Hire in Philippines
Our quickstart guide to hiring in Philippines
Learn everything you need to know about hiring an employee in Philippines
Currency
Philippine Peso (PHP)
Capital
Manila
Contract Language
English / Filipino
Payroll Cycle
Bi-monthly /Monthly
Wage & Tax Obligations
Minimum Wage Requirements
Minimum wage in the Philippines varies by region and industry. As of 2024, the minimum daily wage ranges from approximately ₱537 to ₱1,020 (about $10.00 to $18.00) depending on the region. Major cities, such as Metro Manila, typically have higher minimum wages.
Individual Income Tax
The Philippines employs a progressive income tax system. The tax brackets for individuals as of 2024 are:
Up to ₱250,000: 0%
₱250,001 to ₱400,000: 15% of excess over ₱250,000
₱400,001 to ₱800,000: ₱22,500 + 20% of excess over ₱400,000
₱800,001 to ₱2,000,000: ₱102,500 + 25% of excess over ₱800,000
₱2,000,001 to ₱8,000,000: ₱402,500 + 30% of excess over ₱2,000,000
Above ₱8,000,000: ₱2,202,500 + 35% of excess over ₱8,000,000
Employers are responsible for withholding income tax from employees' salaries and remitting it to the Bureau of Internal Revenue (BIR).
Payroll Cost
Payroll costs in the Philippines consist of gross salaries and mandatory contributions. Employers typically pay:
Social Security System (SSS): Approximately 13% of the employee's monthly salary, with the employer covering a larger portion.
PhilHealth: 4% of the employee’s monthly salary, with both employer and employee contributing.
Pag-IBIG Fund: 2% of the employee’s monthly salary, typically capped at a certain amount.
Total payroll costs can significantly exceed the gross salary due to these contributions.
Overtime Pay & Maximum Hours
The standard working hours in the Philippines are 48 hours per week (typically 8 hours per day for 6 days). Overtime is compensated as follows:
Overtime pay for work on regular days is calculated at:
125% of the regular hourly rate for the first 2 hours.
130% for hours beyond that.
For work on rest days and holidays, the rate is typically 150% to 200%.
Leave Policy
Maternity Leave
Female employees are entitled to 105 days of maternity leave, with an option for an additional 30 days of unpaid leave. 4 days must be taken before the child's birth. The remaining days should be taken after the child is born.
The employee will receive 100% of their average salary during this period, and Social Security will be responsible for this pay.
Paternity Leave
Fathers are entitled to 7 days of paid paternity leave. Leaves can only be taken after the child’s birth, not before.
Parental Leave
In the Philippines, no law covers parental leave. However, employees may be entitled to maternity or paternity leave.
Sick Leave
Employees in the Philippines are not entitled to sick leave in addition to their Vacation allowance (PTO). However, we see the standard practice as 5 to 10 days of paid sick leave.
Termination
Termination Requirements
Termination must follow specific legal procedures:
Valid reasons for dismissal include just causes (e.g., misconduct) and authorized causes (e.g., redundancy).
Employers must provide written notice stating the reasons for termination.
Notice Period
The notice period varies based on the length of employment:
Less than 6 months: No notice required.
6 months to 1 year: 30 days’ notice.
More than 1 year: 30 days’ notice.
Severance for Employees
Severance pay is required in cases of termination due to redundancy or authorized causes. The computation is as follows:
1 month’s salary for every year of service or a fraction thereof.
Statutory Time Off
Paid Time Off
Full-time employees are granted 5 days of paid time off (PTO) each year. PTO accumulates at a rate of 0.42 days per month, starting from their date of hire. If employees do not use their holidays by the end of the year, they may receive a payout for the unused days.
Public Holidays
Employees are entitled to statutory time off, including:
Public Holidays: 12 regular holidays per year.
Special (Non-Working) Holidays: 2 special holidays.
National public holidays include:
- New Year's Day
- Araw ng Kagitingan (Day of Valor)
- Maundy Thursday
- Good Friday
- Labor Day
- Independence Day
- National Heroes Day
- Bonifacio Day
- Christmas Day
- Rizal Day
Disclaimer
The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. Anemone HR disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.
Information provided in this Country Guide is provided “as is” without warranty of any kind, either express or implied, including without limitation warranties of merchantability, fitness for a particular purpose, or non-infringement. Anemone HR periodically adds, changes, improves, updates, or removes information without notice, and assumes no liability or responsibility for any errors or omissions in the contents of this Country Guide. This Country Guide may contain links to other websites. Anemone HR disclaims all liability for the privacy practices or the content of such websites.