For HR, payroll, and departing employees. This explains what final pay is, when it must be released, whether a notarized document can be required, the law on quitclaims, and practical steps if pay is withheld.

1) Final pay: what it generally includes

“Final pay” (a.k.a. last pay/separation pay package) is the sum of all amounts legally due to a departing employee, typically:

Unpaid wages/salary up to last day worked
13th-month pay (pro-rated)
Service Incentive Leave (SIL) conversion, if unused and applicable
Overtime/holiday/night differential still unpaid
Salary differentials/allowances contractually due
Tax refund or tax due (year-to-date reconciliation)
Separation pay, retirement pay, or redundancy pay, if the separation ground entitles the worker
Statutory contributions withheld/remitted correctly (SSS, PhilHealth, Pag-IBIG)

Certificates: Employers must issue the Certificate of Employment upon request (within a few days) and the BIR Form 2316 after year-end or upon separation.

2) Release timeline (standard rule of thumb)

Under current DOLE practice, final pay is expected to be released within 30 calendar days from the date of separation or completion of company clearance (whichever the employer’s policy uses), unless a more favorable timeline is adopted in a CBA/contract or an earlier release is operationally possible.

Employers may run clearance (return of tools, IDs, laptops, cash advances accounting), but clearance is a process—not a ransom.
If there’s a bona fide, documented debt or loss attributable to the employee, employers may offset against final pay only if the deduction is lawful, reasonable, and supported (e.g., written authorization or a clear legal basis). Purely punitive “penalties” not grounded in law/contract are risky.

3) Can an employer require notarization before releasing final pay?

Short answer

There is no general law that requires employees to submit a notarized document as a precondition to the release of their earned wages/benefits.
Conditioning payment of statutory/earned amounts on signing (or notarizing) a quitclaim/release/waiver is legally precarious and may constitute unlawful withholding.

What employers may validly require

Company clearance (return of property, accountabilities reconciliation)
Acknowledgment receipt for the amounts released (this need not be notarized)
Tax/HR forms necessary for proper reporting (e.g., correct bank details, personal data updates)

If an employer insists on notarization

If the employer requires a notarized quitclaim or receipt, the employer should shoulder the cost and logistics—because it is an employer-imposed requirement above the legal minimum needed to pay wages.
An employee cannot be compelled to waive statutory rights in exchange for release of amounts that are already due (e.g., unpaid wages, 13th month). A release that becomes a condition for receiving legal entitlements risks invalidation.

4) Quitclaims & releases: when are they valid?

Philippine jurisprudence recognizes quitclaims with caution. They are not per se void, but not favored and may be struck down if:

Not voluntary (signed due to coercion, deceit, or undue pressure)
Unconscionable consideration (amount is grossly inadequate compared to what the law grants)
Contrary to law (purports to waive statutory benefits that cannot be waived)
Lack of full disclosure (employee not adequately informed of entitlements)

Notarization effect: Notarization turns a document into a public instrument, giving it a presumption of regularity—but that presumption is rebuttable. Courts look at substance (voluntariness and adequacy), not the notarial seal alone.

Practical rule: A fair, voluntary settlement that meets or exceeds legal entitlements, entered with informed consent, can be upheld—with or without notarization.

5) Is it lawful to withhold final pay until a notarized quitclaim is signed?

For earned/statutory components (wages, 13th month, SIL conversion, etc.): No. Withholding purely to force a notarized quitclaim is a form of coercion and risks labor standards violations (unlawful withholding/kickbacks).
For settlement components that are discretionary or subject to compromise (e.g., “ex-gratia” sums, enhanced redundancy beyond law): Parties may agree to document via a release; notarization is a documentation choice, not a statutory requirement.
Best practice is to separately release the undisputed/earned amounts promptly, while documenting any settlement for additional sums on its own merits.

6) Deductions, offsets, and clearance—what’s allowed

Employers may deduct from final pay if all three hold:

Legal basis (law, regulation, or written authorization by the employee for a determinate amount)
Actual loss/liability exists (documented: inventory variance, unliquidated cash advance, property not returned)
Reasonableness (deduction is commensurate; no hidden “penalties”)

Not allowed: Open-ended, punitive, or unitemized deductions (“miscellaneous penalties,” “training bond” without a valid, reasonable agreement, or liquidated damages that shock the conscience).

