Scribd Logo
Upload

Welcome to Scribd!

  • Sil Separation Pay

    Uploaded by

    Nielle Bautista
    26 views12 pages
    Employees are entitled to 5 days of service incentive leave per year of service which can be converted to cash at the end of the year based on their daily salary rate. Separation pay is given to employees terminated due to authorized causes like redundancy, retrenchment, or business closure. The separation pay formula for redundancy is one month's salary times years of service, while the formula for other authorized causes is one month's salary divided by two times years of service. Examples are provided to demonstrate how to calculate separation pay amounts for employees terminated in different scenarios.

    Original Description:

    Original Title

    SIL-SEPARATION-PAY (1)

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Employees are entitled to 5 days of service incentive leave per year of service which can be converted to cash at the end of the year based on their daily salary rate. Separation pay is given to employees terminated due to authorized causes like redundancy, retrenchment, or business closure. The separation pay formula for redundancy is one month's salary times years of service, while the formula for other authorized causes is one month's salary divided by two times years of service. Examples are provided to demonstrate how to calculate separation pay amounts for employees terminated in different scenarios.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    26 views12 pages

    Sil Separation Pay

    Uploaded by

    Nielle Bautista
    Employees are entitled to 5 days of service incentive leave per year of service which can be converted to cash at the end of the year based on their daily salary rate. Separation pay is given to employees terminated due to authorized causes like redundancy, retrenchment, or business closure. The separation pay formula for redundancy is one month's salary times years of service, while the formula for other authorized causes is one month's salary divided by two times years of service. Examples are provided to demonstrate how to calculate separation pay amounts for employees terminated in different scenarios.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 12

    5.1.

    6 SERVICE INCENTIVE
    LEAVE AND SEPARATION
    PAY
    SERVICE INCENTIVE LEAVE
    Article 95 of Presidential Decree No. 442 or the Labor
    Code of the Philippines, every employee who has
    rendered at least one year of service is entitled to a
    yearly incentive leave of five (5) days with pay.
    COMPUTATION OF SERVICE INCENTIVE LEAVE
    CREDIT AND CASH CONVERSION
    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.

    Cash Conversion
    Formula: Daily Pay x No. of Unused Days
    EXAMPLE:
    Jon is a minimum wage earner who To compute his cash conversion
    lives in Rizal City but is currently
    working at NCR, specifically in Quezon Daily Pay x No. of Days
    City, which pays him at his daily rate.
    He was officially hired last January 1, PHP 610 x 5
    2019. On January 1, 2020, he is entitled
    to 5 days of SIL as of December 31,
    = 3,050
    2020, he did not consume any of his SIL.
    Thus, 5 of his SIL will be convertible to
    cash. How much would it be?
    EXAMPLE: The formula is as follows:

    Alice is a monthly paid Daily Pay = (Monthly Salary x 12) / 365


    employee with a salary of
    PhP20,000.00 per month. She (PhP20,000.00 x 12) / 365
    was hired January 1, 2017. On PhP240,000.00 / 365
    January 1, 2018 she was already = PhP 657.53
    entitled to 5 day SIL. As of
    Going back to the cash conversion due to
    December 31, 2018 she
    Alice:
    consumed only three (3) SIL.

    Thus, only two (2) days shall be Cash Conversion = Daily Pay x No. of Days
    converted to cash. To compute
    for the conversion: PhP657.53 x 2 days
    = PhP 1,315.06
    SEPERATION PAY
    The amount given to an employee who has been terminated
    from service for authorized causes wherein the employees
    are not at fault since their employment was ended due to
    business reasons.
    Authorized causes for termination under the Labor Code:
    Installation of labor-saving devices
    Redundancy
    Retrenchment to prevent losses
    Closing or cessation of operation of the establishment
    Health risks
    SEPERATION PAY
    Terminated due to just causes:
    Neglection of duties
    Willful disobedience
    Serious misconduct
    If the employee has committed fraud or a willful breach of
    the trust given to him or her by a duly authorized
    representative
    Commission of crime against the employer
    Commission of crime against any duly authorized personnel
    TERMINATION DUE TO REDUNDANCY OR THE INSTALLMENT OF THE
    LABOR-SAVING DEVICES
    Formula:
    One Month Salary × Years Served = Seperation Pay

    TERMINATION DUE TO RETRENCHMENT, CLOSURE OF BUSINESS


    OPERATION OR HEALTH RISK:
    Formula:
    (One Month Salary ÷ 2) × Years Served = Seperation Pay
    EXAMPLE:
    Martie was recently laid-off due to redundancy. She
    rendered 10 years of service in the company and
    received a monthly salary of Php 40,000.00. How much
    will she receive at the time of her termination?

    Formula:
    One Month Salary × Years Served = Seperation Pay

    Monthly Salary = 40,000 40,000 × 10 = 400,000


    Years Served = 10
    EXAMPLE:
    Tonya was terminated due to the installment of a
    labor-saving device. She was only employed by the
    company for 8 months and received a salary of Php
    50,000.00. How much will she receive at the time of her
    termination?
    Formula:
    One Month Salary × Years Served = Seperation Pay

    Monthly Salary = 50,000 50,000 × 1 = 50,000


    Years Served = 1
    EXAMPLE:
    Lesley has been working for five years now and she
    receives a salary of Php 60,000.00 per month. She was
    terminated due to retrenchment. How much will her
    separation pay be?
    Formula:
    (One Month Salary ÷ 2) × Years Served = Seperation Pay

    Monthly Salary = 60,000 60,000 ÷ 2 = 30,000


    Years Served = 5 30,000 × 5 = 150,000
    THANK YOU
    VERY MUCH

    You might also like