Service incentive leave; conversion to cash

Every employee who has rendered at least one (1) year of service is entitled to Service Incentive Leave (SIL) of five (5) days with pay. (Article 95 of the Labor Code of the Philippines)

The service incentive leave may be used for sick and vacation leave purposes. The unused service incentive leave is commutable to its money equivalent at the end of the year. In computing, the basis shall be the salary rate at the date of conversion. The use and conversion of this benefit may be on a pro rata basis.

The phrase "one year of service" of the employee means service within twelve (12) months, whether continuous or broken, reckoned from the date the employee started working. The period includes authorized absences, unworked weekly rest days, and paid regular holidays. If through individual or collective agreement, company practice or policy, the period of the working days is less than twelve (12) months, said period shall be considered as one year for the purpose of determining the entitlement to the service incentive leave. (Pages 26-27 of the 2019 Edition of Handbook on Workers Statutory Monetary Benefits. Bureau of Working Conditions.