Sick leave

In the Philippines, sick leave does not exist as a standalone statutory entitlement. Instead, Philippine labor law provides Service Incentive Leave (SIL), which grants employees a minimum of five days of paid leave annually after completing one year of service. This leave may be used for any purpose, including illness, and serves as the primary statutory leave benefit under the Labor Code of the Philippines.

Service Incentive Leave is governed by the Labor Code of the Philippines and applies to all private sector employees who have worked for at least one year with their employer. The five-day annual entitlement accrues after the completion of each service year and is separate from other leave types such as vacation leave or maternity leave. Employees who are separated from service before using their SIL are entitled to cash compensation equivalent to their daily wage multiplied by the number of unused days.

While SIL is the primary statutory leave mechanism, employers may offer additional sick leave benefits through company policies or collective bargaining agreements, which would exceed the legal minimum. However, such provisions are voluntary and not mandated by statute.

Effective January 6, 2026, the Philippines increased tax-free de minimis benefit limits, which may affect how certain leave-related allowances are treated for tax purposes. Payroll teams must ensure compliance with the five-day SIL requirement after one year of employment and maintain accurate records of accrual and usage. Employers should clarify in employment contracts whether additional sick leave is provided beyond the statutory SIL entitlement and ensure proper documentation of leave taken and compensation paid upon separation.