Resigning ends the employment relationship, but it does not end your right to be paid what you have already earned. In the Philippine setting, employees who resign are generally entitled to (1) final pay (also called “back pay”), which may include unpaid wages and other monetary entitlements; (2) pro-rated 13th month pay; and (3) cash conversion of certain unused leaves, depending on what the law and your company policy provide.

This article explains the legal landscape, what you can claim, how amounts are typically computed, what employers can (and cannot) require, and what to do if payment is delayed.

1) Core Concepts

A. What “Final Pay” Means

“Final pay” is the total amount due to an employee after separation (including resignation), after lawful deductions. It is not a single benefit—rather, it is a bundle of whatever you are still owed.

Final pay commonly includes:

Unpaid salary/wages up to your last day (including unprocessed payroll periods)
Pro-rated 13th month pay
Cash equivalent of unused leave credits that are convertible/commutable (by law or policy)
Unpaid overtime pay, holiday pay, night shift differential, rest day pay, if earned but unpaid
Commissions/incentives already earned and determinable under your plan/policy
Tax adjustments/refund, if any (depending on payroll and withholding)
Other amounts due under a company policy, employment contract, or CBA

It usually does not include “separation pay” merely because you resigned (more on this below).

B. Resignation vs. Termination Matters

Your entitlements can differ depending on whether you resigned, were terminated, or were separated due to redundancy/closure/authorized causes. This article focuses on voluntary resignation, where the baseline rule is: you get what you earned and what the law/policy says must be paid upon separation.

2) Legal Foundations You’ll Keep Seeing

While this isn’t a case digest, the most relevant anchors in Philippine labor practice are:

Labor Code provisions on payment of wages and permissible deductions
Service Incentive Leave (SIL) rules (Labor Code) on minimum leave entitlement and commutation of unused SIL
Presidential Decree No. 851 (13th Month Pay Law) and its implementing guidelines
DOLE issuances (commonly relied upon in HR practice) on release of final pay within a reasonable period (often applied as a 30-day guideline in practice) and issuance of employment documents such as a Certificate of Employment upon request
Tax rules (BIR) on withholding and the tax-exempt threshold for 13th month and certain benefits (commonly known as the “de minimis and benefits cap,” historically set at ₱90,000 under TRAIN—verify current thresholds if your case is high-value)

3) What You Can Claim After Resignation

A. Unpaid Salary/Wages (Basic Pay)

You are entitled to salary for all days actually worked up to your last day, including:

unpaid regular wages
salary differentials (if there was an underpayment)
unpaid premium pays (overtime, night diff, holidays, rest days) if already earned
unpaid allowances that are wage-integrated or contractually promised

Practical note: Many payroll systems pay in arrears; your final pay often covers the last payroll cut-off plus remaining days not yet paid.

4) 13th Month Pay After Resignation

A. Who Is Entitled

As a rule, rank-and-file employees in the private sector are entitled to 13th month pay under PD 851 and its rules. Even if you resign before December, you are typically entitled to a pro-rated amount for the period you worked during the calendar year, unless you are clearly excluded by law/rules (e.g., certain managerial employees depending on the applicability of the issuance and how the employer classifies roles under the implementing guidelines).

B. What “Pro-Rated” Means

If you resign mid-year, the typical formula is:

Pro-rated 13th Month Pay = (Total Basic Salary Earned During the Year ÷ 12)

“Basic salary” generally refers to basic pay, excluding certain allowances and monetary benefits that are not considered part of basic salary under the implementing rules (treatment can vary by benefit type).
If you received a partial 13th month earlier (some companies pay half in May/June and half in November), your final pay should include the remaining balance.

C. Example Computation (Illustrative)

Basic monthly salary: ₱30,000
Worked from January to August (8 months) and earned ₱240,000 basic salary
Pro-rated 13th month = ₱240,000 ÷ 12 = ₱20,000

If the company already paid ₱10,000 in mid-year, then the remaining due is ₱10,000.

D. Tax Treatment (Important but Often Confusing)

13th month pay and certain benefits are commonly tax-exempt up to a ceiling (widely known as ₱90,000 under TRAIN-era rules). Amounts above the ceiling may be taxable. Employers compute withholding using your year-to-date compensation and applicable tax rules.

Because tax rules can change, treat the cap as something to verify if the numbers are significant.

