In the Philippines, the Labor Code provides for Service Incentive Leave (SIL) — five days of paid leave per year for employees who have rendered at least one year of service. This is the minimum statutory entitlement; many employers offer additional vacation leave through company policies or collective bargaining agreements. Government employees enjoy more generous leave benefits under separate regulations.

Statutory entitlement

5 days of paid Service Incentive Leave per year after one year of service. Unused SIL is convertible to cash at the end of the year.

Eligibility

All employees who have rendered at least one year of service are entitled to SIL. This includes employees in all establishments, regardless of the number of employees, except government employees and those in establishments already providing similar benefits.

Employer obligations

  • Grant 5 days of paid Service Incentive Leave to eligible employees.
  • Pay the employee's daily rate during SIL.
  • Convert unused SIL to cash at the end of the year if not used.
  • Not deduct pay for SIL days taken within the statutory entitlement.
  • Maintain records of SIL taken by each employee.

Employee rights

  • Right to 5 days of paid Service Incentive Leave after one year of service.
  • Right to cash conversion of unused SIL.
  • Right to additional vacation leave if provided by company policy or collective agreement.

Common pitfalls

  • Confusing SIL with vacation leave — SIL is the statutory minimum. Many companies offer additional vacation leave (VL) and sick leave (SL) credits.
  • Not converting unused SIL to cash — this is a statutory requirement.
  • Not accounting for one year of service — the entitlement only kicks in after 12 months of employment.

How Service Incentive Leave works

SIL provides five days of paid leave per year after the employee has completed one year of service. The leave can be used for any purpose — it is not restricted to vacation or sick leave. Unused SIL must be converted to cash at the end of the year.

Company-specific leave benefits

Many Philippine companies offer additional leave benefits beyond SIL, such as vacation leave (VL), sick leave (SL), maternity leave, and paternity leave. These are governed by company policies or collective bargaining agreements.

Government employee leave

Government employees in the Philippines are covered by separate leave regulations under the Omnibus Rules on Leave, which provide more generous benefits including 15 days of vacation leave and 15 days of sick leave per year.

Frequently asked questions

Can unused SIL be carried forward?

Unused SIL must be converted to cash at the end of the year. It cannot be carried forward unless the employer's policy allows it.

Is SIL the same as vacation leave?

No. SIL is the statutory minimum (5 days). Vacation leave (VL) is an additional benefit offered by many companies, typically 15 days per year.

Are part-time employees entitled to SIL?

Yes, if they have rendered at least one year of service. The entitlement is the same 5 days regardless of employment status.

Sources

This page is provided for general guidance and does not constitute legal advice. Always check the cited primary source for current law before making employment decisions.