Computation for The Philippines
Your Investment
See the full cost of employing talent in the Philippines.
Compare by Role
Understand the total cost of hiring different roles in the Philippines.
Clear, All-In Costs
View the full employer cost including statutory contributions, required accruals, and Remotify service fees.
You are invoiced once per month, while your team is paid twice per month.
One (1) month of salary is billed in advance.
A 2.5% FX buffer is applied to the invoice amount.
Your Team's Take Home
Know Exactly What Your Team will be paid
Compare by Role
Understand how take-home pay varies across roles in the Philippines.
Clear Salary Breakdown
See how salary, statutory deductions, and benefits affect employee take-home pay.
The 13th month salary in the Philippines is a mandatory benefit paid annually.
Night differential may apply (10% premium for work between 10:00 PM – 6:00 AM PHT).
Remotify owns an entity in The Philippines
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Remotify’s Guide to
Hiring in The Philippines
Minimum Wage Requirements
In the Philippines, the applicable minimum wage is set by region. There is no national minimum wage. The applicable minimum wage is determined by the region where the employer’s company is incorporated.
For Remotify, which is incorporated in the National Capital Region (NCR), the minimum salary is PHP 15,116.25 per month.
While the statutory minimum wage establishes the legal baseline, compensation for professional and knowledge-based roles is generally determined by prevailing market benchmarks to ensure competitiveness and talent retention.
Individual Income Tax
The individual income tax ranges from 0% to 35%. The Philippine tax system follows a progressive structure under the TRAIN Law. Tax is calculated solely based on the employee's gross annual income.
| Gross Annual Income | Tax Rate (%) |
|---|---|
| Up to PHP 250,000 | 0% (Tax Exempt) |
| 250,001 to 400,000 | 15% of excess over 250k |
| 400,001 to 800,000 | PHP 22,500 + 20% of excess over 400k |
| 800,001 to 2,000,000 | PHP 102,500 + 25% of excess over 800k |
| 2,000,001 to 8,000,000 | PHP 402,500 + 30% of excess over 2M |
| Over PHP 8,000,000 | PHP 2,202,500 + 35% of excess over 8M |
Payroll Cost
The employer cost is generally estimated at ~12.50% of the employee salary:
- Philippine Health Insurance Corporation (PhilHealth): 2.5%
- Social Security: ~10%
- Home Development Fund (HDMF): PHP 200
Philippine Health Insurance Corporation (PhilHealth) contribution is capped at PHP 2,500/month.
Social Security contributions are calculated on the employee's monthly salary credits (MSC) and capped at PHP 3,530/month.
These costs are provided as estimates and are intended solely for general informational purposes. To fully comprehend all associated costs and fees related to the terms of any employment agreement for the Philippines, please contact our Sales team for a quote.
Overtime Pay & Maximum Hours
Standard working hours are 8 hours per day, 40 hours per week. The standard workweek is from Monday to Friday. A typical shift includes a 1-hour unpaid lunch break and a 30-minute paid break.
Overtime payment is mandatory and can't be included in the salary. Hours outside of standard work hours are considered overtime. For additional hours, employees are paid:
- 125% of the hourly rate on working days
- 130% of the hourly rate on holidays
Night Shift Differential (NSD) is an additional 10% added to the hourly rate for work performed between 10:00 PM and 6:00 AM.
Maternity Leave
Pregnant employees are entitled to 105 days of maternity leave under Philippine law, regardless of SSS benefit eligibility. Qualified solo parents are entitled to an additional 15 days of paid leave, bringing the total entitlement to 120 days.
Employees who have sufficient SSS contributions during the applicable semester and whose pregnancy has been properly reported to the Social Security System (SSS) may qualify for SSS maternity benefits.The employer is required to advance 100% of the employee's salary for the entire maternity leave period, with payment made at least 30 days before the expected date of childbirth.
SSS reimburses the employer up to the applicable statutory limit (currently up to approximately ₱70,000, subject to eligibility). Any salary differential required under Philippine law remains the employer's responsibility.
As the Employer of Record, Remotify administers the maternity leave process and advances the maternity pay to the employee. The full maternity salary is billed to the client in advance. Once the SSS reimbursement is received, the reimbursed amount is credited back to the client. Any salary differential required under Philippine law remains an employer cost and is billed to the client.
Employees may also choose to extend their maternity leave by up to an additional 30 days without pay, provided appropriate notice is given to the employer.
Paternity Leave
Qualified married male employees are entitled to seven (7) working days of paid paternity leave for the first four deliveries, including miscarriage, of their lawful spouse with whom they are cohabiting, in accordance with Philippine law.
The employee must notify the employer of the pregnancy and expected date of delivery. Paternity leave may be taken before, during, or after the child's birth, provided the total leave does not exceed seven working days.
