How to Compute SIL Leave Encashment in the Philippines
The exact arithmetic for cashing out unused Service Incentive Leave in the Philippines, worked through in a table.
Computing Philippine leave encashment is quick once you know your unused Service Incentive Leave (SIL) balance and your daily rate. This walkthrough shows the arithmetic and a comparison table, matching the Philippines Leave Encashment Calculator.
Step 1 — Confirm your unused SIL days
The statutory minimum is 5 SIL days per year for rank-and-file employees with at least one year of service. Check how many you have left unused — that is the number you encash. If your employer grants more paid leave than the 5-day minimum, whether the extra is encashable depends on company policy.
Step 2 — Work out your daily rate
Divide your monthly pay by 30:
PHP 20,000 ÷ 30 = PHP 667/day
Step 3 — Multiply
Encashment = daily rate × unused SIL days
PHP 667 × 5 days = PHP 3,333.
Worked-example table
| Monthly pay | Daily rate (÷30) | 3 unused days | 5 unused days |
|---|---|---|---|
| PHP 12,000 | PHP 400 | PHP 1,200 | PHP 2,000 |
| PHP 18,000 | PHP 600 | PHP 1,800 | PHP 3,000 |
| PHP 20,000 | PHP 667 | PHP 2,000 | PHP 3,333 |
| PHP 30,000 | PHP 1,000 | PHP 3,000 | PHP 5,000 |
Where SIL fits in your final pay
On separation, your unused SIL is added to your final pay together with pro-rated 13th-month pay and, if applicable, separation pay. Each is computed separately — SIL is not part of the separation-pay formula.
A note on daily-paid workers
For monthly-paid staff the ÷30 daily rate is standard. Daily-paid or piece-rate workers use their actual established daily wage. Either way, the encashment is that daily rate multiplied by unused SIL days.
Confirm your figure on the calculator. Statute: Labor Code (Article 95), per DOLE.
Monthly-paid vs daily-paid workers
The daily rate is the crux of the calculation, and it is derived differently depending on how you are paid. Monthly-paid employees divide their monthly salary by 30 to get the daily rate. Daily-paid or piece-rate workers use their actual established daily wage directly. Either way, the encashment is that daily rate multiplied by unused SIL days. Using the wrong basis — for instance dividing a daily-paid worker's notional "monthly" figure by 30 — can distort the result, so start from how your pay is actually structured.
Pro-rating SIL in the year you leave
If you separate partway through a year, whether you can encash a pro-rated portion of that year's SIL depends on how your employer accrues it. Many employers credit SIL proportionally as the year progresses; others credit it in full at a set point. Check your leave record for the balance actually credited to you — that credited balance, not a theoretical five days, is what you encash. The calculator multiplies whatever balance you enter by your daily rate.
Where SIL sits relative to 13th-month pay
SIL encashment and 13th-month pay are both common items in a Philippine final pay, but they are separate. 13th-month pay is a mandated year-end benefit equal to one-twelfth of your basic salary earned in the year, pro-rated on separation; SIL encashment is your unused statutory leave converted to cash. Neither is part of the other, and neither is part of separation pay. Add them as distinct lines when you total your final pay.
Verifying the number
To check your encashment, confirm three things: the unused SIL day count from your leave record, the daily rate appropriate to how you are paid, and that you have completed the one year of service that triggers statutory SIL. Enter the figures on the SIL encashment calculator to confirm, and see the wider final-pay picture on the Philippines hub.
Key takeaways
- SIL encashment = daily rate × unused SIL days; monthly-paid staff use monthly pay ÷ 30 for the daily rate.
- The statutory entitlement is 5 SIL days a year after one year of service, for rank-and-file employees.
- Only the 5-day SIL portion must be cashed out by law; extra company leave depends on policy.
- SIL encashment is separate from 13th-month pay and from separation pay in your final pay — total each line individually.
- Daily-paid or piece-rate workers use their actual established daily wage instead of the ÷30 method.
- Whether you can encash a pro-rated portion in your exit year depends on how your employer accrues SIL — use the credited balance on your leave record.
- Managerial staff and field personnel sit outside the SIL mandate; their leave is policy-based.
- Check your figure on the PH Leave Encashment (SIL) Calculator and see the Philippines hub.
Frequently asked questions
How do I compute SIL encashment in the Philippines?
Daily rate × unused SIL days. The daily rate is monthly pay ÷ 30. For PHP 20,000/month with 5 unused days: 667 × 5 = PHP 3,333.
How much is 5 days of SIL worth on PHP 20,000?
PHP 3,333 — that is a PHP 667 daily rate (20,000 ÷ 30) multiplied by 5 unused days.
What daily rate is used for SIL encashment?
Monthly pay ÷ 30 for monthly-paid employees. Daily-paid or piece-rate workers use their actual established daily wage.
Is company vacation leave encashed the same way?
Only the 5-day statutory SIL must be encashed by law. If your employer grants extra vacation or sick leave, whether it is encashable — and at what rate — depends on company policy, not the Labor Code.
Is SIL part of separation pay?
No. SIL encashment is a separate item in your final pay, calculated as daily rate × unused SIL days. Separation pay uses its own month-based formula.