Claiming Final Pay from an Employment Agency in the Philippines

A practical legal guide (Philippine context, 2025)

This article explains what “final pay” is, what it must include, when it should be released, who is liable if you were hired through an employment/manpower agency, and exactly how to enforce your rights—step by step. It’s written for Philippine law and practice. It isn’t legal advice for a specific case.

1) What “final pay” (a.k.a. last pay) means

Your final pay is the total amount your employer must pay you when your employment ends—whether by resignation, end-of-contract, termination for just/authorized cause, retirement, or project completion. It’s separate from government benefits (SSS, PhilHealth, Pag-IBIG) and from any damages or awards in a labor case.

Who is your “employer” if you worked via an agency?

If you were deployed by a manpower/contracting agency to a client company (the “principal”), the agency is your employer of record.
By law, the principal and the agency are jointly and solidarily liable for statutory monetary benefits (e.g., unpaid wages, 13th month pay, SIL), for work you performed for the principal. This means you can claim against either or both if the agency fails to pay.
If the arrangement is labor-only contracting (prohibited), the principal is deemed the employer, and you can claim directly against the principal.

Tip: Your employment contract, pay slips, and deployment papers help show the employment relationship and who can be held liable.

2) What must be included in final pay

The exact items depend on how and why employment ended, your company policy/CBA, and your contract. Typically, final pay includes:

Always consider (as applicable):

Unpaid basic wages up to your last day (including any wage differentials).
Overtime pay, premium pay (rest day/special/regular holiday work), and night shift differential, if any.
Pro-rated 13th-month pay (under P.D. 851):
- You’re entitled if you worked at least one (1) month in the calendar year.
- Pro-rate = (total basic wages earned in the year ÷ 12).
Cash conversion of unused Service Incentive Leave (SIL) at separation (Labor Code minimum is 5 days/year for eligible workers; many employers grant more by policy/CBA).
Unused leave credits convertible to cash under company policy/CBA (e.g., VL/SL beyond the statutory 5 SIL days).
Separation pay, if applicable (authorized causes only):
- Retrenchment or closure not due to serious losses: at least ½ month pay per year of service, or one (1) month pay whichever is higher.
- Redundancy or installation of labor-saving devices: at least 1 month pay per year of service, or one (1) month pay whichever is higher.
- Disease (not curable within 6 months and employee unfit for work): at least ½ month pay per year, or one (1) month pay whichever is higher.
- Fraction of ≥6 months counts as one full year.
- No separation pay for termination for just causes (e.g., serious misconduct), unless granted by policy/CBA or as equitable financial assistance by courts (not an entitlement).
Retirement pay (if you qualify under R.A. 7641 or company plan/CBA):
- Statutory minimum = ½ month pay for every year of service (≥6-month fraction = one year).
- “½ month pay” under the law = 15 days + 1/12 of 13th-month + cash value of 5 days SIL (≈ 22.5 days per year), unless a more beneficial company plan applies.
Tax refund (over-withholding for the year), if any.
Other accrued benefits/allowances that your policy/CBA treats as payable at separation (uniform allowance, rice/transport allowance, incentives, etc., if not strictly “facilities”).
Commissions or incentives already earned under your plan rules.

Deductions allowed from final pay (must be lawful and reasonable):

Statutory (withholding tax; SSS/PhilHealth/Pag-IBIG employee share that should have been withheld).
Authorized in writing by you (e.g., salary loans/vale).
Losses or damages you caused only if: (a) clearly your fault; (b) you were given due process (notice and chance to explain); and (c) the amount is reasonable and properly supported (no blanket forfeitures).
Unreturned company property may justify deductions equal to the item’s value if due process is observed and this is allowed by policy/contract; otherwise the employer should pursue recovery separately and still release lawful wages/benefits.

Employers commonly require clearance and return of property. They may condition release on clearance but cannot use clearance to indefinitely delay paying amounts that are already due.

3) When must final pay be released?

As a general rule, employers should release within 30 calendar days from the date of separation (or earlier if company policy/CBA/contract says so).
Certificate of Employment (COE) must be issued within 3 days from your request.
Longer holds are risky for employers—labor authorities can order payment with legal interest for delay.

Practical rhythm: Last day → return property/clearance → Get written computation → Release within 30 days (or as your policy/CBA promises).

4) Special points for agency-deployed workers

Who pays you? The agency should process and release final pay.
What if the agency cannot or will not pay?
- You may demand from the principal as well, based on joint and solidary liability for labor standards benefits under the Labor Code and its rules on contracting/subcontracting.
- If the arrangement is labor-only contracting, you can treat the principal as your employer for labor standards/tenure claims.
End-of-contract (“ENDO”) or project completion:
- You still get earned wages, pro-rated 13th-month, and cash conversion of unused SIL/leave.
- Separation pay is not due unless an authorized cause exists or your contract/CBA grants it.
Transfer/absorption by principal: If the principal absorbs you, your final pay from the agency should cover your accrued benefits up to the transfer date; subsequent benefits will accrue under the new employer.

5) Taxes and government contributions at separation

13th-month and other benefits are tax-exempt up to ₱90,000 (TRAIN Law). Amounts beyond the cap are taxable.
Separation benefits due to authorized causes (e.g., redundancy, retrenchment) are generally income tax-exempt under the NIRC.
The employer must remit your SSS/PhilHealth/Pag-IBIG contributions for all covered periods. Request your final contribution report if you need it for benefits (e.g., SSS unemployment benefit in involuntary separation).