During the paternity leave period, the employee receives 100% of their regular salary.
Unlike maternity leave, paternity leave is not reimbursed by the Social Security System (SSS). The full cost of the leave is borne by the employer.
As the Employer of Record, Remotify administers the paternity leave process and pays the employee during the leave period. The full salary cost for the paternity leave is billed to the client.
Sick Leave
Standard practice often provides 10 days of Sick Leave per year. Any sick leave extending beyond two days requires a valid doctor's certificate. Employees should submit their sick leave to Remotify through the Time Off feature.
If an employee has used all of their leave credits and needs to take more time off to recover from sickness, the additional days will be unpaid leave. Employees may qualify for reimbursement through the Social Security System (SSS)'s sickness Benefit. Treated similarly to a Maternity Benefit, this Sickness Benefit ensures that eligible employees receive a portion of their regular pay.
Solo Parent Leave
Regular employees who qualify for the Solo Parent act are entitled to 7 days of additional parental leave annually upon presenting a Solo Parent ID.
Bereavement Leave
Employees may apply for up to 5 working days of bereavement leave for the death of an immediate family member, and 1 working day for the death of an extended family member.
Violence Against Women & Children
(RA 9262)
At any time during the application of any protection order, investigation, prosecution and/or trial of a criminal case, a victim of the Violence Against Women and Children Act shall be entitled to a paid leave of up to ten (10) days, extendible when the necessity arises as specified in the protection order.
Special Leave for Women
Female employees may be entitled to 2 months of leave with full pay following surgery for gynecological disorders.
Termination Requirements
Terminations in the Philippines must respect complex local labor laws, as the country is not an "at-will" employment jurisdiction. The off-boarding process is always handled by Remotify in coordination with primary stakeholders to ensure full compliance. This process may include ad-hoc fees and specific required steps depending on the nature of the case.
An employee may be terminated for just causes and authorized causes as per the Labor Code. The employer must give written notice of the termination.
- Just Causes: These relate to employee conduct or performance, such as serious misconduct, willful disobedience, gross and habitual neglect of duties, or fraud.
- Authorized Causes: These relate to business necessity, such as redundancy, retrenchment to prevent losses, or the closure of operations.
Non-Regularization: For employees on probation, failure to meet the clearly communicated performance standards or receiving a Final Written Warning during the probationary period can warrant non-regularization.
Notice Period
The minimum notice period is usually 30 days.
Severance for Employees
Severance Pay is defined according to the cause of termination and ranges from 0.5 months to 1 month's wages for each year of employment.
If due to redundancy, at least 1 month's pay or at least 1 month's pay for every year* of service of the employee, whichever is higher.
If retrenchment to prevent losses, closure, or disease, at least 1 month's pay or at least 0.5 month's pay for every year* of service of the employee, whichever is higher.
To protect you from unforeseen financial risks arising from terminations, Remotify applies a Severance Accrual to all employment agreements in the Philippines.
Remotify has extensive expertise in managing litigation risks and our Severance Accrual calculation is based on the prevailing common-law or statutory entitlements and local best practices. In the event your employee resigns or is not entitled to severance, all unused amounts will be returned to you.
Paid Time Off (PTO) – Vacation Leave
Government Minimum: According to Philippine law, 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.
Standard Market Practice: To remain competitive and attract top talent, the standard practice in the Philippines often involves providing 14 days of Vacation Leave (VL).
Accrual Basis: Leave credits are accrued monthly starting from the employee's start date.
Scheduling: To maintain operational efficiency, leaves must be pre-scheduled and submitted for approval at least two (2) weeks prior to the intended date.
Public Holidays
Managing a global team often involves non-traditional hours. We ensure your team is compensated accurately for every hour worked:
| Shift Detail | Rate / Premium |
|---|---|
| Regular Holiday | 200% of the hourly rate for hours worked. |
| Special Non-Working Holiday | 130% of the hourly rate for hours worked. |
| Night Shift Differential (NSD) | An additional 10% premium is applied for any work performed between 10:00 PM and 6:00 AM. |
Unworked Holidays: Regular Holidays, monthly paid employees are entitled to 100% of their daily rate even if they do not work, provided they were present or on paid leave the day before the holiday.
The Philippines observes a combination of Regular Holidays and Special Non-Working Days. While the specific number can vary slightly year-to-year via presidential proclamation, the standard calendar typically includes 10 to 12 Regular Holidays and several Special Non-Working Days.
National Regular Holidays
On these days, employees are entitled to 100% of their daily rate even if they do not work. If they do work, they receive 200% of their hourly rate.
- New Year's Day (January 1)
- Maundy Thursday
- Good Friday
- Araw ng Kagitingan (Day of Valor – April 9)
- 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'l Fitr & Eid'l Adha (Dates vary based on the lunar calendar)
*Dates for Islamic holidays are issued via separate proclamations based on the lunar calendar.
