What is an Employer of Record (EOR), and How Does it Work?

An Employer of Record (EOR) in the Philippines is a service that enables companies to employ and manage staff in the Philippines without the necessity of setting up a local legal entity. With AYP Group’s EOR Philippines solution, we act as the legal employer for your workforce, handling all administrative and legal duties. This includes managing payroll, taxes, benefits, and ensuring adherence to local employment regulations.

By utilizing AYP Group’s EOR services in the Philippines, your company can smoothly enter the Philippine market while we manage the complexities of employment.

What are the Advantages of Using an EOR?

1. Accelerated Market Entry:
   ‍AYP Group’s EOR Philippines solution allows your business to rapidly establish a presence in the Philippines, bypassing the lengthy setup processes. This lets you begin operations and
   hire employees quickly.‍
2. Cost Efficiency:
   ‍Avoid the high costs associated with establishing a local entity, such as legal, administrative, and HR expenses. The EOR model offers a cost-effective alternative, letting you focus resources where they are most needed.‍
3. Regulatory Compliance:
   ‍Understanding and adhering to Philippine labor laws can be challenging. AYP Group ensures comprehensive compliance with all local employment regulations, protecting your business from legal complications.‍
4. Administrative Management:
   ‍AYP Group manages all HR-related functions, including payroll and benefits administration, allowing your internal team to concentrate on strategic priorities.‍
5. Scalability:
   ‍Easily adjust your workforce in the Philippines based on business needs without the constraints of managing a local entity. This flexibility is essential for businesses looking to enter or expand within the Philippine market.

How Does an EOR Ensure Compliance? What Are the Compliance Issues to Take Note Of?

AYP Group’s EOR Philippines solution guarantees compliance by:

1. Employment Contracts:
   ‍We create and manage employment contracts that comply with Philippine labor laws, covering aspects like compensation, termination, and employee rights.
2. Tax and Social Security Contributions:
   ‍AYP Group handles all payroll-related taxes and contributions, ensuring adherence to Philippine tax laws and social security requirements.
3. Employee Benefits:
   We ensure that your employees receive all legally required benefits, such as leave entitlements and social security contributions, in line with Philippine regulations.
4. Documentation and Reporting:
   ‍AYP Group maintains detailed documentation and provides regular reports to ensure transparency and compliance with local laws.

Key compliance issues include:

• Ensuring employment contracts meet Philippine labor law requirements.
• Complying with local tax and social security regulations.
• Keeping abreast of changes in labor laws and regulations.

What Are the Costs Associated with Using an EOR?

The costs of utilizing an EOR in Singapore generally include:

1. Monthly Service Fees:
   ‍AYP Group charges a monthly fee based on the number of employees managed, covering employment, compliance, and administrative services.‍
2. Payroll Costs:
   ‍Includes employee salaries, bonuses, statutory deductions, and mandatory contributions such as the Social Security System (SSS) and PhilHealth.‍
3. Setup Fees:
   ‍Initial costs related to onboarding new employees, including contract drafting and compliance checks.‍
4. Forex Mark-up and Bank Charges:
   ‍Managing multiple currencies involves forex mark-ups to handle exchange rate variations, ensuring accurate salary payments. Combined with applicable bank charges, these costs are essential for smooth international payroll operations.

How Does the Process of Using an EOR Work? What is the Timeline to Onboard an Employee?

AYP Group’s EOR Philippines service streamlines the process:

1. Initial Consultation:
   We start with a consultation to understand your hiring needs and business objectives in the Philippines.‍
2. Customized Proposal:
   ‍AYP Group provides a tailored proposal detailing the scope of services, costs, and timelines.‍
3. Agreement and Onboarding:
   ‍After finalizing the agreement, we commence the onboarding process, including contract preparation, payroll setup, and compliance checks.‍
4. Employee Onboarding:
   ‍AYP Group manages all aspects of onboarding, from executing employment contracts to enrolling employees in benefits programs.

