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Employer Payroll Contributions
| 8.50% | Social Security System (SSS) |
| 1.50% | Philippine Health Insurance Corporation (PHIC) |
| 2.00% | Home Development Mutual Fund (HDMF) |
| 425 PHP per month | Provident Fund (WISP) |
| 11.75% + provident fund | Total Employment Cost |
Employee Payroll Contributions
| 4.50% | Social Security System (SSS) |
| 1.00% – Below PHP 1,500 | Home Development Mutual Fund (HDMF) |
| 2.00% – Above PHP 1,500 | Home Development Mutual Fund (HDMF) |
| 1.50% | Philippine Health Insurance Corporation (PHIC) |
| 225 PHP per month | Provident Fund (WISP) |
| Up to 8% + provident fund | Total Employee Cost |
Employee Income Tax
| 0.0% | up to 250,000 PHP |
| 20.0% | 250,000 PHP – 400,000 PHP |
| 25.0% | 400,000 PHP – 800,000 PHP |
| 30.0% | 800,000 PHP – 2,000,000 PHP |
| 32.0% | 2,000,000 PHP – 2,410,000 PHP |
| 35.0% | 2,410,000 PHP and over |
The National Minimum Wage in the Philippines is 537 PHP per day.
The payroll cycle in the Philippines is generally monthly, and payment is made at least once every two weeks or twice a month at intervals not exceeding 16 days.
A 13th salary must be paid on or before 24th December and is equivalent to one month’s pay (Aguinaldo).
A standard work day is 8 hours plus addition sixty (60) minutes time-off for their regular meals.
Hours in excess of the regular workweek are considered overtime and is regulated by the employment contract or collective agreements. In general, overtime is paid at the rate of 125% of the regular pay.
Senior managers are excluded from overtime pay.
Night Differential
Work performed between 10 p.m. and 6 a.m.
Additional 10% on Regular Wage for each hour of work.
Service Incentive leave in the Philippines is outlined in the employment contract as a minimum of 5 days paid leave a year after the completion of 1 year of employment. This leave can be used as holidays or sick days.
If leave is not taken within the year, the employer can pay out unused leave.
We have 12 paid national regular holidays, 6 national special non-working holidays, and 3 special working holiday.
Sick leave allowance falls under sevice incentive leave.
The maternity leave benefit shall be for one hundred five (105) days with full pay, and additional fifteen (15) days with full pay in case 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 sixty (60) days with full pay.
Paternity Leave is granted to all married male employees in the private sector, regardless of their employment status
The father is entitled to mandatory paid paternity leave of 7 days from the child’s date of birth.
Solo Parental Leave
Additional Parental leave in the Philippines consists of 7 days for single parent leave
Leave For Victims of Violence Against Women and Their Children
10 days for women and their children who are victims of violence.
An employer shall observe procedural due process before terminating one’s employment.
Procedural due process:
The termination process is standard in the Philippines based on the prescribed list of termination reasons contained within Article 282 to 285 of the General Labour Law unless an employer can provide sufficient cause for dismissal without notice (i.e. misconduct).
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Severance Pay (Separation Pay)
An employee’s entitlement to separation pay depends on the reason or ground for the termination of his or her services.
Retrenchment, Cessation of the employer’s business & when the employee is suffering from a disease.
*Separation pay equivalent to onehalf (1/2) month pay for every year of service, a fraction of at least six (6) months being considered as one (1) whole year.
*In no case will an employee get less than one (1) month separation pay if the separation is due to the above stated causes.
Installation of Labor-Saving Devices & Redundancy.
*Separation pay equivalent to his/her onemonth pay for every year of service, a fraction of at least six (6) months being considered as one whole year.
The computation of separation pay of an employee shall be based on his/her latest salary rate.
The probation period in the Philippines for definite employees is 6 months.
Any foreigners coming to work in the Philippines are required by the Bureau of Immigration (BI) to secure a work visa.
Different work visas/permits are available depending on the individual circumstances, skills, and work type. The following documentation must be referenced/completed/returned to the government agencies to fulfill this application.
For a Work Visa, the below documents need to be completed:
9(g) Pre-Arranged Employee Commercial Visa
9(g) Pre-Arranged Employee Non-Commercial Visa
Special Non-Immigrant Visa or 47(A)(2)
Special Non-Immigrant Visa under EO 226, as amended by RA 8756 (ROHQ)
For a Work Permits:
Special Work Permit (SWP)
Provisional Work Permit (PWP)
Alien Employment Permit (AEP)
The standard rate of VAT in the Philippines is 12%.
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