Leave by country / Philippines
Philippines annual leave entitlement
How much paid leave people in Philippines get, what happens to unused days, and what you owe when someone leaves — in plain English, whether you run a team there or work on one.
The Philippines guarantees five days of paid Service Incentive Leave a year to employees with at least one year of service under Article 95 of the Labor Code — the lowest statutory floor among the countries we cover, though most employers grant 10 to 15 vacation days by policy. Unused Service Incentive Leave is converted to cash at year end and any balance is paid when employment ends.
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What the law actually says
The Labor Code’s only general paid-leave guarantee is the Service Incentive Leave: five days a year with pay for every employee who has completed at least one year of service, usable for vacation or sickness. Employers already granting at least five days of paid vacation are exempt, as are establishments regularly employing fewer than ten workers, field personnel and managerial staff. Separate statutes provide paid maternity, paternity, solo-parent and other special leave, and most formal-sector employers grant 10 to 15 days of vacation leave by policy.
Worth knowing: Unused Service Incentive Leave does not lapse: the Department of Labor and Employment’s implementing rules require it to be converted to its cash equivalent at the end of the year, and any balance is paid on separation. Because the statutory floor is so low, the practical entitlement is almost always set by the contract or company policy.
What happens to unused leave in Philippines
Service Incentive Leave that is not used by the end of the year is commutable to cash at the employee’s salary rate rather than lost, under the implementing rules of the Labor Code. Any unused balance is likewise paid when employment ends. Vacation leave granted above the five-day floor follows the employer’s policy, which decides whether it carries over or is paid.
When employment ends, the untaken balance must be paid. This is the rule across the European Union and Australia, and it is the sharpest contrast with the United States, where whether unused time is paid out depends entirely on which state the employee works in.
If you run a team in Philippines
- Write the entitlement into every contract. At least 5 days; more is fine, less is void. Collective agreements may add to it.
- Track accrual and carryover to the day, with a record of every approval. When someone leaves, the untaken balance is money you owe, and you will need to show how you got to the number.
- Budget for the payout. Every unused day on the books is a liability at that person's current pay rate — it does not disappear at year end.
If you work in Philippines
- Check your contract gives at least 5 days. Anything less is unenforceable.
- Keep your own record of approved leave. Payroll systems get changed; your notes don't.
- When you leave, untaken statutory leave must be paid out. It cannot be forfeited.
Calculating an employee's balance
Entitlement is the starting point; the working number is what an individual has actually accrued at a given date. Our accrual calculator converts an annual entitlement into a per-pay-period figure and a current balance.
Tracking Philippines leave correctly
Because untaken leave is money the employer owes, the balance has to be provable. Spreadsheets fail at exactly the moment they matter — when someone disputes what they were owed on their last day and nobody can reconstruct the record.
For a single-country team, Leavo handles Philippines accrual rules, carryover and approvals with a full audit trail. If you employ people in more than one country, statutory entitlements, carryover rules and payout obligations differ in every one — that is the case for a platform like Deel that handles multi-country employment rather than leave alone. We compare the options in our leave management software guide.
Philippines annual leave: common questions
How many paid annual leave days are employees entitled to in Philippines?
5 working days is the statutory minimum in Philippines, equivalent to 1 weeks on a five-day working week, under Labor Code (Presidential Decree No. 442), Article 95 — Service Incentive Leave. Employers and collective agreements may grant more, never less.
Must unused annual leave be paid out when employment ends in Philippines?
Yes. Payment in lieu of untaken statutory leave is required when the employment relationship ends in Philippines. During employment, cash-out is limited: unused days are converted to cash at the end of the year.
Can an employer in Philippines refuse a leave request?
An employer can usually influence when leave is taken for operational reasons, but cannot deny the entitlement itself. The right to the minimum number of days is statutory and cannot be contracted away.
Do public holidays count towards the 5-day entitlement in Philippines?
No. Public holidays are separate from the 5-day statutory annual leave entitlement in Philippines.
Source
Primary source: Labor Code (Presidential Decree No. 442), Article 95 — Service Incentive Leave. Statutory minimums change, and collective agreements frequently exceed them — confirm against the current text before acting. See our methodology.