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$299/month
$49/month
2% of gross salary / month
Horizons ensures day-to-day guidance to help your business navigate Philippine labor laws and regulations. We also provide mandatory monthly payroll requirements, and absorb all local employment liabilities. Partnering with our Philippines EOR is the quickest and most cost-effective way to enter the Philippine market.
Note, a Philipine Employer of Record is also known as a Philiipine Professional Employer Organization (PEO).
Hire in the Philippines, and pay employees through our platform or app.
Our Philippines EOR solution is the most affordable on the market.
Fast onboarding in the Philippines, hire in as little as 12 hours.
We draft labor contracts compliant with Filipino labor law.
We administer all mandatory benefits and contributions in the Philippines.
It doesn’t stop with the Philippines — we are an international EOR
Before hiring or engaging an EOR’s services in the Philippines, you need to first conduct a thorough needs assessment and planning. The Filipino work environment has unique labor laws and employment practices. The Labor Code of the Philippines (Presidential Decree No. 442) has some unique requirements that differ from many other global employment markets. For example, unlike many Western countries, the Philippines mandates the 13th-month pay. This is a compulsory annual bonus equivalent to a worker’s one-month salary, typically paid in December. This is not a discretionary benefit but a legal requirement that can catch foreign employers by surprise. Another example is the regularization process legally required for contractual employees. Contractual employees’ contracts must be regularized after six months to grant them job security and benefits. This means that temporary hires can quickly transition to permanent employees, and this can catch employers that are not accustomed to this employment model as a surprise.
Aside from the unique labor laws, the Filipino labor market also has some cultural practices that may constitute culture shock for employers from other parts of the world. Filipino workspaces emphasize hierarchy, as respect for authority is an important factor in the country. Employees typically do not challenge superiors openly and this can be misinterpreted as agreement or lack of initiative by Western management styles. Also, Filipino workers live by a core value called “pakikisama” which emphasizes getting along with others and living in harmony. Another unique cultural practice in Filipino workspaces is the concept of indirect communication style. Filipinos often communicate indirectly to preserve relationships. A “maybe” doesn’t always mean agreement but could indicate politeness or an attempt to avoid disappointing the speaker. This indirect communication style can lead to misunderstandings in project management and performance expectations.
To navigate this unique employment landscape and have a successful collaboration with Filipino employees, you must assess the needs of this market and plan how to successfully navigate the legal and cultural requirements.
Local expertise is non-negotiable when selecting an EOR provider in the Philippines. You need a provider with comprehensive knowledge of regulations set by key government bodies such as the Bureau of Internal Revenue (BIR) and the Department of Labor and Employment (DOLE). To ensure this, you need to evaluate potential EOR providers based on their track record of compliance and ability to manage the Philippines’ employment requirements. They should have established relationships with government agencies and a proven history of successfully managing foreign companies’ employment needs in the Philippines. They should have technological capabilities for payroll and HR management and should be able to handle all administrative functions regarding employee management.
Legal compliance is the foundation of a successful business operation in the Philippines. This is why you need an EOR that can help ensure that your employment relationships are compliant. The ideal EOR provider should be able to navigate the tax regulations and should be able to manage accurate calculations according to the BIR’s requirements. They should be well-versed in the Alien Employment Permit (AEP) process for foreign workers and other requirements of the DOLE.
The EOR should also be able to administer all the required employee benefits in compliance with the Philippines Social Security System (SSS), PhilHealth, and Pag-IBIG Fund. The SSS provides benefits like retirement, disability, and survivor’s pensions. PhilHealth covers medical insurance, while the Pag-IBIG Fund covers housing and savings programs for employees. Each of these systems has specific contribution requirements and reporting mechanisms that need to be handled efficiently to avoid penalties. An excellent EOR should be able to manage that.
Aside from these mandatory programs, your EOR must be well-versed in other legal requirements, including workplace safety standards, anti-discrimination laws, and regulations surrounding employee rights. They should provide a comprehensive compliance strategy that protects both your company and your employees from potential legal complications.
Your contract with your EOR provider establishes the foundation for the kind of working relationship you will develop with them. Transparency is important at this stage. The agreement must address tax obligations in detail, particularly the Withholding Tax on Compensation (WTC), and ensure full compliance with BIR reporting requirements.
Your contract should delineate the responsibilities of your company and the EOR. This includes defining the scope of services, detailed cost structures, compliance management protocols, and strategies for handling potential disputes. Pay special attention to clauses related to tax reporting, employee benefits administration, and the process for managing potential employment-related legal challenges. You also need to ensure that the EOR’s approach to managing additional costs such as mandatory benefits, potential overtime, and other employment-related expenses is clearly stated.
