Philippines

Available

Capital
Manila
Currency
Philippine Peso
Language
Filipino
Population
113,880,328
GDP Growth
5.60%
GDP World Share
0.43%
Payroll Frequency
Semi-Monthly
Working Hours
48
hours/week

See how hiring works in Philippines

Learn about local payroll, taxes, and employment laws in Philippines

Minimum Wage Standards

The minimum wage in the Philippines varies by region. In the National Capital Region (NCR), the minimum daily wage is PHP 610. Other regions have lower rates set by their respective Regional Tripartite Wages and Productivity Boards.

The Philippines uses a regionalized wage-setting system, meaning there is no single national minimum wage. Employers must comply with the rate applicable to their region and industry sector.

Income Tax Structure

The individual income tax ranges from 0% to 35%. Income tax is calculated according to progressive rates under the TRAIN Law (Tax Reform for Acceleration and Inclusion). Annual taxable income up to PHP 250,000 is exempt from income tax.

Annual Taxable Income Personal Income Tax Rate
Up to PHP 250,000 0%
PHP 250,001 - 400,000 15%
PHP 400,001 - 800,000 20%
PHP 800,001 - 2,000,000 25%
PHP 2,000,001 - 8,000,000 30%
Over PHP 8,000,000 35%

Employer Contributions

Employers in the Philippines are required to contribute to three mandatory social benefit programs: SSS, PhilHealth, and Pag-IBIG.

Mandatory Employer Contributions:

  • Social Security System (SSS): ~9.5% of monthly salary credit
  • PhilHealth (National Health Insurance): 5% of basic salary (shared equally)
  • Pag-IBIG (Home Development Mutual Fund): 2% of monthly compensation

Employee Contributions:

  • Social Security System (SSS): ~4.5% of monthly salary credit
  • PhilHealth: 5% of basic salary (shared equally)
  • Pag-IBIG: 2% of monthly compensation (maximum PHP 200)

Important Note: These figures are estimates for informational purposes. Actual costs vary based on employment terms and specific circumstances. SSS contributions follow a schedule of salary credits with corresponding contribution amounts. Contact our team for accurate calculations tailored to your situation.

Overtime & Working Hours

Overtime work is compensated at 125% of the regular hourly rate on ordinary working days. Work performed on a rest day or special holiday is paid at 130% of the regular rate, with additional premiums for overtime on those days.

Standard working hours: 8 hours per day, 48 hours per week. The standard workweek runs Monday through Saturday. Night shift differential of 10% applies to work performed between 10:00 PM and 6:00 AM.

Maternity Leave

Female employees are entitled to 105 days of paid maternity leave for live childbirth, with an option to extend for an additional 30 days without pay. For miscarriage or emergency termination of pregnancy, the entitlement is 60 days of paid leave.

Under the Expanded Maternity Leave Law (Republic Act No. 11210), maternity benefits are paid by the SSS. Solo parents receive an additional 15 days of paid maternity leave, for a total of 120 days.

Paternity Leave

Under the Paternity Leave Act (Republic Act No. 8187), married male employees are entitled to 7 days of paid paternity leave for the first four deliveries of the legitimate spouse.

Additionally, female employees may allocate up to 7 days of their maternity leave credits to the child's father, whether or not they are married.

Solo Parent Leave

Under the Solo Parents' Welfare Act (Republic Act No. 8972), solo parents who have rendered at least one year of service are entitled to 7 additional working days of parental leave per year, with full pay.

Sick Leave

There is no statutory requirement for employers to provide paid sick leave in the Philippines. However, employees who are unable to work due to illness or injury may avail of the SSS Sickness Benefit, which provides daily cash allowance for the number of days unable to work.

Many employers provide sick leave as part of their company policy or collective bargaining agreements. The 5-day Service Incentive Leave can also be used for sick leave purposes.

Bereavement Leave

There is no general statutory bereavement leave in the Philippines. However, under the Anti-Violence Against Women and Their Children Act (VAWC), victims are entitled to up to 10 days of paid leave.

  • Bereavement leave of 3 days is commonly provided through company policy or CBA
  • Some employers offer additional compassionate leave depending on the relationship to the deceased

Termination Framework

There is no at-will termination in the Philippines. Employers must have either a just cause or an authorized cause to terminate employment, as defined in the Labor Code of the Philippines.

Just causes for termination include:

  • Serious misconduct or willful disobedience
  • Gross and habitual neglect of duties
  • Fraud or willful breach of trust
  • Commission of a crime against the employer or immediate family
  • Other analogous causes

Authorized causes for termination include:

  • Installation of labor-saving devices
  • Redundancy
  • Retrenchment to prevent losses
  • Closure or cessation of business
  • Disease that is prejudicial to the employee's health or co-workers

Legal Requirement: For just cause terminations, the employer must follow the two-notice rule: a first notice specifying the grounds for termination and giving the employee an opportunity to explain, followed by a second notice communicating the decision to terminate. For authorized cause, a 30-day written notice must be served to both the employee and the DOLE.

