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hire in the Philippines

Philippines EOR & PEO

SALARY PAYMENT IN Philippine Peso (₱)

CONTRACT LANGUAGES Filipino / English

PAYROLL TAX 8.5%

PAYROLL CYCLE Bi-weekly

TIME TO HIRE 24 hours

Hire and pay talents
with Horizons in
180+ countries

Simple, compliant hiring with Horizons EOR

Hire in the Philippines

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).

Facts & Stats

EOR Platform

Hire in the Philippines, and pay employees through our platform or app.

EOR Cost

Our Philippines EOR solution is the most affordable on the market.

Time-to-hire

Fast onboarding in the Philippines, hire in as little as 12 hours.

Contracts

We draft labor contracts compliant with Filipino labor law.

Local Benefits

We administer all mandatory benefits and contributions in the Philippines.

180+ Countries

It doesn’t stop with the Philippines — we are an international EOR

stay compliant with Philippines labor laws

Employment Laws

Employment contracts in the Philippines

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.

Fixed-term
Probationary period6 months (maximum) 
Termination notice period

During probation: none

After probation: 1 month

SeveranceSeparation pay‘: 1 month per year of service
Indefinite
Probationary period6 months (maximum) 
Termination notice period

During probation: none

After probation: 1 month

SeveranceSeparation pay‘: 1 month per year of service

Working hours in the Philippines

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. 

Hire compliantly in Philippines without a local entity.

Quick, compliant hiring in 12 hours—no subsidiary required.

Holidays in the Philippines

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 2024 these holidays are:

DateHoliday name
1 Jan, 2024New Year’s Day
2 Jan, 2024Special non-working day after New Year
23 Jan, 2024First Philippine Republic Day
25 Feb, 2024People Power Anniversary
28 Mar, 2024Maundy Thursday
29 Mar, 2024Good Friday
30 Mar, 2024Black Saturday
9 Apr, 2024The Day of Valor
10 Apr, 2024Eidul-Fitar (Tentative Date)
1 May, 2024Labor Day
12 Jun, 2024Independence Day
16 Jun, 2024Eid al-Adha (Feast of the Sacrifice) (Tentative Date)
21 Aug, 2024Ninoy Aquino Day
26 Aug, 2024National Heroes Day
3 Sep, 2024Yamashita Surrender Day
8 Sep, 2024Feast of the Nativity of Mary
1 Nov, 2024All Saints’ Day
2 Nov, 2024All Souls’ Day
27 Nov, 2024Bonifacio Day
25 Dec, 2024Christmas Day
30 Dec, 2024Rizal Day
31 Dec, 2024New Year’s Eve

 

Taxes in the Philippines

In the Philippines, both employees and employers are required to contribute to the nation’s Social Security System (SSS). The current deduction rate is 11% of an employee’s monthly salary and must not exceed P16,000. Employers are responsible for 7.37% of this amount, whilst employees contribute 3.63%.

Background checks in the Philippines

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:

  1. Verify the identity of the candidate;
  2. Get an accurate and reliable check on the candidates’ employment history and income;
  3. Avoid paperwork and phone calls by using an integrated background check tool during the candidate’s onboarding (offered by Horizons).

Social security system

The Philippine social security system provides employees and their families with protections in the event of disability, old age, sickness, and death. All workers under 60 who earn more than P1,000 a month must contribute to this fund. Contributions are automatically deducted from an employee’s salary on a monthly basis. 

Health insurance

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.

Vacation leave

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.

Sick 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:

  • The employee has exhausted all sick leave provided by their employer
  • The employee has paid at least three of the previous 12 monthly social security contributions – before the illness or injury arose
  • The employee was hospitalized for more than three days and is approved by the social security system

If sick leave is approved in these circumstances, employers are entitled to full reimbursement from the social security system. 

Maternity and paternity leave

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. 

Termination and severance

Employers in the Philippines can only terminate employees if there are suitable grounds for dismissal. This can include: 

  • Serious misconduct
  • Gross and habitual neglect of duty
  • Willful disobedience
  • Fraud or breach of trust
  • Commission of a crime against the employer

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:

  • Replacement of labor-saving devices
  • Redundant placement
  • Closure of business
  • Disease or illness
  • Retrenchment to prevent losses

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.

hassle-free Philippines compensation & benefits

Compensation & Benefits

The Philippines compensation laws

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
Guaranteed benefits in the Philippines

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.

The Philippines benefit management

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.  

Benefits and compensation restrictions

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. 

Hire in Philippines in 12h
without your own local entity.

With Horizons, you get quick service, transparent pricing, and expert support.

FAQs

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.