Service Incentive Leave Computation Sample for 2019
Service Incentive Leave or SIL is a right which accrues to every employee who has served “within 12 months, whether continuous or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contracts, is less than 12 months, in which case said period shall be considered as one year. (See page 240, Guide on Employee Compensation and Benefits Volume 1, 2nd Edition, citing Section 3, Rule V, Book III, Implementing Rules and Regulations of the Labor Code.)
It is also “commutable to its money equivalent if not used or exhausted at the end of the year.” In other words, an employee who has served for one year is entitled to it. He may use it as leave days or he may collect its monetary value.
Thus, several scenarios granting SIL may be involved in the workplace:
- SIL of existing employee
- SIL of resigning or separating employee
- SIL of Retiring employee
SIL of existing Employee
SIL requires a minimum service of one (1) year for an employee to be entitled to it.
For instance, the employee Esayel Kudami was hired on January 1, 2018. On June 1, 2018 he is not yet entitled to SIL considering he is just five (5) months in service.
On January 1, 2019 he is entitled to SIL of five (5) days. The accrual or earning of SIL is .41666667 or .42 per month. This is derived by dividing the five days be 12 months. The divisor is 12 months because the five days is the benefit earned for the year; thus, to get the monthly proportion the five days has to be divided by 12.
SIL of resigning Employee
Assuming that Esayel resigns on March 1, 2019 and he has not commuted or used his SIL, said benefit shall be computed, as follows:
SIL earned as of 31 December 2018 5 days
Proportionate SIL for January and February 2019
(2/12) x 5 days 0.833 day
Total accrued SIL as of 1 March 2019 5.833 days
SIL of retiring Employee
The minimum retirement pay shall be equivalent to one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one (1) whole year.
For the purpose of computing retirement pay, “one-half month salary” shall include all of the following:
- Fifteen (15) days salary based on the latest salary rate;
- Cash equivalent of five (5) days of service incentive leave;
- One twelfth (1/12) of the thirteenth-month pay.
(1/12 x 365/12 = .083 x 30.41 = 2.5)
Thus, “one-half month salary” is equivalent to 22.5 days as held in the case of Capitol Wireless, Inc. vs. Honorable Secretary Ma. Nieves R. Confesor, G. R. No. 117174, November 13, 1996.
The formula used is Minimum Retirement Pay = Daily Rate x 22.5 days x number of years in service
It bears noting that the COLA shall not be included in the computation of retirement pay.
Assuming that Esayel with a daily rate of P537.00 retires on March 1, 2019 upon reaching age of 60 with ten years of service. His retirement benefit should include the SIL and it shall be computed, as follows:
Minimum Retirement Pay = Daily Rate x 22.5 days x number of years in service
= PhP537 per day x 22.5 days x 10 years
= PhP12,082.5 x 10 years
= PhP120,825.00
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