There're free and paid tools for encode your php script. Personally I like Byterun Online Free PHP Encoder for a small job, it's an online tool and cost nothing but if you're in a big project you may looking for other tools.

But free tools not really good because if you encoded your script you will find it in all forums (open source) i used SourceCop 3.0 in encode my script but it decoded .

What will happenned to PHP scripts after encoded

Example
Before encode

<?php
echo "Hello World";
?>

<?php
eval(base64_decode('JF9YPWJF9kZGUoJF9YKTskX
hb3VpZScsJ2FvdWllMTIzNDU2Jyk7JF9SPWVyZWdf
CRfWCk7ZXZhbCgkX1IpOyRfUj0wOyRfWD0wOw=='));
?>

As you see PHP code after encoded, you don't understand it, but this code still executable and the result is the same as result before encode.

Here is the list of tools