Hire in Philippines

Employer of record in the Philippines

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in the Philippines, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in the Philippines - often in as little as two weeks - without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll, and benefits requirements for workers in the Philippines and how our employer of record service, EOR, and local HR experts can help you manage your international employment needs.

Hiring in the Philippines

Top companies from around the world have seen the benefits of hiring in the Philippines, but the country's labor laws can be complex. Employment relationships in the Philippines are governed by the Labor Code of the Philippines, various statutes, and judicial precedents, as well as collective and individual contracts. The labor code encompasses numerous regulations established by the Department of Labor and Employment (DOLE) and other relevant agencies.​

Additionally, Philippine law regulates the use of contractual workers through provisions in the Labor Code and related statutes. Employers are required to adhere to regulations regarding the hiring of contractual employees, ensuring compliance with labor standards and providing necessary benefits.​

Because of the complexity of employment laws in the Philippines, compliant employment contracts are an essential business need. With Safeguard Global as your partner, you can employ workers in the Philippines with confidence, knowing that every contract for every worker meets all requirements. We can also provide you with guidance about cultural norms and hiring best practices and keep you up to date with employment regulations as they change.​

Employment contracts in the Phillipines

In the Philippines, employment contracts can be fixed-term or permanent, depending on the nature of the job and the agreement between the employer and employee. Permanent employment contracts must include benefits such as social security (known as the Social Security System, or SSS), health insurance (PhilHealth), housing fund (Pag-IBIG), paid leave, and other statutory benefits. Fixed-term employees are entitled to the same benefits as permanent employees, provided they meet the eligibility requirements set by law.​

The Philippines also recognizes apprenticeship agreements, mainly for training purposes, which are governed by the Labor Code. Employers engaging apprentices must provide structured training in line with approved curricula, pay apprentices a stipend in line with government regulations, ensure apprentices are part of a safe working environment, and keep apprentices to regular working hours.

Probationary period

In the Philippines, probation periods are defined by the Labor Code and must not exceed six months from the employee’s start date. The probation period allows employers to evaluate performance, fitness, and qualifications for the role. If the employee continues working beyond six months without being regularized, they are automatically considered a regular employee. During the probation period, either party may terminate the contract with a valid reason and proper notice, and employees are entitled to statutory benefits such as social security, health insurance, and leave accrual.

Termination and notice periods

Philippine labor law outlines clear rules regarding termination, notice periods, and severance rights. Employers must give written notice before terminating an employee, or provide pay in lieu of notice. The standard requirements include:

• 30 days' written notice to both the employee and the Department of Labor

• Due process including notice and hearing for just cause terminations

Valid reasons for dismissal include:

• Just cause (serious misconduct or neglect of duty)

• Authorized cause (redundancy, retrenchment, or business closure)

• Health-related inability to perform duties

Separation pay may be due in authorized cause cases, typically equivalent to one month’s salary or half month per year of service, whichever is higher.

As your EOR in the Philippines, Safeguard Global helps manage the termination processes and ensure compliance with local labor law.

Working hours

The standard workweek in the Philippines is typically Monday through Friday, with eight hours per day, totaling 40 hours per week. Employees are prohibited from working for more than eight hours a day without appropriate compensation.​

Any work beyond eight hours a day is considered overtime, and employees are entitled to an additional compensation of at least 25% over their regular hourly rate. For work performed on rest days or special holidays, the overtime pay rate is higher, as specified by the Labor Code.

Pay and benefits

When negotiating the terms of an employment contract with a candidate in the Philippines, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company's benefits strategy.​​

Minimum wages and salary benchmarks

• Minimum wage rates in the Philippines vary by region. As of early 2025, the National Capital Region (NCR) has a daily minimum wage of ₱645 PHP, while other regions range from ₱316 PHP to ₱560 PHP, reflecting local economic conditions and cost of living. ​
• Wage adjustments are determined by the Regional Tripartite Wages and Productivity Boards, considering factors such as poverty thresholds and prevailing wage rates.​
• The overall annual average salary in the Philippines is approximately ₱537,000 PHP, with monthly earnings varying significantly by position, experience, and region. The median monthly salary is estimated to be around ₱20,583 PHP. ​
• By gender, a wage gap exists with average annual salaries for men typically exceeding those for women. Efforts to reduce this disparity continue through targeted government initiatives and policy reforms.

Looking at salary by location in the Philippines

• Metro Manila: Known for offering salaries above the national average, particularly in sectors such as finance, technology, and healthcare.​
• Cebu City: Offers competitive compensation in industries like business process outsourcing (BPO), tourism, and information technology, with wages generally reflecting the local cost of living.​
• Davao City: While salaries in Davao are competitive, certain sectors may offer compensation slightly below the national average, influenced by regional economic factors.​

As your employment partner in the Philippines, Safeguard Global can provide you with the latest resources and insights on average employee compensation across various roles and regions, ensuring that you make competitive and compliant employment offers.