Special Non-Working Days
These follow the "no work, no pay" principle unless a more favorable company policy exists.
- February 17 (Tuesday): Chinese New Year
- April 4 (Saturday): Black Saturday
- August 21 (Friday): Ninoy Aquino Day
- November 1 (Sunday): All Saints' Day
- November 2 (Monday): All Souls' Day
- December 8 (Tuesday): Feast of the Immaculate Conception of Mary
- December 24 (Thursday): Christmas Eve
- December 31 (Thursday): Last Day of the Year
Important Notes for 2026
- EDSA Anniversary: February 25 (Wednesday) is a Special Working Day, meaning it is treated as a regular working day for pay purposes.
Onboarding
Timeline: Onboarding typically takes 2 business days once all requirements are met.
Mandatory Documentation: Employees must submit all required compliance documents before their start date. While some supplementary files may be optional, mandatory documents are non-negotiable to ensure legal work status.
Pre-Employment Checks: We conduct standard pre-employment verification to ensure integrity of identity.
Background Checks: For added peace of mind, Remotify offers optional, comprehensive background checks tailored to your specific security requirements.
Statutory Enrollment: Within the first month of the employee, our dedicated Compensation and Benefits manages all mandatory registrations immediately to guarantee labor compliance and coverage for your employees.
Within the employee's first month, we ensure they are officially enrolled and reflected in the systems of the following government agencies:
- Social Security System (SSS): Provides disability, retirement, and death benefits, as well as maternity and sickness salary allowances.
- PhilHealth (Philippine Health Insurance Corporation): Ensures employees have access to health insurance and subsidized medical care.
- Pag-IBIG Fund (Home Development Mutual Fund): A mandatory savings program that provides housing loans and short-term cash loans.
- Bureau of Internal Revenue (BIR): Handles the registration of the employee as a taxpayer and ensures correct withholding of monthly income tax.
Employment Contract Details
In the Philippines, clarity in documentation is the foundation of a reliable employer-employee relationship. At Remotify, we ensure every contract is compliant with local labor laws while remaining straightforward and easy to understand.
To meet legal standards, a contract must include the following:
- Full Name of the employee
- Start Date of employment.
- Length of Employment (whether permanent or fixed-term).
- Job Description and specific duties.
- Termination conditions
Probation Period
Probation periods are not a legal requirement, but they are highly recommended for assessing fit.
Duration: The standard probation period is a maximum of 180 days (6 months).
Security of Tenure: This is a critical milestone in local hiring—employees earn automatic permanent employment on the 6th month of employment and gain security of tenure. This means they can no longer be dismissed without just or authorized cause and due process.
Performance Standards: Employees must be informed of the standards they need to meet to qualify for regular employment at the time of engagement. They earn automatic permanent employment on the 6th month of employment and gain security of tenure.
Fixed-Term Exception: It is important to note that fixed-term contracts cannot have a probationary period.
Download the complete guide
to hiring in The Philippines
Frequently Asked Questions
What is an Employer of Record (EOR) in the Philippines?
An Employer of Record (EOR) in the Philippines is a third-party organization that legally employs workers on behalf of a client company. The EOR handles all employment compliance, payroll, government contributions, and required benefits under Philippine labor law.
Can I hire employees in the Philippines without setting up a local entity?
Yes, you can hire employees in the Philippines without setting up a local company by working with an Employer of Record. The EOR becomes the legal employer and handles all employment compliance under Philippine labor law, including payroll, government contributions, and required benefits.
How quickly can I onboard employees in the Philippines using Remotify?
Remotify's streamlined onboarding process typically takes 2 business days once all required documentation and compliance requirements are met, allowing you to get your team up and running quickly.
Can I onboard multiple employees at the same time?
Yes, Remotify supports concurrent onboarding of multiple employees. Our dedicated team manages all compliance, documentation, and government registrations simultaneously to ensure a smooth process regardless of team size.
Does an EOR handle Philippine tax filings?
Yes, as the legal employer, an EOR handles all tax-related obligations including BIR registration, monthly withholding tax computations, and annual tax filings on behalf of your employees in compliance with Philippine tax law.
How does the cost of using an EOR compare to setting up my own entity in the Philippines?
Setting up a local entity in the Philippines involves significant upfront costs, ongoing compliance overhead, and legal complexity. Using an EOR like Remotify gives you immediate access to a compliant workforce at a fraction of the cost, with no entity setup required.
Who is the best EOR provider in the Philippines?
Remotify is a leading Employer of Record provider in the Philippines, offering deep local expertise, fast onboarding, full compliance with Philippine labor law, and dedicated support for both employers and employees.
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