5) Unused Leave Credits: What Must Be Paid, and What Depends on Policy

A. Service Incentive Leave (SIL): The Statutory Minimum

Under the Labor Code, eligible employees who have rendered at least one year of service are generally entitled to at least five (5) days of service incentive leave per year, unless the employee or establishment is lawfully exempt.

A crucial point: unused SIL is commutable to cash (i.e., convertible to its money equivalent) under the law’s framework on SIL commutation.

So if you have unused SIL when you resign, you typically can claim its cash equivalent, subject to how your employer tracks SIL and any lawful exemptions.

B. Vacation Leave (VL) / Sick Leave (SL): Usually Policy-Driven

Beyond SIL, most VL/SL benefits in private employment are company-granted benefits, not always required by statute. Whether unused VL/SL is payable upon resignation depends on:

your employment contract
the company handbook/policy
a Collective Bargaining Agreement (CBA)
established practice (if consistently paid out and relied upon)

Some companies:

allow VL payout but not SL payout
allow payout only if you are regular or only if leaves are earned and not forfeited
impose a cutoff or maximum convertible days

C. Common Leave Payout Formula

If your leave is convertible, the cash equivalent typically uses your daily rate:

Leave Payout = (No. of Convertible Unused Leave Days) × (Daily Rate)

Daily rate is often derived from:

Monthly salary ÷ 26 working days (common corporate practice), or
Another divisor consistent with company policy and payroll setup

Because divisor rules vary, ask HR for the company’s standard computation basis.

D. Leaves That Typically Are Not “Cashed Out”

Leaves created for specific purposes (e.g., maternity, paternity, parental leaves) are typically not treated as convertible cash benefits unless a law or company policy explicitly allows it. These are generally meant to be availed, not monetized.

6) Separation Pay: Usually Not Included When You Resign

Separation pay is generally associated with authorized cause terminations (e.g., redundancy, retrenchment, closure not due to serious losses) or other legally recognized circumstances and is not automatically owed upon voluntary resignation.

That said, you might still receive an amount resembling “separation pay” if:

your company policy or contract grants an ex gratia benefit
a CBA provides a separation/resignation benefit
a negotiated exit package is offered (discretionary)

Do not assume resignation automatically produces separation pay; it’s usually not a legal default.

7) Employer “Clearance” and Return of Company Property

A. Can the Employer Require Clearance?

Employers commonly require clearance to ensure you’ve returned company property and completed handover. This is generally allowed as an internal process.

B. Can Clearance Be Used to Withhold Your Money Indefinitely?

A clearance process should not become a tool to delay payment unreasonably. In Philippine practice, DOLE guidance is often applied so that final pay is released within a reasonable period (commonly observed as within 30 days from separation, unless a more favorable company policy exists). Delays should be justified, proportionate, and not punitive.

C. Lawful Deductions vs. “Hostage” Deductions

Employers may deduct only what is lawful—for example:

employee loans/cash advances with documentation
authorized deductions (with employee written authorization when required)
properly established accountabilities (e.g., unreturned equipment) with due process and clear valuation, consistent with wage deduction rules

What is risky or improper:

blanket penalties not grounded in policy/contract
arbitrary “damages” without basis
withholding the entire final pay when only a specific item is in dispute

If there is a real dispute (e.g., property accountability), the better practice is to compute final pay and address only the disputed portion through a documented, lawful mechanism.

8) Timing: When Should Final Pay Be Released?

There is no single universal “one-size-fits-all” statutory deadline across all scenarios in the Labor Code text itself, but Philippine labor practice strongly leans on DOLE guidance that final pay should be released within a reasonable time, frequently operationalized as around 30 days from the date of separation, unless:

company policy provides a shorter period, or
there are exceptional circumstances that must be explained and documented

Best practice for employees: Assume you should start following up if you have not received a computation and release schedule within two to three weeks, and escalate by day 30 if there is no clear action.

9) Step-by-Step: How to Claim and Protect Your Final Pay

Step 1: Resign Properly (Document Everything)

Submit a signed resignation letter (email is fine if acknowledged).
State your effective last day (and comply with any notice period unless you have a lawful reason for immediate resignation).
Ask HR to confirm: last day, clearance steps, final pay release timeline, and where it will be deposited.

Step 2: Request a Written Final Pay Computation

Ask for an itemized breakdown showing:

unpaid salary days and cutoffs covered
pro-rated 13th month computation
leave conversion basis and number of days credited
deductions (with supporting documents)

A written computation reduces disputes.

