Service incentive leave, or SIL, is the minimum paid leave in the Labor Code: five days a year for every employee who has worked at least a year. Unused days are paid in cash. Here is who is covered, who is exempt, and how to compute the conversion.
- Five days of paid leave a year, after one year of service.
- Usable for any purpose: vacation, sickness or emergencies.
- Unused days are paid in cash at year end or on separation.
- Not required where the employer already grants five or more days of paid leave.
Who is entitled
Every employee who has rendered at least one year of service, whether continuous or broken, is entitled. One year means service within twelve months, counting authorized absences and paid regular holidays. Part-time and daily-paid workers are covered too.
The law exempts:
- employees who already enjoy at least five days of paid vacation leave
- establishments regularly employing fewer than ten employees
- managerial employees, field personnel and others whose time cannot be determined with reasonable certainty
- government employees
Converting unused SIL to cash
Use the employee's salary rate when the leave is converted, not the rate when it was earned.
- Daily rate
- ₱755.00
- Unused days
- 5
- Cash conversion
- ₱3,775.00
- Daily rate: 22,000 × 12 ÷ 313
- ₱843.45
- Unused days
- 3
- Cash conversion
- ₱2,530.35
SIL and the 13th month pay
Cash conversions of leave are not part of the basic salary used for 13th month pay, so the conversion does not increase it. Days of SIL actually taken are paid at the basic rate and do count.
Kasambahay leave is different
Under the Batas Kasambahay, household workers also get five days of paid leave after a year of service. Unused days are not carried over and not converted to cash. See the kasambahay employer guide.