6) Quitclaims, releases, and waivers

Employers often ask you to sign a Quitclaim/Release upon receiving final pay. The Supreme Court has consistently held that quitclaims are not per se invalid, but they are disfavored and set aside when the consideration is unconscionably low, you signed under duress or deception, or statutory benefits were waived. Even after signing, workers may still pursue deficiencies in mandatory benefits.

Guidance: If you sign a quitclaim, note “Received under protest” or “Without prejudice to claims for deficiencies” when appropriate, and keep copies of everything you sign or receive.

7) How to compute (clean and defensible way)

Because payroll “divisors” vary (monthly-paid vs daily-paid; 365/313/261/26 factors under DOLE tables), do this:

List the items due (see Section 2).
Use the company’s published divisor (handbook/contract) consistent with DOLE factor tables for your pay type.
Compute each component separately with dates/work logs, then subtotal.
Apply lawful deductions with documentation (tax tables, written loan authorizations, inventory reports).
Attach the workings (dates, rates, divisor, proofs). This is what DOLE/NLRC conciliators look for.

Red flags for workers and HR alike: unexplained “forfeitures,” blanket deductions for “training,” and failure to pro-rate 13th-month/SIL.

8) Step-by-step: How to claim your final pay

A) Request & follow-up (internal)

Written demand to the agency (HR/payroll): request the itemized final pay computation, release date, and COE.
CC the principal (if you were deployed) citing solidary liability for labor standards benefits.
Offer a clearance schedule and return any property to avoid disputes.

B) Conciliation with DOLE (SENA) 4. If unpaid or underpaid after your follow-ups, file a Single-Entry Approach (SENA) request at the DOLE Field/Regional Office where you worked or where the agency is located. It’s free, quick, and often resolves payroll disputes within a short conciliation period.

C) Formal case (if needed) 5. If SENA fails, file the appropriate case:

Money claims only (no reinstatement) not exceeding the minimal threshold may be taken by the DOLE Regional Director through summary proceedings.
Larger/complex money claims or those with illegal dismissal/reinstatement issues go to the NLRC (Labor Arbiter).
If you are an OFW recruited by a Philippine agency, money claims under the overseas employment contract are generally filed with the NLRC; recruitment violations are administrative and pursued with the DMW (formerly POEA).

D) Evidence checklist

Employment contract/appointment, deployment order, IDs.
Payslips, time records, OT/NSD approvals, leave ledger.
Company handbook/policy/CBA pages on benefits/divisors.
Clearance forms, property return receipts.
Your written demand and the employer’s reply (or non-reply).
Any quitclaim/release and proof of amounts actually paid.

E) Prescriptive periods (deadlines to sue)

Money claims (wages, 13th-month, SIL, separation/retirement pay): 3 years from when each claim accrued.
Illegal dismissal: 4 years from dismissal.
Don’t wait—interest can accrue, but late filings risk forfeiture by prescription.

9) Frequent scenarios & quick answers

Resigned with notice: You’re entitled to wages to last day, pro-rated 13th-month, leave conversions; no separation pay unless policy/CBA says so.
Resigned without full 30-day notice: Employer may recover provable damage from short notice if your contract/policy says so and due process is observed; they still cannot forfeit statutory benefits.
AWOL: Still entitled to earned wages/benefits (subject to due deductions).
Terminated for just cause: No statutory separation pay; still get earned wages, pro-rated 13th-month, SIL conversions.
Redundancy/retrenchment/closure: Separation pay per Section 2 applies; tax-exempt.
Unreturned uniform/tools: Deduction must be reasonable, documented, and preceded by notice/hearing—no blanket forfeiture.
Training bonds: Enforceable only if reasonable, time-bound, and proportionate to actual training cost; they can’t erase your statutory benefits.

10) Simple demand-letter template (you can reuse/edit)

Subject: Demand for Final Pay, Computation, and Certificate of Employment To: $Agency HR/Payroll$ (CC: $Principal HR$)

Dear $Name/HR$,

I ended my employment on $date$ under $reason$. I respectfully request:

the itemized computation of my final pay (wages to last day, pro-rated 13th month, SIL/leave conversions, and other accrued benefits),

the release of my final pay within 30 days from separation (or earlier per policy), and

my Certificate of Employment within 3 days from this request.

I completed clearance/returned company property on $date$ (see attached). As deployment was to $principal$, please note the principal’s solidary liability for statutory benefits.

Kindly confirm the release date and provide the computation sheet. If unresolved, I will seek assistance through DOLE SENA and other remedies.

Thank you, $Name$ | $Position$ | $Employee No.$ | $Contact$

11) For employers (agencies & principals): compliance checklist

Publish your payroll divisors and benefit rules consistent with DOLE factor tables.
Issue written final pay computation and COE promptly; release within 30 days.
Do not impose blanket forfeitures; document and notify for any deductions.
For deployment setups, remember solidary liability; coordinate early with the principal on pending payables.
Keep signed receipts, quitclaims (if any), and proof of remittances for audit.

12) Key takeaways

30 days is the practical outer limit for releasing final pay; COE within 3 days of request.
Agency is employer of record, but principal shares solidary liability for labor standards benefits.
Mandatory inclusions often missed: pro-rated 13th-month, SIL cash conversion, and premium/NSD/holiday differentials.
Separation pay depends on the cause of termination.
If delayed or short-paid, use SENA first; escalate to DOLE/NLRC within 3 years (money claims) / 4 years (illegal dismissal).

Need help tailoring this to your facts (dates, rates, and cause of separation)? Share the timeline, last pay slip, and any computation you received—I’ll run the numbers and draft a demand that fits.