Payroll frequency

In the Philippines, semi-monthly salary payments are the most common, primarily for salaried employees such as white-collar professionals, government workers, and corporate employees. These salaries are usually paid on the 15th and the last day of the month. The Labor Code mandates that wages be paid at least once every two weeks or twice a month at intervals not exceeding 16 days.​

In addition to regular wages, annual payments are made for bonuses and incentives, benefiting corporate employees, government workers, and public sector unit (PSU) employees.

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.​

Employee benefits and paid leave in the Philippines

When negotiating terms of an employment contract with a candidate in the Phillipines, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Employee benefits

Employers are legally required to provide several benefits under the Philippines' labor laws.

• Social Security System (SSS): Employers contribute 10% of the employee's monthly salary (up to ₱35,000 PHP) 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 PHP, and the ceiling is ₱100,000 PHP.

• Pag-IBIG Fund: Both employer and employee contribute 2% of the employee’s monthly salary (capped at ₱10,000 PHP). This savings and housing loan program also offers calamity and multi-purpose loans.

• 13th-month pay: Employers are required to provide a 13th-month salary to all rank-and-file employees. This is equivalent to one-twelfth of the employee’s total basic salary earned within a calendar year. It must be paid on or before December 24.

Free public healthcare is available to all Filippino 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.

Tax and social contributions

Income tax and employee deductions

In the Philippines, withholding tax is known as Withholding Tax on Compensation and is deducted by employers before paying salaries to employees. Employers must deduct this tax from employee salaries based on applicable income tax brackets and submit it to the Bureau of Internal Revenue (BIR). ​​

Employer payroll contributions

The Philippines' Social Security System requires employer contributions that are dependent on the total number of employees, and these contributions cover pensions, medical care, disability insurance, and gratuity payments. In addition, workers' compensation is financed by contributions from state governments, employers, and employees.

Business tax and compliance

Employers in the Philippines must adhere to various taxation and regulatory compliance requirements to operate legally and avoid penalties.​

• Corporate tax: Domestic corporations are taxed at 25%. However, corporations with net taxable income not exceeding ₱5 million PHP and total assets not exceeding ₱100 million PHP (excluding land) are taxed at 20%. ​
• Value added tax (VAT): VAT applies to businesses with annual gross sales exceeding ₱3 million PHP. Employers must register, file monthly or quarterly returns, and pay VAT on applicable goods and services. ​
• Withholding tax: Employers must deduct withholding tax from employee salaries, vendor payments, and contractor fees. Taxes withheld must be remitted by the 10th of the following month, and periodic returns must be filed. ​
• Income tax returns (ITR): ITRs are filed annually based on company profits. Companies must also file annual financial statements with the Bureau of Internal Revenue (BIR).

Work visas and immigration

Programs for foreign workers

In the Philippines, hiring foreign nationals without valid work authorization can lead to fines, legal consequences, or deportation. The government prioritizes the hiring of Filipino workers and requires employers to prove that a role cannot be filled locally. Therefore, strict rules apply when employing foreign nationals, who must first secure an Alien Employment Permit (AEP) from the Department of Labor and Employment (DOLE), and a Pre-arranged Employment Visa (9(g)) from the Bureau of Immigration. Foreign professionals may work in the Philippines under one of two permits.

• Alien Employment Permit (AEP): Issued by DOLE, this certifies that no local worker is available for the job. It is generally valid for one to three years and renewable. Employers must publish a labor market test to demonstrate that the position cannot be filled locally.
• 9(g) Pre-arranged Employment Visa: After securing the AEP, the employer sponsors the visa with the Bureau of Immigration. This visa allows the foreign worker to legally reside and work in the Philippines. It is initially valid for one year and can be extended up to three years.
• Short-term business visits may be covered under the 9(a) Temporary Visitor’s Visa, which does not permit employment.

Sponsorship and employer responsibilities

Hiring a foreign national requires compliance with immigration, labor, and tax regulations. The sponsoring employer (or EOR) must adhere to rules that cover eligibility and documentation.

Eligibility criteria

• Confirm that the foreign applicant possesses specialized skills not readily available in the local workforce.
• Publish the job opening to satisfy the labor market test.
• Submit an employment contract, company registration documents, and the applicant's credentials to DOLE and the Bureau of Immigration

Required documentation

• Valid passport with at least six months remaining.
• Signed employment contract specifying job role, salary, and duration.
• Company registration and endorsement letter.
• Certified copies of educational and professional qualifications.
• Alien Employment Permit (AEP)
• Completed visa application forms and passport photos.

Post-arrival requirements

• Alien Certificate of Registration (ACR I-Card): All foreign nationals issued a 9(g) visa must apply for an ACR I-Card with the Bureau of Immigration.
• Annual reporting to the Bureau of Immigration is required for foreign residents between January and March.
• Update records for address changes, contract renewals, or end of employment.

