<p>Structural health monitoring (SHM) of geotechnical systems provides engineers with critical insights into the evolving performance and physical integrity of these systems over time. Access to such information is vital for mitigating the risk of structural failures, particularly under dynamic loading conditions such as earthquakes. This study utilizes the finite element software Abaqus to examine the seismic health monitoring of a single pile embedded in a two-layered sandy soil profile. The pile is initially modeled as undamaged, and any yielding observed in the pile cross-section during seismic excitation is interpreted as an indication of structural damage. A plastic strain of 0.01% is adopted as the proportional limit, serving as a pre-yield warning threshold, while a plastic strain of 0.2% is defined as the onset of yielding, signaling a critical damage state. The numerical results reveal that the application of the continuous wavelet transform (CWT) to the pile’s horizontal acceleration response enables the effective identification of plastic strain development within the pile section. The health monitoring framework in this study is structured around three key components: damage detection, damage localization, and damage severity quantification. Ground-level accelerometer data were found to be sufficient for identifying damage occurrence. Accurate damage localization was achieved using a wavelet-based damage index. In addition, probabilistic methods were employed to assess damage severity, with the normal distribution function used as a representative probabilistic model.</p>