The Cost of Hiring a Full-Time Employee in Philippines

1. Introduction

The Philippines offers a strong, English-speaking workforce with cost advantages. However, employers need to account for mandatory social security contributions, government-mandated benefits, and local labor standards. This guide outlines the total cost of hiring a full-time employee in the Philippines.

2. Average Gross Monthly Salaries

Salaries depend heavily on industry and location:

• Clerical: PHP 15,000 – 20,000
• Professionals (HR, Accounting): PHP 25,000 – 45,000
• IT roles: PHP 35,000 – 80,000
• Executives: PHP 80,000 – 150,000+

Metro Manila has the highest wage ranges. The national minimum wage varies by region (PHP 610/day in NCR as of 2025).

3. Statutory Contributions and Employer Taxes

Employers must contribute to the following:

• SSS (Social Security System): 8.5% (up to a cap)
• PhilHealth: 4.5%
• Pag-IBIG Fund: 2%

Combined, these add around 15% to gross wages. Monthly remittance is mandatory with electronic reporting requirements.

4. Other Mandatory Costs

• Annual Leave: 5 days Service Incentive Leave (SIL); many offer more
• Public Holidays: Up to 18 days including special non-working days
• Maternity/Paternity Leave:
  • Maternity: 105 days (paid, reimbursed by SSS)
  • Paternity: 7 days paid by employer
• Sick Leave: Not mandated but commonly 5–15 days based on company policy

5. Optional & Market-Driven Benefits

Employers commonly offer:

• HMO (healthcare insurance)
• 13th-month pay (mandatory)
• Internet/transport allowances for hybrid setups
• Performance bonuses

6. Hidden & Overlooked Costs

• Delayed SSS/Pag-IBIG filings can lead to penalties
• Leave encashment and 13th-month settlement at termination
• Misclassification of contractors
• Taxable allowances not properly declared

7. Advisory Notes for Employers

Ensure employment contracts comply with DOLE requirements. Stay updated on government-mandated wage increases and leave policies. Labor inspections are common, especially regarding benefits and safety compliance.

8. How AYP Helps You Manage Cost Efficiently

AYP oversees payroll, mandatory deductions, and compliance with DOLE standards. We help you manage talent costs transparently while minimizing administrative burdens.

9. Contact Us

Planning to hire in the Philippines? Contact AYP to ensure cost-effective, compliant employment.