and contractors in The Philippines
Remote’s guide to employing in the Philippines
Facts & stats
The Philippines is a southeast Asian nation composed of over 7,000 islands. It is located between the South China Sea and the Pacific Ocean. With 108 million residents, it’s the thirteenth most populous country on Earth. As an archipelago, the Philippines is home to beautiful beaches and a wide variety of flora and fauna.
The economy has a strong agricultural presence, but other sectors are growing. The Philippines is one of the leading suppliers of nurses worldwide. A very low cost of living makes the Philippines very attractive for workers.
Grow your team in the Philippines with Remote
To employ in the Philippines, companies must own a local legal entity in the country or work with a global employment solution. Managing payroll, benefits, taxes, and compliance in the Philippines can get complicated, especially without established local relationships.
Remote has a fully-owned legal entity in the Philippines. This makes it easy for your company to employ workers in the Philippines quickly and in full compliance with all applicable labor laws. We take on the responsibility and legal risks of international employment so you can focus on growing your business.
The Philippines, like many other countries, treats self-employed individuals or contractors and full-time workers differently and there are risks associated with misclassification. Employers who misclassify workers and thereby fail to pay relevant taxes and contributions are subject to back pay and additional penalties.
Employing in the Philippines
Holidays in the Philippines are classified as Regular & Special (Non-Working Holidays). In case of a Regular Holiday, employees are entitled to 100% of their regular wage even if they did not work on the regular holiday. This is contingent on the employee being present (or on an approved leave of absence) with pay on the immediately preceding work day.
|Date||Holiday Name||Extra information|
|New Year’s Day|
|Araw ng Kagitingan|
|Eid al-Fitr (Feast of Ramadhan)|
|National Heroes' Day|
In case of a Special Holiday, if the employee did not work on a special holiday, they are not entitled to receive any pay.
|Chinese New Year|
|EDSA People Power Revolution|
|Ninoy Aquino Day|
|All Saints' Day|
|Feast of the Immaculate Conception of Mary|
Minimum wage in the Philippines varies by region and ranges from PHP 282 to 537.
The work day is a maximum of eight hours. Employees working at night are paid a 10% differential.
Employees working overtime are paid a 25% differential.
Employees working on holidays are paid a 30% differential.
- For customers of Remote, all employee payments will be made in equal monthly instalments on or before the last working day of each calendar month, payable in arrears.
We can help you get a new employee started in the Philippines fast. The minimum onboarding time we need is only one week.
Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Remote platform. The onboarding timeline is also dependent upon registration with local authorities.
For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.
Please note, payroll cut-off dates can impact the actual first day of employment. Remote has a payroll cut-off date of the 10th of the month unless otherwise specified.
Competitive benefits package in the Philippines
Besides providing your employees with all statutory benefits in the Philippines, Remote can advise on and arrange for custom benefits and perks for your employees upon request.
Taxes in the Philippines
Learn how employment taxes affect your payroll and your employees’ paychecks in the Philippines.
- Social Security: a monthly SSS (Social Security System) payment at the contribution rate of 8.5% of the employee salary is required
- Mandatory Provident Fund: All employees covered by the SSS with earnings above PHP 20,000 per month are automatically enrolled in the MPF. Contributions are calculated at the same rate as the SSS. The employer’s contributions will range from PHP 42.50 up to PHP 425 per month
- Home Development Mutual Fund: 2% MSC employer contribution
- PhilHealth: 3.5% split equally between employee and employer
- 12% - Sales Tax (VAT)
Employee income tax
- Progressive System
- Under 250000 - 0%
- 25000 but not over 400000 - 20% of the excess over 250000
- 400000 but not over 800000 - 25% of the excess over 400000 + 30000
- 800000 but not over 2000000 - 30% of the excess over 800000 + 130000
- 2000000 but not over 8000000 - 32% of the excess over 2000000 + 490000
- Over 8000000 - 35% of the excess over 8000000 + 2410000
- Social Security: a 4.5% deduction is taken from the employee’s monthly salary payment as an SSS contribution
- Mandatory Provident Fund: This payment is applicable to contributions starting at an MSC (monthly salary credit) above PHP 20,000 with a maximum employer share of PHP 425. Employees contribute between PHP 22.50 and PHP 225 per month
- Home Development Mutual Fund: 1% contribution for employees with a monthly salary below PHP 1500, and 2% above PHP 1500
- PhilHealth: 3.5% split equally between employee and employer
Types of leave
Full time employees are paid for public holidays.
- Service Incentive
There is no statutory sick leave or vacation leave. However, after one year of service, eligible employees are entitled to five days paid leave for reasons of their choosing.
Paid leave of up to 105 days is available to women who have made at least 3 contributions to SSS (Social Security System) in the 12 months before the birth. The employer must be notified. Single mothers are eligible for an additional 15 days paid leave. An additional 30 days unpaid leave may be requested.
Eligible women are entitled to 60 days leave following a miscarriage or emergency termination.
Fathers are entitled to up to seven days paid leave. There is no governmental leave provision for same-sex parents, however leading employers including Nestle and Unilever are starting to develop their own supplemental leave policies to offer this support to their employees.
- Solo Parent
Certified solo parents are entitled to up to seven days leave for parental activities.
- Leave for Victims
Victims of Violence Against Women and Children (VAWC) are entitled to 10 days leave for medical treatment and legal obligations. The employee must provide certification.
- Special leave
Eligible employees can take up to two months leave following surgery for gynecological issues.
Employees may be terminated for justified causes or for authorized causes. According to the law, just causes include serious misconduct, willful disobedience, gross and habitual neglect of duties, fraud, willful breach of trust, commission of a crime, and other analogous causes. Employers must give employees written notice of termination. Employees must then have the opportunity to appeal the decision at a hearing. The employer will then render a final decision on termination. Authorized causes include illness, installation of labor-saving devices, redundancy, and other economic reasons.
Workers who are pregnant or on maternity leave cannot be terminated.
Employers must give one month notice for most authorized reasons.
Severance pay is not required for termination for a just cause. For authorized causes, severance pay of one months pay or one half month’s pay for every year of service, whichever is greater.
Probationary periods of up to six months are allowed.