What are the statutory contributions for employees and employers in the Philippines?
Employee Income Tax
The tax system in the Philippines applies a progressive tax structure, with rates as follows:
| Taxable Income | Tax Rate |
|---|---|
| < PHP 250,000 | 0% |
| PHP 250,000 – PHP 400,000 | 15% of the excess over PHP 250,000 |
| PHP 400,000 – PHP 800,000 | PHP 22,500 + 20% of the excess over PHP 400,000 |
| PHP 800,000 – PHP 2,000,000 | PHP 102,500 + 25% of the excess over PHP 800,000 |
| PHP 2,000,000 – PHP 8,000,000 | PHP 402,500 + 30% of the excess over PHP 2,000,000 |
| Above PHP 8,000,000 | PHP 2,202,500 + 30% of the excess over PHP 8,000,000 |
Employer Payroll Contributions
Employers are required to contribute to their employees’ social insurance accounts, including the Social Security System (SSS), Home Development Mutual Fund (HMDF), Philippine Health Insurance Corporation (Philhealth or PHIC), and Provident Fund. The contribution rates vary, but the total generally ranges up to 11.75%.
- HDMF contribution is a fixed contribution that amounts to PHP 200.00 divided and paid equally by both the employee and the employer.
- Refer to this table to determine your SSS contribution.
- Refer to this table to determine your PHIC contribution in 2023.Monthly Basic SalaryPremium RateMonthly PremiumPHP 10,000.00
4,5%PHP 450PHP 10,000.01 to PHP 89.999,99PHP 450.00 to PHP 4.050,00PHP 90.000,00PHP4.050,00Visit this PHIC page to consult your Philhealth contribution in 2024-2025. - Philippine’s provident fund, Workers’ Investment and Savings Program (WISP), requires a monthly contribution of PHP 425.
Employee Payroll Contributions
Employees are required to contribute to their own social insurance accounts, including the Social Security System, Home Development Mutual Fund, Philippine Health Insurance Corporation, and Provident Fund.Philippine’s provident fund, Workers’ Investment and Savings Program (WISP), requires a monthly contribution of PHP 225 from employees.
The contribution rates vary, but the total generally ranges up to 8%.
What is the minimum wage in the Philippines?
The Philippines sets a rate of minimum wage which applies to employees working in their respective regions:
| Region | Minimum Wage Rate (PHP) |
| NCR | 533.00 – 570.00 |
| CAR | 400.00 |
| Region I | 372.00 – 400.00 |
| Region II | 375.00 -400.00 |
| Region III | 344.00 – 460.00 |
| Region IV-A | 350.00 – 470.00 |
| Region IV-B | 329.00 – 355.00 |
| Region V | 365.00 |
| Region VI | 410.00 – 450.00 |
| Region VII | 382.00 – 435.00 |
| Region VIII | 345.00 – 375.00 |
| Region IX | 338.00 – 351.00 |
| Region X | 378.00 – 405.00 |
| Region XI | 438.00 – 443.00 |
| Region XII | 347.00-368.00 |
| Region XIII | 350.00 |
| BARMM | 306.00 – 341.00 |
What is the payroll cycle in the Philippines?
The standard payroll cycle in the Philippines is monthly or bi-monthly, with pay dates falling on the last day of the month.
It is also compulsory for employers to pay a 13th month salary equivalent to one month’s pay before December 24th.
How long is the working hours in the Philippines?
In the Philippines, a standard work day consists of 8 hours and 1 hour of break. If employees are required to work outside of these hours, they are entitled to overtime pay with a rate set at 125% of their regular pay.
How many leaves are employees entitled to?
- Standard paid time off — employees in the Philippines are entitled to at least 5 days of paid annual leave after the completion of a year of service, which can be turned into leave encashment.
- Compulsory annual public holidays — there are 12 national regular holidays, 6 national special non-working holidays, and 3 special working holidays in the Philippines.
- Minimum paid sick leave — employees in the Philippines are entitled to sick leaves, which falls under service incentive leave.
What are the public holidays in the Philippines?
Here is the list of public holidays in the Philippines for 2023:
| Date | Name |
| 1 Jan | New Year’s Day |
| 2 Jan | New Year’s Day Holiday |
| 25 Feb | People Power Revolution |
| 6 Apr | Maundy Thursday |
| 7 Apr | Good Friday |
| 8 Apr | Black Saturday |
| 10 Apr | The Day of Valor (in lieu) |
| 21 Apr | Eid’l Fitr |
| 1 May | Labor Day |
| 12 Jun | Independence Day |
| 28 Jun | Eid’l Adha |
| 21 Aug | Ninoy Aquino Day |
| 28 Aug | National Heroes’ Day |
| 1 Nov | All Saints’ Day |
| 2 Nov | All Souls’ Day |
| 27 Nov | Bonifacio’s Day |
| 8 Dec | Immaculate Conception of Mary |
| 25 Dec | Christmas Day |
| 30 Dec | Rizal Day |
| 31 Dec | New Year’s Eve |
How long is the maternity and paternity leave in the Philippines?
- Statutory maternity leave — female employees in the Philippines are entitled to up to 105 consecutive days of paid maternity leave and an additional 15 days if they qualify as a single parent. In case of miscarriage or termination of pregnancy, they are entitled to 60 days of leave.
- Statutory paternity leave — male employees in the Philippines’ private sector are entitled to 7 days of paternity leave.
- Statutory parental leave — employees who qualify for single parent leave are entitled to 7 days of leave.
- Other leaves:
Leave For Victims of Violence Against Women and Their Children — women who are victims of violence along their children are entitled to 10 days of leave.
What rights do employees have upon leaving employment due to certain conditions?
Employers can terminate employees for valid reasons such as poor performance or misconduct, but this must be done via providing a legal notice. When an employee’s service with a company is terminated for certain reasons, they are entitled to certain rights and benefits, including:
- Notice period — the minimum notice period for termination is commonly 30 days.
- Severance pay — employees are entitled to mandatory severance pay, which varies based on the length of service and cause for termination.
- Probation period — employees generally have six months of probation period.
What is the type of visa for employees in the Philippines?
In order to be granted an employment visa in the Philippines, the applicant must apply through the Bureau of Immigration (BI).
The Philippines offers a variety of work visa, including Special Work Permit (SWP), Provisional Work Permit (PWP), and Alien Employment Permit (AEP).
Standard VAT Rate
The standard VAT rate in the Philippines is 12%.
Is there a maximum length of contract for employees?
There is no specific maximum length of time for employees to be employed on a contract basis in the Philippines. The length of a contract can varies according to the agreement between the employer and the employee.
What is the retirement age in the Philippines?
Under the Retirement Pay Law, the early retirement age for employees is set at 60 years old. The standard retirement age is 65 years old.