You will need to collaborate with the EOR to ensure that the recruitment process is compliant with local labor laws. The Philippines has anti-discrimination laws that prohibit hiring biases based on gender, religion, ethnicity, or marital status. The EOR ensures that the candidate selection process adheres to anti-discrimination laws. There is also the Anti-Age Discrimination in Employment Act that prohibits job advertisements that specify age requirements. The EOR must ensure that recruitment practices comply with this act as well.
If your company is hiring foreign nationals, the EOR handles the application for Alien Employment Permits (AEP) and ensures that DOLE requirements are met. For example, the government requires that before a company hires a foreigner, they must have skills that are not readily available in the local market and must not displace local workers.
The hiring process must comply with all these laws and requirements to avoid penalties and legal trouble while also establishing the foundation for a successful working relationship.
Once you’ve hired the employees you want to work with, the EOR onboards them. This involves registering them with the necessary government systems like the SSS, BIR, PhilHealth, and Pag-IBIG Fund. This process will require asking for documents like a government-issued ID, birth certificate, tax identification number, and others from the employees.
While the EOR handles all the paperwork and administrative onboarding, you will also need to onboard the employees in your company’s culture. You’ll need to discuss your company policies and also help the employees understand their responsibilities and the metrics for success.
The EOR handles payroll and tax administration following Filipino laws. Payroll processing in the Philippines involves calculating the employees’ salaries, income tax withholdings, social security contributions, health insurance contributions, housing fund contributions, and 13th-month salaries. All these must be done accurately, and all contributions must be remitted on time, with employee’s salaries paid on time as well. Monthly tax returns must be filed to the BIR by the 10th day of the following month, with annual returns due by January 31st. Even minor errors can result in penalties and trigger audits.
The Philippines mandates employers to administer certain benefits to their employees, and this activity is closely monitored. The EOR manages contributions to SSS, PhilHealth, and Pag-IBIG. They ensure that the contributions are accurately calculated and that they cover the full range of benefits. Employees are also entitled to severance pay (under specific termination conditions), maternity and paternity leave benefits, sick leave, and service incentive leave. Administering these benefits ensures compliance and employee satisfaction.
You will need to ensure continued compliance to avoid legal issues. Your EOR will continuously monitor changes in Philippine employment laws, ensuring your organization remains fully compliant with evolving regulations. They will also manage occupational health and safety compliance, ensuring adherence to the Occupational Safety and Health Standards (OSHS) set by DOLE. This includes maintaining a safe workplace and providing the necessary training and equipment. The EOR will also need to report to the BIR, DOLE, and other governmental bodies regularly to ensure that the company remains compliant with all regulatory requirements.
While your company maintains operational control, the EOR manages employee relations. This includes ensuring compliance with the OSHS, resolving conflicts, and maintaining a productive work environment that aligns with Philippine labor regulations. The EOR also offers guidance on performance evaluations and disciplinary actions to ensure they align with Philippine labor laws. This collaboration lets the client company focus on core business operations while relying on the EOR for legal and procedural support.
There needs to be a just cause or an authorized cause before an employee can be terminated in the Philippines. Just causes include serious misconduct or willful disobedience, while authorized causes include business closures or redundancy. Termination without just cause can bring about penalties like payment of back wages and damages.
The EOR ensures compliance with due process, which includes providing written notice at least 30 days in advance. For just causes, the EOR follows a strict two-notice rule: a first notice explaining the grounds for potential termination and a second notice after providing the employee an opportunity to explain their side. For authorized causes, the EOR provides a written notice to the employee and the DOLE at least one month before the intended termination. An employee terminated due to authorized causes receives one month’s pay or at least half a month’s pay for every year of service, whichever is higher, pro-rated 13th-month pay, and unused vacation and sick leaves converted to monetary value. It is important that termination follows these processes to avoid legal disputes.
Written employment contracts are standard practice in the Philippines. Businesses are required to provide a detailed written contract in the local Filipino language that clearly defines the employee’s duties, salary, benefits, and procedures related to termination.
Employers should also include letters of offer when hiring any new employees. Letters of offer must clearly define an employee’s salary and compensation in Philippine Pesos.
In the Philippines, probationary employment is permitted for up to six months. During this time, an employer can choose not to extend the employment relationship without recourse.
Horizons’ Philippines EOR has established relationships with local labor organizations and guarantee employment contracts maintain full compliance.
