Calculates your mandatory 13th month pay based on your basic salary, months worked, and unpaid absences. Compliant with PD 851 and TRAIN Law tax exemption.
Free, no sign-up
Calculate →
What is Service Incentive Leave (SIL) Pay?
Service Incentive Leave (SIL) is a benefit granted to employees in the Philippines under Article 95 of the Labor Code. After at least one year of service, an employee is entitled to five days of paid leave. This leave is intended for personal use, such as rest or attending to personal matters. Crucially, if these leave days are not used, the employee may convert them to their cash equivalent upon separation from the company or at other times as allowed by company policy or collective bargaining agreements. This conversion is commonly referred to as SIL pay.
How is SIL Pay Calculated?
The calculation follows a straightforward rule established by law:
- Determine Years of Service: Count the number of full years between your date of hire and the date of calculation (e.g., your last day of work). Only complete 12-month periods are counted; partial years do not earn additional SIL days.
- Calculate Total SIL Days Earned: Multiply your years of service by 5, which is the statutory number of SIL days granted per year.
- Identify Convertible Days: The number of days you can convert to cash is the lesser of: (a) the unused SIL days you have, or (b) the total SIL days you have earned. You cannot be paid for more days than you have accrued.
- Compute the Monetary Value: Multiply the number of convertible unused days by your daily rate to arrive at the gross SIL pay amount.
Example Calculation
Let's walk through a detailed example. Maria was hired on June 1, 2021. She resigned, and her last day of employment was May 31, 2024. Her regular daily wage is PHP 1,800, and she has 7 unused SIL days that she did not take during her employment.
- Years of Service: From June 1, 2021, to May 31, 2024, she has completed 3 full years. Even though it's exactly 3 years to the day, any period less than a full year after that would not count.
- Total SIL Days Earned: 3 years × 5 days/year = 15 days. This is her total entitlement.
- Convertible Unused Days: She has 7 unused days, which is less than the 15 days earned. Therefore, all 7 days are eligible for conversion.
- SIL Pay Amount: 7 days × PHP 1,800/day = PHP 12,600.
Thus, upon her separation, Maria is entitled to receive PHP 12,600 as her SIL pay, before any applicable taxes or deductions.
Common Scenarios and Applications
Resignation or Termination
This is the most common scenario for SIL pay computation. Upon resignation, retirement, or termination (provided it is not for a just cause that results in forfeiture), any unused SIL days accrued during your tenure must be paid out. The calculation date should be your last day of employment, as it is the final day for accruing service years.
Mid-Year Conversion While Employed
Some companies, through policy or agreement, allow the monetization of unused SIL days even while the employee remains with the company. In this case, the calculation date is the current date, and years of service are counted up to that point. This can be useful for employees who need cash and have accumulated leave.
Less Than One Year of Service
Employees who have worked for less than one year are not yet entitled to SIL. The calculator will show zero earned days and, consequently, a zero payable amount. It's important to know that the one-year requirement is a minimum threshold.
Carry-Over and Company Policies
While the law sets the minimum, your company may have a more generous policy regarding the number of SIL days, carry-over rules, or conversion terms. Always refer to your employee handbook, contract, or collective bargaining agreement, as these favorable terms will prevail over the minimum legal standard.
What to Do After Calculating Your SIL Pay
Understanding your entitlement is the first step. If you are planning to use your leave days instead of converting them, you should formally notify your employer by filing a Leave Request Form. This document ensures your request is documented and processed according to company policy.
If you are separating from your company and are owed SIL pay, you will typically need to submit a formal Resignation Letter. A clear and professional resignation letter helps ensure a smooth transition and may facilitate the final settlement process, including the payment of your SIL pay, final salary, and other benefits. Our platform provides tailored templates for both documents to help you prepare them correctly and efficiently.