Notice Period Requirements

For authorized cause terminations, the employer must provide a written notice at least 30 days before the effective date of termination to both the employee and the Department of Labor and Employment (DOLE).

  • Authorized cause: 30 days written notice required
  • Just cause: No minimum notice period, but the two-notice rule must be followed
  • Employee resignation: 30 days advance written notice

Severance Compensation

Severance pay (separation pay) is required only for authorized cause terminations. The amount depends on the specific authorized cause:

  • Redundancy, installation of labor-saving devices, or retrenchment: 1 month pay per year of service, or 1 month pay, whichever is higher
  • Closure not due to serious losses: 1 month pay per year of service or half-month pay per year of service, depending on the cause
  • Disease: 1 month pay per year of service or half-month pay per year of service, whichever is greater

Employees terminated for just cause are not entitled to separation pay. Upon termination, employees must receive any unpaid wages, pro-rated 13th month pay, and cash conversion of unused service incentive leave.

Risk Management: To minimize unforeseen financial exposure from terminations, our employer of record service includes a Severance Reserve for all employment agreements. Unused reserve amounts are returned to you if employees resign or are not entitled to severance.

Service Incentive Leave

Employees who have rendered at least one year of service are entitled to a minimum of 5 days of Service Incentive Leave (SIL) per year with full pay.

This leave can be used for vacation or sick leave purposes. Unused SIL is commutable to its monetary equivalent at the end of the year. Some employers offer more generous leave entitlements through company policy or collective bargaining agreements.

Public Holidays

The Philippines observes 18 or more regular and special non-working holidays annually, as declared by the President through a proclamation.

Regular holidays include:

  • New Year's Day (January 1)
  • Araw ng Kagitingan / Day of Valor (April 9)
  • Maundy Thursday (varies)
  • Good Friday (varies)
  • Labor Day (May 1)
  • Independence Day (June 12)
  • National Heroes Day (last Monday of August)
  • Bonifacio Day (November 30)
  • Christmas Day (December 25)
  • Rizal Day (December 30)
  • Eid al-Fitr (varies)
  • Eid al-Adha (varies)

Special non-working holidays include:

  • EDSA People Power Revolution Anniversary (February 25)
  • Black Saturday (varies)
  • Ninoy Aquino Day (August 21)
  • All Saints' Day (November 1)
  • Feast of the Immaculate Conception (December 8)
  • Last Day of the Year (December 31)

Onboarding Timeline

The onboarding process is typically completed within 2-5 business days following client execution of the Statement of Work.

Compensation Structure

Salaries in the Philippines are typically paid on a semi-monthly basis (twice a month), although some employers opt for monthly payroll cycles. Pay periods commonly fall on the 15th and end of each month.

The 13th month pay is mandatory in the Philippines under Presidential Decree No. 851. All rank-and-file employees who have worked for at least one month during a calendar year are entitled to receive their 13th month pay on or before December 24 of each year. It is calculated as one-twelfth (1/12) of the total basic salary earned within the year.

Employment Contract Specifications

Employment contracts in the Philippines can be either fixed-term or regular (indefinite). While written contracts are not strictly required by law, they are strongly recommended to clearly define the terms and conditions of employment.

Essential contract elements include:

  • Employee and employer identification
  • Commencement date
  • Job title and description
  • Compensation and benefits
  • Working hours and schedule
  • Duration (for fixed-term contracts)
  • Termination provisions

Contracts may be written in English or Filipino. Fixed-term contracts must have a valid reason for the fixed duration; otherwise, the employee may be deemed a regular employee.

Probationary Period

The probationary period in the Philippines is a maximum of 6 months, unless covered by an apprenticeship agreement stipulating a longer period. The employer must inform the probationary employee of the reasonable standards for regularization at the time of engagement.

If the employee is not terminated or informed of non-regularization on or before the end of the 6-month probationary period, the employee is deemed a regular employee. Termination during probation must be for just cause or failure to meet the reasonable standards communicated at the start of employment.

How it works

Your Global Hiring Process

We take care of employing your team, so you can focus on growing

You choose the talent

You select the candidate you want to hire, anywhere in the world.

We employ them for you

MB Remote becomes the legal employer and handles contracts, payroll, and local labor laws.

Your team starts working

Your employee works directly with you, just like an in-house team member.

We manage compliance

We ensure ongoing payroll, taxes, and legal compliance in the employee’s country.

Frequently Asked Questions

Is it free to contact MB Remote?

Yes. Contacting us is completely free and without obligation. We’ll discuss your needs and explain how our EOR solution works before anything else.

Hiring can usually be completed within a few days, depending on the country and local requirements.

An Employer of Record is a legal entity that employs workers on your behalf. MB Remote handles contracts, payroll, taxes, and local labor law compliance, while you manage the day-to-day work.

MB Remote is the legal employer, but the employee works exclusively for you as part of your team.

We support hiring in multiple countries. Contact us to check availability for a specific location.

We manage payroll, taxes, and social contributions in compliance with local regulations. You receive one simple monthly invoice.

Yes. You manage tasks, schedules, and performance. We handle the legal and administrative side.