Hire employees and contractors in The Philippines
Outstaffer’s guide to employing in 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.
- Capital city
- Manila
- Currency
- Philippine peso (₱, PHP)
- Official Languages
- 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
- Monthly
- VAT - standard rate
- 5% on goods, 6% on services
- GDP - real growth rate
- 6.0% (2019)
Tech Talent in The Philippines
The Philippines is rapidly emerging as a promising hub for tech talent in Southeast Asia. The country boasts a growing community of skilled software developers, engineers, and IT professionals. Filipino universities are producing graduates with strong technical skills, and cities like Manila and Cebu are experiencing a rise in tech startups and innovation centers. The Philippines' competitive labor costs, proficiency in English, and a young, tech-savvy workforce make it an attractive destination for outsourcing and tech-related services. Filipino tech talent is known for its adaptability, creativity, and strong work ethic, contributing significantly to the country's increasing prominence in the regional and global tech industry.
Grow your team in The Philippines with Outstaffer
Looking to employ workers in Philippines? Companies hiring in Philippines must either own a legal entity in the country or work with a global employment solutions provider, usually one that provides employer of record services.
Outstaffer can employ your team in the Philippines on your behalf through our local legal entity in the country and handle payroll, benefits, taxes, and compliance for your Philippines team. You can also pay contractors now in India with Outstaffer.
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
All employee payments are made bi-monthly by Outstaffer.com on your behalf and passed through to you.
Onboarding time
We can help you get a new employee started in the Philippines fast. The minimum onboarding time we need is only 3 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 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. United States has a payroll cut-off date of the 10th of the month unless otherwise specified.
Employing in The Philippines
Employment provisions are primarily laid out in the 1987 Philippine Constitution. The State is compelled to protect labor and provide equal work opportunities regardless of sex, racial background, or religion.
Common questions that could come up during the hiring process include the minimum wage, overtime rates, and guaranteed paid time off.
To employ workers in the Philippines, contact Outstaffer to learn more about your options.
Risks of misclassification
Public holidays
The Philippines have two types of holidays, and both have special holiday pay rates. In the case of Regular Holidays, employees are entitled to 100% of their pay rate even if they didn’t work. If they do work, they’re entitled to 200% of their daily salary.
Jan 1
New Year's Day
Apr 21
Eid'l Fitr (Feast of Ramadhan)
Sep 4
Feast of the Immaculate Conception of Mary
Feb 24
EDSA People Power Revolution Anniversary
May 1
Labor Day
Nov 27
Bonifacio Day
Apr 6
Maundy Thursday
June 12
Independence Day
Dec 25
Christmas Day
Apr 7
Good Friday
Aug 21
Ninoy Aquino Day
Dec 30
Rizal Day
Apr 8
Black Saturday
Apr 28
National Heroes Day
Dec 31
Last Day of the Year
Apr 10
Araw ng Kagitingan
Nov 1-2
All Saints' Day
Special holidays
Feb 12
Chinese New Year
Feb 25
EDSA People Power Revolution
Apr 3
Black Saturday
Aug 21
Ninoy Aquino Day
Nov 1
All Saints' Day
Dec 8
Feast of the Immaculate Conception of Mary
Competitive benefits package in The Philippines
Outstaffer supports our clients by offering competitive benefits packages that will help you attract and retain the best talent across the globe! Our benefits specialists have done the research on norms and requirements in each local market and have crafted packages that will allow your employees to thrive, no matter what country they live in.
Our benefits packages in India are tailored to fulfil the local needs of your employees. Typically, our packages contain some or all of the following benefits:
Private health insurance
Supplemental dental insurance
Supplementary vision insurance
Supplemental maternity insurance
Supplemental screening & vaccine insurance
Additional paid holidays
Flexible work schedule
Employee engagement funds
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.
Probation periods
Probationary periods of up to six months are allowed in the Philippines.
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.
Get started with Outstaffer in three easy steps
01. Book a call or sign up
Book a call with one of our Solutions Managers or create your free account. It’s quick, easy, and you’ll be ready to get started in minutes.
02. Add your people
From new hires to your existing team, onboard them seamlessly with our simple-to-use self-serve platform
03. Dedicated onboarding
Our dedicated team is here to guide you every step of the way ensuring you’re confident, supported, and set up for success.