6 months (maximum)
During probation: none
After probation: 1 month
‘Separation pay‘: 1 month per year of service
6 months (maximum)
During probation: none
After probation: 1 month
‘Separation pay‘: 1 month per year of service
The typical work week in the Philippines is 40 hours, with the average work day being eight hours. If an employee works longer than eight hours in a work day, employers must pay overtime that is 1.25x the employee’s regular hourly rate.
For employees required to work on Sundays or paid holidays, overtime is paid at 1.3x the average hourly rate. The only circumstances where this may differ is when an employment contract stipulates otherwise.
In the Philippines, there are two distinct types of holidays: regular holidays and special non-working days. Regular holidays are paid days off. If an employee is required to work on a regular holiday, they are entitled to 2x their average pay rate for any hours worked. Regular holidays include: Special non-working days are unpaid holidays that employees are not required to work. If an employee is ever required to work on a special non-working day, they are entitled to 1.3x their average pay rate for any hours worked. Special non-working days are subject to change each year. These days can include:
The Philippines has a range of national public holidays that are celebrated annually. In 2025 these holidays are:
| Date | Holiday name |
|---|---|
| 1 January 2025 | New Year’s Day |
| 29 January 2025 | Chinese New Year |
| 25 February 2025 | EDSA People Power Revolution Anniversary |
| 9 April 2025 | Araw ng Kagitingan |
| 17 April 2025 | Maundy Thursday |
| 18 April 2025 | Good Friday |
| 19 April 2025 | Black Saturday |
| 1 May 2025 | Labor Day |
| 12 June 2025 | Independence Day |
| 27 July 2025 | Founding Anniversary of Iglesia ni Cristo |
| 21 August 2025 | Ninoy Aquino Day |
| 25 August 2025 | National Heroes Day |
| 31 October 2025 | All Saints’ Day Eve |
| 1 November 2025 | All Saints’ Day |
| 30 November 2025 | Bonifacio Day |
| 8 December 2025 | Feast of the Immaculate Conception of Mary |
| 24 December 2025 | Christmas Eve |
| 25 December 2025 | Christmas Day |
| 30 December 2025 | Rizal Day |
| 31 December 2025 | Last Day of the Year |
Background checks are standard practice in the Philippines and completed by the majority of foreign companies prior to hiring local talents.
The key advantages are to:
In the Philippines, mandatory universal healthcare is funded through payroll taxes and the general budget. Private health care is also available to those willing to pay for it.
To stay competitive, many employers in the Philippines offer private medical insurance. Some employers will also offer a taxable allowance to cover the cost of private medical insurance.
Employees in the Philippines are entitled to five days of paid leave each year. However, many employers offer up to 15 day’s paid vacation per year. Employment contracts can establish rules for carrying over any unused portion of leave.
Technically. the Philippine government does not require employers to provide employees with sick leave. However, employment contracts often stipulate provisions that include coverage for sick leave.
During times of illness or injury, employees may be entitled to 90% of their average daily wages if they meet the following criteria:
If sick leave is approved in these circumstances, employers are entitled to full reimbursement from the social security system.
In the Philippines, the maternity leave benefit shall be for 105 days with full pay. An additional 15 days with full pay shall be given if the female employee qualifies as a solo parent under RA 8972 or the Solo Parents’ Welfare Act of 2000.
In case of miscarriage or emergency termination of pregnancy, the maternity leave shall be for 60 days with full pay.
In cases of live childbirth, an additional maternity leave of 30 days without pay can be availed of at the option of the female employee, provided that the employer shall be given due notice.
Employers in the Philippines can only terminate employees if there are suitable grounds for dismissal. This can include:
No severance is required in any of the above circumstances.
There are authorized causes in which an employer can legally terminate an employee, with the employer required to pay a severance. Authorized causes include:
Due process is required in any of these cases. This requires that notice must be provided to the affected employee at least 30 days before the date of termination. Notice must also be sent to the Regional Office of the Department of Labor and Employment, in the region where the employer is located. Additionally, the worker is entitled to a hearing or conference in which they can lodge a defense to the charges, present evidence, or rebut evidence.
Severance pay is based on the reason for termination and is generally one month’s wages per year of service. As an example, if an employee has worked for a business for 10 years, the employee would be entitled to 10 month’s severance pay.
Employees also have the option of appealing to an arbitrator. If the employer is found to have not followed the proper procedures, the employee may be entitled to damages, back wages, and/or reinstatement.
Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Philippines EOR can mitigate risk for foreign companies and provide guidance through this process.
Depending on where a business is located in the Philippines, the minimum wage will vary. For people living in the Philippines, it is estimated that a wage of at least P570 per day around Metro Manila is needed to make a living.
If employees work on either a Sunday or a paid holiday, they are entitled to an overtime rate that is 1.3x their regular hourly wage. If an employee works more than eight hours a day, they are typically entitled to overtime that is 1.25x their hourly wage. However, these figures may differ if an employee is part of a union or collective bargaining agreement.
Employers are also responsible for providing employees with a 13-month salary bonus. This is equal to one month’s salary and must be offered to employees before December 24. Most employers in the Philippines will present 13-month bonuses at the start of December. This is to ensure that employees have extra funds to purchase Christmas presents.
| Minimum Wage Country Comparison Chart | (Per month in USD) |
| Switzerland (Geneva) | $4,000 |
| Italy | $2,255 |
| Australia | $1996 |
| Algeria | $156 |
| Uzbekistan | $22 |
It is incumbent on employers to provide their employees with a number of statutory benefits. As an example, employees in the Philippines must receive five day’s paid leave that can be used for either vacation or sick leave.
There are two types of holidays in the Philippines. These are regular holidays and special non-working days. Employees are entitled to receive paid leave for regular holidays and unpaid leave for any special non-working days.
Employers in the Philippines also need to be aware of certain supplemental benefits. Whilst these benefits aren’t compulsory, many employees will still expect them as part of their compensation.
For employers that offer these benefits, it can assist them to attract high-level talent. Such benefits can include medical allowances, transportation, and even housing. Some employers will also choose to offer their employees supplementary insurances. These can include disability, life, and private health insurance.
For expanding businesses, the most significant restriction to benefits and compensation is the establishment of a local entity. Employers are typically unable to hire and pay employees without first establishing a subsidiary in the Philippines. This process can take months to complete, which causes large-scale business delays.
With Horizons’ Philippines EOR, you can begin operating in the Philippines in as little as 48 hours. We act as your employees’ Employer of Record, which means there’s no need to establish a subsidiary in the Philippines. And as the only global EOR with an in-house recruitment team, we can help you source, hire, and onboard top local and international talent.
Philippines Employer Of Record Peo
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A Philippines EOR is a company that hires employees on behalf of another company in the Philippines and acts as the legal employer for the employees. The EOR manages employment contracts, payroll, taxes, benefits, and HR management, leaving the client company to focus on its main business.
Companies looking to hire Filipino employees without engaging an EOR’s service can do so by hiring the employees directly. This requires setting up a branch or a subsidiary of their company in the Philippines. Companies can also engage the services of a Professional Employer Organization (PEO), where the PEO handles administrative and compliance tasks similar to an EOR but doesn’t take on the legal employer responsibility. Another option is to hire independent contractors or freelancers.
The cost depends on the role you’re employing to fill, the industry you work in, and the location of your employees. However, you will need to pay your employee’s salary and administer benefits. The minimum wage in the Philippines is Php 608 for employees in the agriculture sector and Php 645 for employees in the non-agriculture sector.
The EOR is responsible for calculating, withholding, and remitting payroll taxes and social contributions to the relevant government agencies.
As the legal employer, the EOR is legally responsible for employees.
Generally speaking, the terms “Philippine PEO” and Philippine EOR” are used interchangeably.
A EOR in Philippines can feasibly hire both local and foreign nationals to work in Philippines.
However, the ability of Horizons to sponsor your foreign national employee in Philippines may be limited due to visa quotas practiced in many countries.
Contact us with your requirements and our Global Mobility team with review the case and get back to you within 2 business days.
In most cases, Horizons’ Philippines EOR can hire & onboard your employee within 24 hours. The actual start date of the employee will depend on their notice period obligation to their previous employer as well as any relevant hiring rules in Philippines.
It is possible to get a work visa in Philippines. Horizons’ Global Mobility team is a dedicated team of work visa experts. They assess the details of each case to determine feasibility and costs before Horizons applies for the work visa on behalf of your employee. If the Global Mobility team determines that your case is feasible, the process is smooth and transparent. Visa spots in Philippines are limited, however—get started today to secure your employees’ visa spot.
Yes, it’s a common practice in the Philippines to complete a background check prior to onboarding a new hire. Horizons has an automated process in place and provides an instant background check of your candidates, including identity verification, employment history, and compensation records fully compliant with Filipino data privacy laws.
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Holiday Schedule in Philippines [2025]
