Hire employees and contractors in the Philippines

Remote’s guide to employing in the Philippines.

  • Capital city

    Manila

  • Currency

    Philippine peso
    (, PHP)

  • Population size

    106,651,394
    (est. 2020)

  • Languages spoken

    Filipino, English

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.

  • Capital city

    Manila

  • Currency

    Philippine peso
    (, PHP)

  • Languages spoken

    Filipino, English

  • Population size

    106,651,394 (est. 2020)

  • Ease of doing business

    Easy

  • Cost of living index

    40.65 (89 of 139 nations)

  • Payroll frequency

    Bi-Monthly

  • VAT - standard rate

    5% on goods, 6% on services

  • GDP - real growth rate

    6.0% (2019)

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.

Risks
of misclassification

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

Public holidays

Date
Holiday Name
Extra information
Saturday, January 1, 2022New Year's Day
Tuesday, February 1, 2022Chinese New YearSpecial Holiday
Friday, February 25, 2022EDSA People Power Revolution AnniversarySpecial Holiday
Saturday, April 9, 2022The Day of Valor
Thursday, April 14, 2022Maundy Thursday
Friday, April 15, 2022Good Friday
Saturday, April 16, 2022Black SaturdaySpecial Holiday
Sunday, May 1, 2022Labor Day
Tuesday, May 3, 2022Eid'l Fitr (Feast of Ramadhan)
Sunday, June 12, 2022Independence Day
Sunday, July 10, 2022Eid-al Adha
Sunday, August 21, 2022Ninoy Aquino DaySpecial Holiday
Monday, August 29, 2022National Heroes Day
Tuesday, November 1, 2022All Saints' DaySpecial Holiday
Wednesday, November 2, 2022All Souls' DaySpecial Holiday
Wednesday, November 30, 2022Bonifacio Day
Thursday, December 8, 2022Feast of the Immaculate Conception of MarySpecial Holiday
Saturday, December 24, 2022Additional Special DaySpecial Holiday
Sunday, December 25, 2022Christmas Day
Friday, December 30, 2022Rizal Day
Saturday, December 31, 2022Last Day of the YearSpecial Holiday

Minimum Wage

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.

Payroll Cycle

For customers of Remote, all employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.

All employers are also required to pay their "rank-and-file employees" a 13th month payment. All employees not considered managerial employees are considered rank-and-file employees.

The 13th month payment is required regardless of the nature of the worker's employment (with few exceptions) provided they worked for at least one month during the calendar year.

The 13th month pay shall not be less than 1/12 of the total basic salary earned by an employee in a calendar year and should be given to the employees no later than December 24.

Onboarding Time

We can help you get a new employee started in the Philippines fast. The minimum onboarding time we need is only 11 working days.

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.

  • Medical insurance plan
  • Dental insurance plan
  • Vision insurance plan
  • Additional paid holidays
  • Flexible work schedule
  • Pension scheme
  • Life insurance
  • Other insurance

Taxes in the Philippines

Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in the Philippines.

  • Employer

    • 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

Holiday leave

Full time employees are paid for public holidays.

Service Incentive leave

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.

Maternity leave

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.

Paternity leave

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 leave

Certified solo parents are entitled to up to seven days leave for parental activities.

Leave for Victims of VAWC

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 for women

Eligible employees can take up to two months leave following surgery for gynecological issues.

Employment termination

Termination process

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.

Notice period

Employers must give one month notice for most authorized reasons.

Severance pay

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.

Probation periods

Probationary periods of up to six months are allowed in the Philippines.

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