7) HR best practices (to stay lawful and reduce disputes)

Release timeline policy: Publish the 30-day standard (or faster) and follow it.
Two-envelope method:
- Envelope A – Undisputed/earned (wages, 13th, SIL, etc.) — release without demanding a quitclaim.
- Envelope B – Settlement/extra (ex-gratia, enhanced packages) — document by Release, Waiver & Quitclaim; notarize if you wish, at employer’s expense.
Form hygiene: Use a simple acknowledgment receipt (non-waiver) for Envelope A.
Transparency: Give a computation sheet showing each line item and deduction, signed by payroll/HR.
Clearance scope: Limit to return of property and true accountabilities; avoid weaponizing clearance to delay lawful pay.
Notary logistics: If insisting on notarization for the settlement release, provide an in-house notary schedule or cover costs.

8) Employee playbook if pay is being withheld for a notarized quitclaim

Ask in writing for the itemized final pay computation and release date.
Accept and receipt undisputed amounts via a non-waiver acknowledgment (sample below).
If employer still withholds earned pay pending a notarized quitclaim, send a demand letter invoking unlawful withholding and offering to sign a simple receipt instead.
Escalate to DOLE (Single-Entry Approach/SEnA) for assisted settlement; if unresolved, file a labor standards complaint for money claims and illegal deductions.
If signing a release for extra settlement sums, ensure the consideration is adequate and the document states you have received all statutory entitlements separately.

9) Templates you can adapt

A) Acknowledgment (non-waiver) for earned pay

Acknowledgment of Receipt (No Waiver)

I, [Name], acknowledge receipt of ₱[amount] representing [list items: wages to [date], 13th-month, SIL conversion, etc.]. This acknowledgment is not a release or waiver of any claim. It covers statutory/earned pay only. [Signature / Date]

B) Employee demand to release earned pay without quitclaim

Subject: Release of Earned Final Pay Without Quitclaim Requirement

Dear [HR], Kindly release my earned final pay (wages, 13th-month, SIL conversion, etc.) by [date]. These are statutory/earned amounts and should not be conditioned on a notarized quitclaim. I am ready to sign a simple acknowledgment receipt. Any settlement for additional/ex-gratia benefits may be separately documented. [Name / Contact]

C) Settlement release (use only for extra sums; employer covers notary)

Release, Waiver & Quitclaim (Settlement Components Only)

I, [Name], confirm receipt of ₱[amount] as ex-gratia/settlement benefits in addition to all statutory/earned pay already released. I voluntarily execute this release solely for these additional amounts, without prejudice to statutory rights. [Signature / Date] (Notarization at employer’s expense if required.)

10) FAQs

Is notarization ever mandatory to pay final wages? No. There is no blanket legal requirement. Notarization is a documentation choice, not a precondition to paying earned amounts.

My employer says “no notarized quitclaim, no last pay.” What now? Demand release of earned/statutory components with a non-waiver acknowledgment. If refused, SEnA/DOLE is the fast track for intervention.

Can I sign a quitclaim then still sue? Courts may set aside quitclaims that are involuntary, unconscionable, or illegal. Notarization alone does not make an unfair quitclaim bullet-proof.

Who pays the notary if the company insists? The employer should, since it is an employer-imposed requirement beyond what the law requires to release wages.

Can the company deduct “training bond” or “liquidated damages” from last pay? Only if there is a valid, reasonable agreement and the amount is determinate and not punitive. Overbroad or punitive bonds are commonly reduced or disallowed.

11) Bottom line

No law requires a notarized document to release earned final pay.
Employers may document settlements for extra amounts via a (notarized) quitclaim, but must separately and promptly pay statutory/earned components—without coercive conditions.
Keep clearance reasonable, deductions lawful and documented, and use simple acknowledgments for wages. Where employers overreach, SEnA/DOLE and the courts provide quick remedies.