses (unless already announced as due), and non-convertible leaves.

2) Timing: When should final pay be released?

Customary standard: within 30 calendar days from separation, unless a shorter period is set by company policy or CBA.
Employers commonly finish clearance, compute dues, and release through payroll or check. Clearance processes must be reasonable and should not be used to unduly delay payment.

Tip: Ask HR (in writing) for the target release date, computation sheet, and the breakdown of deductions.

3) Fixed-term expiration vs. separation pay

Expiration of a fixed term (including project completion for true project employees) generally does not entitle the employee to statutory separation pay.
Separation pay is typically due only for authorized causes (redundancy, retrenchment, closure not due to serious losses, etc.), or when contractually promised.

Philippine jurisprudence recognizes fixed-term employment when genuinely agreed and not used to circumvent security of tenure (the classic benchmark is Brent). Repeated renewals may, in some cases, imply regular status—facts matter.

4) Pro-rated 13th-month pay and taxes

You’re entitled to pro-rated 13th-month pay based on basic wages earned from January 1 up to your date of separation in the same calendar year.
Under current tax rules, the 13th-month pay and other benefits are tax-exempt up to ₱90,000 in a year; any excess is taxable.
Your employer must issue BIR Form 2316 (Certificate of Compensation/Taxes Withheld) covering your employment for the year by Jan 31 of the following year or upon request when you transfer employers.

5) Service Incentive Leave (SIL) cash conversion

If you’re a rank-and-file employee who has rendered at least one year of service and is not among the exempted categories, you earn at least 5 SIL days/year.
Unused SIL must be converted to cash upon separation using your daily rate at the time of separation (no premium).

6) Lawful deductions from final pay

Employers may deduct only amounts allowed by law or authorized in writing by the employee:

Statutory contributions and withholding taxes
Government-mandated loans (e.g., SSS salary loan) subject to valid authorization/arrangements
Company property/accountabilities documented through clearance (e.g., unreturned laptop, uniforms, tools)
Authorized cash advances and documented overpayments
Court-ordered deductions (e.g., garnishments)

What’s not allowed: open-ended “penalties,” forfeiture of earned wages, or “security deposits” that effectively shift normal business costs to employees, except where narrowly permitted by specific regulations.

7) Documents you should receive

Payslip or computation sheet of final pay with clear breakdown
Certificate of Employment (COE)—upon request, issued promptly (best practice: within 3 working days of request)
BIR Form 2316
Clearance/quitclaim forms (see next section)

8) Quitclaims and releases: sign or not?

Employers often request a Quitclaim/Release/Waiver when releasing final pay. These documents are not inherently void, but they must be:
- Voluntary, clear, and supported by reasonable consideration (i.e., you actually received what you’re legally due); and
- Not contrary to law, public policy, or obtained through fraud/duress.
If the computation is undisputed and complete, signing may be pragmatic.
If you disagree with the figures, you may:
- Ask to annotate “Received under protest” or attach a written reservation of rights; or
- Request release of the undisputed portion first.

9) Special employment set-ups

Project employees: End-of-project completion is a valid end of employment; separation pay is generally not due unless provided by policy/contract.
Seasonal employees: End of season is valid; treatment follows project-like rules.
Agency/contractor (legitimate contracting): Your direct employer is the contractor, which usually processes final pay. If the contractor fails to pay, the principal may be solidarily liable for wage claims related to the project.
Probationary employees: If the probationary contract has a fixed end date and simply expires, treat as fixed-term expiration; any earned benefits must still be paid.

10) How to compute (quick checklist)

Basic pay: Daily rate × actual days worked in the last payroll cut-off + unpaid back wages.
OT/Night/Premium/Holiday: Apply correct multipliers to hours actually worked.
SIL conversion: Unused SIL days × current basic daily rate.
13th-month: (Total basic wages earned Jan 1–separation date) ÷ 12.
Other convertible benefits: Add per policy/CBA.
Taxes/contributions: Apply withholding/taxes; compute tax refund if overwithheld.
Deductions: Subtract only lawful, documented deductions.
Net final pay: Sum of 1–5 minus 6–7.

Keep all payslips, schedules, timesheets, and policies. They’re vital if a dispute arises.

11) Practical claiming steps

Step 1: Offboarding

Return company property; complete clearance.
Request written computation and target release date.

Step 2: Follow-up in writing

Send a polite demand email/letter to HR/Payroll if delayed beyond a reasonable period (e.g., 30 days), asking for:
- Exact breakdown and basis for each line item
- Date and mode of release
- Copies of COE, 2316, and final payslip

Step 3: Escalate through SEnA

File a Single-Entry Approach (SEnA) request at the nearest DOLE Regional/Field Office for mandatory conciliation-mediation. It’s quick and low-cost.

Step 4: File a money claim (if unresolved)

Bring a money claims case for unpaid wages/benefits before the appropriate forum (commonly the NLRC through its Regional Arbitration Branch). Attach evidence (contract, payslips, time records, emails).

Prescriptive period: 3 years from the time each monetary claim accrued (usually your separation date for final pay components).

12) Frequently asked questions (FAQs)

Q: My employer says final pay is “on hold until BIR clearance.” A: Employers must withhold and remit taxes properly, but a separate “BIR clearance” is not a legal precondition to release earned wages. They should compute and release within the usual timeframe, then reconcile via year-end adjustments/BIR Form 2316.

Q: Can HR refuse to give my COE because I have unpaid accountabilities? A: A COE merely states facts of employment (position/tenure). It should be issued upon request within a prompt period; it’s not a leverage tool for collections.

Q: Our policy says “final pay after 60–90 days.” Is that allowed? A: Lengthy timelines that unreasonably delay payment can be challenged. Thirty (30) days has become the standard benchmark; shorter periods are better practice.

Q: I kept working past the contract end date. A: If you continued working with the employer’s consent, you may have effectively extended or renewed the contract. Pay must cover the actual work rendered; repeated renewals can, in some scenarios, support a claim to regular status (fact-specific).

Q: I’m a contractor’s employee assigned to a principal. Who do I chase? A: Start with the contractor (your employer). For unpaid wages/benefits tied to the assignment, you may also pursue the principal under solidary liability in legitimate contracting arrangements.

13) Simple demand letter template

Subject: Demand for Release of Final Pay and Employment Documents Dear [HR/Payroll Manager], I separated from the company on [date] due to contract expiration. To date, I have not received my final pay and employment documents. I respectfully request within five (5) working days:

The computation sheet (wages, 13th-month, SIL conversion, other benefits, deductions);

The release date and mode of payment;

My Certificate of Employment and BIR Form 2316. Kindly treat this as a formal demand. If unresolved, I will seek assistance through DOLE SEnA and other appropriate forums. Thank you. [Name] [Employee No./Position] [Mobile/Email]

14) Key takeaways

You’re owed everything you’ve already earned (wages, differentials, pro-rated 13th month, SIL, etc.) when a fixed-term contract expires.
Separation pay isn’t automatic for contract expiry—only if the law or your contract/policy provides it.
30 days is the widely observed maximum release window (shorter is better).
Keep disputes documented, use SEnA first, then file money claims within 3 years if still unpaid.

If you want, I can adapt this into a one-page checklist or compute a sample final pay based on your rates and last workday.