Step 3: Complete Clearance Efficiently

Return company property and obtain receipts/acknowledgment.
Submit required handover documents.
Keep copies/screenshots of signed clearance steps.

Step 4: Review Deductions Carefully

Check if deductions are:

consistent with your signed authorizations, loan docs, or policy
arithmetically correct
not duplicative (e.g., deducting an item already returned)

If something is wrong, dispute it in writing and propose correction.

Step 5: Be Cautious with Quitclaims/Release Forms

Employers sometimes ask you to sign a quitclaim or “Release, Waiver and Quitclaim” to receive final pay.

In general Philippine jurisprudence, quitclaims can be valid if they are:

voluntary
for a reasonable consideration
not unconscionable
not obtained through fraud, coercion, or deception

If you suspect underpayment, you can:

request a corrected computation first, or
sign only after ensuring the figures are correct (or seek legal advice if the sums are substantial)

Step 6: Escalate If Unpaid or Unreasonably Delayed

If HR remains unresponsive or refuses to release final pay without valid reason, you may pursue:

a written demand letter (polite but firm; attach timeline and documents)
DOLE assistance mechanisms (commonly through Single Entry Approach / mediation)
labor claims where appropriate (depending on the dispute nature and amount)

10) Common Problem Areas and How to Handle Them

A. “We won’t release final pay until you submit a resignation acceptance.”

Resignation is generally a unilateral act; acceptance is not always necessary to make it effective, especially when the notice period is observed and the intent is clear. What matters is proper documentation of your resignation and last day.

B. “You resigned, so you forfeit your 13th month.”

If you worked during the year and are covered by 13th month rules, you generally remain entitled to pro-rated 13th month.

C. “Unused leave isn’t payable.”

For SIL, commutation is part of the statutory framework. For VL/SL, it depends on policy or contract. Ask HR to cite the specific handbook provision or contract clause if they deny payout.

D. “We deducted ‘training bond’ or ‘liquidated damages.’”

Training bonds can be enforceable if they are clear, reasonable, and not contrary to law/public policy. But deductions from wages still must comply with lawful deduction rules and due process. If the amount is large, treat this as a legal issue and consider formal dispute mechanisms.

E. “We offset your final pay with alleged damages or missing items.”

Require a documented inventory, valuation, and proof of accountability. Push back against arbitrary deductions.

11) Quick Checklist for Employees (Resignation Final Pay)

Before your last day

Save payslips, employment contract, handbook excerpts, incentive plan terms
Confirm last day and payroll cutoff coverage
Ask HR for final pay release schedule and required steps
Download timesheets/attendance logs if available

On or after your last day

Complete clearance and keep proof
Request itemized final pay computation
Verify pro-rated 13th month calculation
Verify leave balance and convertibility basis
Verify deductions are lawful and documented
Follow up in writing until paid

12) Frequently Asked Questions

Q1: How soon should I expect final pay?

In practice, many employers target release within about 30 days from separation, sometimes sooner depending on payroll cycles and clearance.

Q2: Can the company pay in cash or check instead of bank transfer?

Yes, as long as payment is actually made and properly documented. Bank transfer is common for audit trail.

Q3: If I did not finish the 30-day notice, can they withhold my pay?

They should not withhold wages already earned as a punishment. However, they may pursue legitimate claims for damages under specific circumstances, subject to proof and lawful processes. Avoid “self-help” deductions that violate wage rules.

Q4: Do I get 13th month pay even if I worked only a few months?

Typically yes, pro-rated, if you are covered by 13th month rules.

Q5: Is unused Sick Leave payable?

Often no, unless the company policy/CBA provides conversion. Unused SIL and convertible VL are more commonly paid out than SL.

13) Practical Template: What to Email HR (Key Points)

When following up, keep it simple:

confirm last day and clearance completion date
request itemized final pay computation
ask for release date and mode of payment
ask for breakdown of 13th month and leave conversion
request supporting basis for any deductions

Closing Note

After resignation, your strongest tools are documentation, a written computation, and a clear understanding of what is legally mandated (like pro-rated 13th month for covered employees and commutation principles for SIL) versus what is policy-based (like payout of VL/SL beyond statutory minimums). If delays become unreasonable or deductions appear arbitrary, escalation through formal labor assistance mechanisms is available.

If you want, tell me your situation (industry, tenure, last day, salary structure, leave balances, and what HR is saying), and I’ll help you draft a precise demand email and sanity-check the computations.