Employee Benefits in the Philippines

Bonuses and additional payments

In the Philippines, the 13th-month pay is a mandatory benefit, equivalent to one-twelfth of an employee’s annual salary, typically paid before December 24 each year. Some companies may also offer performance-based bonuses or mid-year bonuses, though these are not legally required.

Annual leave

Employees in the Philippines are entitled to paid vacation leave after completing one year of service. The statutory entitlement is five days per year, known as Service Incentive Leave (SIL), which can be used for vacation or sick leave. This leave is fully paid and can be taken throughout the leave year, as agreed between employer and employee.  

Additional leave may be offered as part of an employment contract, though it is not required by law. Many employers offer enhanced leave policies to stay competitive and improve retention.  

Unused statutory leave is typically converted to cash at the end of the year or upon termination of employment. Carryover of unused leave is subject to employer discretion.

Sick leave

Personal and sick leave are governed by the Labor Code. Employees who have rendered at least one year of service are entitled to five days of Service Incentive Leave (SIL) per year, which can be used for sickness or vacation. Many employers offer additional paid sick leave beyond the statutory minimum.

Parental leave

Employers must provide seven working days of paid leave annually to solo parent employees, as mandated by the Expanded Solo Parents Welfare Act (RA 11861), to enable them to fulfill parental duties and responsibilities. Employees who have rendered at least six months of service and possess a valid Solo Parent Identification Card are eligible for benefits, with written notice provided within a reasonable period prior to the intended leave.

Additional benefits

In addition to the above, employers are legally required to provide these benefits under Philippine labor laws:

• Social Security System (SSS): Employers contribute 10% of the employee's monthly salary (up to 35,000) to the SSS, while employees contribute 5%. This benefit provides retirement, disability, maternity, sickness, and death benefits.
• PhilHealth: Health insurance premiums are set at 5% of the employee’s basic salary, shared equally between employer and employee. The monthly salary floor is 10,000, and the ceiling is 100,000.
• Pag-IBIG Fund: Both employer and employee contribute 2% of the employee’s monthly salary (capped at 10,000). This savings and housing loan program also offers calamity and multi-purpose loans.

Free public healthcare is available to all Philippine citizens, but many employees still rely on private healthcare providers for faster service. Employers cover a large portion of mandatory benefits, but we can consult with you about optional supplemental coverage options, such as HMO plans or additional insurance. As your employer of record in the Philippines, we may be able to offer cost-effective access to group health and wellness programs.