Guide to employment, payroll and benefits in

Philippines

Rivermate offers complete payroll, benefits and compliance services for

Philippines

01. Overview

Last updated: 

August 19, 2021

Currency
Philippine Peso
Capital
Manila
Ease of doing business
62.8
Language
English
Population
109581078
GDP growth
6.68%

02. Grow your team in

Philippines

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Philippines

, particularly if you don't have established local relationships. You can hire employees in

Philippines

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

The Philippines, formally the Republic of the Philippines, is a Southeast Asian archipelago. It is located in the western Pacific Ocean and is made up of approximately 7,640 islands divided into three major geographical divisions from north to south: Luzon, Visayas, and Mindanao. The Philippines shares maritime boundaries with Taiwan to the north, Japan to the northeast, Palau to the east and southeast, Indonesia to the south, Malaysia and Brunei to the southwest, Vietnam to the west, and China to the northwest, and is bounded by the South China Sea to the west, the Philippine Sea to the east, and the Celebes Sea to the southwest. The Philippines has a population of about 109 million people and occupies an area of 300,000 km2, making it the world's twelfth-most populous country as of 2020. The Philippines is a multiethnic and multicultural country with a wide range of ethnicities and cultures spread throughout its islands. The nation's capital, Manila, is located within the Metro Manila metropolitan region, as is the country's largest city, Quezon City. The archipelago's first settlers, the Negritos, were accompanied by successive waves of Austronesian peoples. Spanish colonization began with the arrival of Ferdinand Magellan, a Portuguese explorer who led a fleet to Spain. Ruy López de Villalobos, a Spanish explorer, named the archipelago Las Islas Filipinas in honor of Philip II of Spain in 1543. Beginning in 1565, Spanish settlement resulted in the Philippines becoming a part of the Spanish Empire for more than 300 years. Catholicism became the dominant religion during this period, and Manila became the western hub of trans-Pacific trade. The Philippine Revolution started in 1896, and it became entwined with the Spanish–American War in 1898. The territory was ceded to the United States by Spain, while Filipino rebels formed the First Philippine Republic. Following the conclusion of the Philippine–American War, the United States gained control of the territory, which they retained until the Japanese invasion of the islands during World War II, when the Philippines were liberated and declared independent in 1946. Since then, the unitary sovereign state has had a turbulent relationship with democracy, which included the People Power Revolution's overthrow of a dictatorship. It is classified as an developing market and a newly developed country with an economy that is shifting away from agriculture and toward services and manufacturing. The Philippines is a founding member of the United Nations, World Trade Organization, ASEAN, Asia-Pacific Economic Cooperation Forum, and East Asia Summit. Because of its location on the Pacific Ring of Fire and proximity to the equator, the Philippines is vulnerable to earthquakes and typhoons. The nation has a diverse range of natural resources as well as a high degree of biodiversity.

04. Public holidays

05. Types of leave

Paid time off

Employees who have worked for at least a year are entitled to five days of vacation. These days can be used as vacation or sick time. Employees who do not utilize their leave at the end of the year may be paid for the days they did not utilize.

Public holidays

There are 21 holidays in all, with 9 of them being non-working holidays.

Sick days

Employees who have worked for at least a year are entitled to five days of vacation. These days can be used as vacation or sick time.

Maternity leave

Post childbirth, the following applies:105 days of leave if the employee has paid at least three monthly contributions within the 12-month period before the birthmothers who gave birth to twins or triplets are not entitled to any additional maternity leave.The mother can file her maternity benefits for up to 10 years.In the event of a miscarriage, the following applies:60 days of leaveThe employee has paid at least three monthly contributions within the 12-month period before the miscarriageThe leave will be paid by the employer who can later request reimbursement from Social Security.

Paternity leave

For the first four deliveries of the lawful spouse with whom they are cohabiting, all married male employees in the commercial and public sectors are entitled to seven days of full pay.

Parental leave

Single parents are entitled to an additional 7 days of paid leave each year as a single parent.

Other leave

06. Employment termination

Termination process

An employee may be terminated for legitimate and allowed reasons in accordance with the Labor Code, as well as for any major violation of corporate rules and regulations, or for the commission of additional infractions or violations of the Code of Conduct.

Notice period

Employees must give at least 30 days notice.

Severance pay

Severance pay or separation pay shall be paid only if the employee was terminated (not resigned) by the employer for authorized reasons. Each year, the employee may receive up to one month's salary multiplied by their length of service.

Probation period

A probationary period may not exceed six months in duration. After the probationary period expires, the employment contract is considered permanent.

07. Working hours

General

The standard workweek is forty hours spread over five days. Young workers under the age of 15 have a maximum workweek of 20 hours, while those between the ages of 15 and 18 have a maximum workweek of 40 hours. They are unable to work in the evening.

Overtime

Individuals performing supervisory or managerial duties are expressly excluded from overtime pay. On normal days, all hours worked in excess of the standard eight hours must be compensated with a daily salary plus a minimum of 25% additional pay.


On special holidays, all hours worked in excess of the standard eight hours per day must be compensated with the daily salary plus a minimum of 30% additional pay. On legal holidays, any hours worked in excess of the standard eight hours per day must be compensated with double the daily wage.

08. Minimum wage

General

The minimum wage for workers in the agricultural sector is 500.00 PHP per day, while in the non-agriculture sector it is 537.00 PHP per day.

09. Employee benefits

General

The Philippines has mandatory universal healthcare that is financed by payroll taxes and the general budget. There is also the option of paying for private health care. The private healthcare system serves 30% of the population.

Offering extra incentives may aid in attracting and retaining important personnel. The following are some common extra perks provided by certain companies in the Philippines

Allowances: Some companies offer allowance for things such as housing, transportation, and medical allowances. If an allowance can be classified as a cost of living allowance it is tax deductible. All other allowances will be taxed.

Supplementary Insurances: supplementary life, disability, and health insurance are often provided by employers and are recommended.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Philippines

to hire a team takes time, money, and effort. The labor law in

Philippines

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Philippines

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Philippines

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Philippines

via our Employer of Record / PEO solution.

Ready to get started? Our friendly staff is ready to assist you with all your questions, let's connect.