Which leaves are convertible to cash?

Only leaves with a convertible-to-cash policy are eligible for monetization. The statutory 5-day Service Incentive Leave (SIL) under Art. 95 of the Labor Code is convertible to cash if unused at year-end. Company-granted vacation and sick leaves are convertible only if the employer's policy or CBA expressly allows it.

How is the daily rate computed for leave monetization?

The daily rate is derived by dividing the monthly salary by the applicable divisor. Common divisors are 313 (for employees with a 6-day work week including holidays), 303 (6-day work week excluding holidays), or 261 (5-day work week). The divisor depends on the company's compensation policy.

Is leave monetization taxable?

Yes. Leave monetization is generally subject to withholding tax as part of the employee's compensation income. However, for rank-and-file employees, the monetized value of unused vacation leave credits of 10 days or less is tax-exempt under certain conditions per BIR Revenue Regulation No. 2-98.

What is the Service Incentive Leave (SIL) under Art. 95?

Under Article 95 of the Labor Code, every employee who has rendered at least one year of service is entitled to a yearly 5-day Service Incentive Leave (SIL) with pay. Unused SIL is commutable to its money equivalent at the end of the year. Employees already enjoying at least 5 vacation leave days are exempt from this provision.

Leave Monetization Calculator

Compute the cash value of unused convertible leave days. Enter your monthly salary or daily rate and the number of unused leave days to monetize.

Input Mode

Monthly Salary

₱

Divisor

313 — 6-day week, with holidays303 — 6-day week, without holidays261 — 5-day week

Daily rate = (Monthly salary x 12) / Divisor. The divisor reflects total paid days in a year.

Unused Convertible Leave Days

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Common Divisors for Daily Rate Computation

The divisor determines how the monthly salary is converted to a daily rate. It represents the total number of paid days in a year based on the employee's work schedule.

Divisor	Work Schedule	Formula	Example (₱25,000/mo)
313	6 days/week, with regular holidays	365 days - 52 Sundays = 313	₱958.47/day
303	6 days/week, without holidays	365 - 52 Sundays - 10 holidays = 303	₱990.10/day
261	5 days/week (Mon-Fri)	365 - 52 Saturdays - 52 Sundays = 261	₱1,149.43/day

Frequently Asked Questions

Which leaves are convertible to cash?: Only leaves with a convertible-to-cash policy are eligible for monetization. The statutory 5-day Service Incentive Leave (SIL) under Art. 95 of the Labor Code is convertible to cash if unused at year-end. Company-granted vacation and sick leaves are convertible only if the employer's policy or CBA expressly allows it.
How is the daily rate computed for leave monetization?: The daily rate is derived by dividing the monthly salary by the applicable divisor. Common divisors are 313 (for employees with a 6-day work week including holidays), 303 (6-day work week excluding holidays), or 261 (5-day work week). The divisor depends on the company's compensation policy.
Is leave monetization taxable?: Yes. Leave monetization is generally subject to withholding tax as part of the employee's compensation income. However, for rank-and-file employees, the monetized value of unused vacation leave credits of 10 days or less is tax-exempt under certain conditions per BIR Revenue Regulation No. 2-98.
What is the Service Incentive Leave (SIL) under Art. 95?: Under Article 95 of the Labor Code, every employee who has rendered at least one year of service is entitled to a yearly 5-day Service Incentive Leave (SIL) with pay. Unused SIL is commutable to its money equivalent at the end of the year. Employees already enjoying at least 5 vacation leave days are exempt from this provision.

Read our full guide: Employee Leave Entitlements Guide →