The typical timeline to onboard an employee in the Philippines through our EOR service is 1 to 3 weeks, depending on specific requirements and complexity.

How Does an EOR Manage Employee Benefits and Payroll?

AYP Group’s EOR Philippines service meticulously manages employee benefits and payroll:

1. Payroll Management:
   ‍We ensure timely and accurate payroll processing, including salary disbursement, tax deductions, and contributions to SSS and PhilHealth.
2. Employee Benefits Administration:
   AYP Group manages statutory benefits like health insurance, leave entitlements, and retirement contributions, ensuring compliance with Philippine laws.
3. Benefits Optimization:
   ‍We regularly review and enhance benefits packages to ensure they are competitive and compliant with local regulations.

What is the Process of EOR in Philippines for Foreign Employees?

AYP Group’s Employer of Record (EOR) in the Philippines service simplifies the hiring and management of foreign employees:

1. Needs Assessment:
   ‍We assess your business requirements to determine the appropriate work permit in the Philippines, such as the 9(g) Work Visa or Special Work Permit (SWP).
2. Work Permit Application:
   ‍AYP Group manages the entire application process for the work permit in the Philippines, ensuring full compliance with Philippine immigration regulations and timely approval.
3. Employment and Onboarding:
   ‍We draft compliant employment contracts according to Philippine labor laws and handle the onboarding process, including payroll setup and benefits administration.‍
4. Ongoing Compliance:
   ‍AYP Group ensures continuous adherence to local labor laws, manages HR issues, and handles the renewal of work permits in the Philippines as needed.‍
5. Offboarding:
   ‍When an employee’s term ends, we manage the exit process, including work permit cancellations and final payroll processing, ensuring all legal obligations are met.

This approach enables your company to efficiently hire and manage foreign talent in the Philippines without needing a local entity, utilizing AYP Group’s EOR Philippines services for seamless and compliant operations.

How to Get Started with EOR?

Getting started with AYP Group’s EOR Philippines solution is simple:

1. Contact Us:
   ‍Reach out to our team for an initial consultation to discuss how our EOR services in the Philippines can assist with your business expansion.
2. Assessment and Proposal:
   ‍We will evaluate your needs and provide a customized proposal, including detailed pricing and service offerings.
3. Agreement and Implementation:
   Upon agreement, we will start the onboarding process, taking over all employment-related functions to ensure a smooth transition.
4. Ongoing Support:
   ‍AYP Group provides continuous HR, compliance, and payroll management support, ensuring your business operates smoothly in the Philippines.

Use Case: How Employer of Record (EOR) helps company to expand without an entity in Philippines

A US-based fintech company aimed to expand into the Philippine market to leverage its growing tech talent pool. Instead of establishing a local entity, which would involve substantial time and financial commitment, they chose AYP Group’s EOR Philippines solution.

Challenges:

• Immediate need to enter the Philippine market to leverage emerging opportunities.
• Navigating complex local employment regulations.
• Establishing a local HR infrastructure would have been resource-intensive.

Solution:

AYP Group provided a comprehensive EOR solution, including:

• Rapid Onboarding:
  ‍Quick setup of employment contracts and payroll management.
• Compliance Management:
  ‍Handling of all local tax and labor law compliance.
• Employee Benefits:
  ‍Administration of statutory benefits like SSS, PhilHealth, and health insurance.

Outcome:

The company successfully hired and onboarded employees in the Philippines within weeks, allowing them to start operations immediately. They avoided the costs and complexities of setting up a local entity while staying fully compliant with all regulatory requirements. AYP Group’s EOR solution facilitated a smooth expansion, giving the company the agility to grow in a new market.

With AYP Group’s Employer of Record solution in the Philippines, businesses can expand operations without establishing a local entity, ensuring compliance, cost-efficiency, and a seamless transition into new markets. Contact us today to learn how our EOR Philippines services can support your business growth.