Processing times and costs

Once a person has applied for a Philippine employment visa, the processing time varies, but it typically ranges from two to three weeks for the Alien Employment Permit (AEP), and an additional two to three months for the 9(g) Pre-Arranged Employment Visa. ​

The fees for an Employment Visa vary based on the type of visa. For example:​

• AEP (1 year): ₱9,000​ PHP
• 9(g) Visa: ₱10,000 PHP​

Additional fees, such as the Alien Certificate of Registration (ACR) I-Card and express processing charges, may apply. Check with the specific Philippine consulate or embassy for the most accurate and up-to-date fee structure.

Leave and public holidays

Annual leave and paid time off

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.​​

Public holidays

Employees in the Philippines are entitled to the following paid holidays:

• New Year’s Day
• Maundy Thursday
• Good Friday
• Bravery Day
• Labor Day
• Independence Day
• Christmas Day
• Rizal Day

Every year the government announces several special holidays, which are unpaid days off and may change from year to year.

These might include any of the following:

• Chinese New Year
• End of Ramadan
• Festival of Sacrifice
• Ninoy Aquino Day
• National Heroes Day
• All Saints Day
• Bonifacio Day
• Christmas Eve
• Last Day of the Year

The Philippines recognizes holidays that are categorized either as regular holidays or special (non-working) days.

Holidays that fall on a weekend are moved to the next regular workday. Employees required to work on a regular holiday are entitled to 200% of their daily wage for the first eight hours.

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.

Hiring and talent management

Commonly recruited roles

Global companies operating in the Philippines frequently hire for positions that leverage the country’s skilled labor force, especially in customer support, shared services, and technology. The most commonly recruited roles include:

• Customer support representatives: Handle inquiries for global clients
• IT support specialists: Provide technical solutions across multiple time zones
• Software developers: Skilled in web and mobile application development
• Accountants and bookkeepers: Manage financial records and compliance
• HR and admin coordinators: Support internal operations and workforce management
• Digital marketers: Optimize online presence and branding
• Virtual assistants: Perform administrative and back-office tasks

As your employer of record in the Philippines, we can help you access the local talent pool and fill critical roles with qualified, English-speaking professionals.

Languages

The Philippines is a multilingual workplace environment, with English, Filipino, and regional languages used across industries. While English dominates corporate settings, Filipino is widely spoken in government and business sectors, particularly in Luzon and Metro Manila. Workplaces often operate in a bilingual or multilingual manner, depending on the industry and region.​

In corporate sectors like IT and finance, English is the primary language for communication, documentation, and client interactions, especially in multinational companies. Meetings, presentations, and official emails are generally conducted in English, though employees may use Filipino or regional languages informally.​

In government offices and public sector organizations, Filipino and regional languages are commonly used for internal communication and documentation. The Philippines recognizes Filipino and English as official languages, with regions prioritizing their local languages—such as Cebuano in Cebu, Ilocano in Northern Luzon, and Hiligaynon in Western Visayas.​

The manufacturing and retail sectors rely on local languages for daily operations, especially in labor-intensive industries. Factories, warehouses, and construction sites primarily use Filipino or regional languages, while management-level communication may be in English.​

In customer service, language use depends on clientele. English and Filipino are common for domestic and international customer support, while many companies also hire speakers of Cebuano, Ilocano, Hiligaynon, and other regional languages to cater to regional customers.

Education level

The Philippines boasts a dynamic and evolving workforce, supported by a comprehensive academic and vocational education system.

Many professionals also hold industry-recognized certifications or postgraduate qualifications. Key academic backgrounds include:

- Engineering and technology

- Business and economics

- Information and communication technologies

- Health sciences

- Social sciences and humanities​

Vocational education and training play a crucial role in preparing individuals for technical and skilled professions. The Technical Education and Skills Development Authority (TESDA) is the Philippines' primary public institution for vocational training, offering programs across various professions and combining classroom instruction with practical workplace training. These institutions provide education at multiple levels, including technical and technological programs.​

Graduates from the Philippines' esteemed universities and vocational institutions are widely available across sectors, offering a diverse and skilled talent pool for employers.

Recruitment trends and hiring considerations

The Philippine job market in 2025 reflects strong demand in digital transformation, healthcare, renewable energy, and skilled trades. Technology, BPO, and business services remain core drivers of hiring, while hybrid and remote work models continue to shape recruitment strategies.​

Labor shortages in IT, nursing, and construction are influencing training initiatives and government-backed employment programs. Employers increasingly seek candidates with digital competencies, multilingual abilities, and role-specific certifications.​

Cultural considerations include a preference for formal job applications, structured onboarding processes, and clear contractual agreements. As your local partner, we can help you navigate the Philippines' hiring practices, salary expectations, and legal requirements - ensuring a compliant and efficient recruitment process in the Philippines.​

Workplace culture and business practices

Workplace norms and professional etiquette

Workplace culture in the Philippines blends strong traditional values with a growing adoption of modern business practices. Respect for hierarchy, loyalty, and interpersonal harmony are central themes, though global companies often introduce more collaborative norms. Business communication typically strikes a balance between formality and approachability.

Hierarchy and authority: While leadership typically drives key decisions, employees are encouraged to follow structured channels of communication and show deference to senior roles. Teamwork is common, but managers are looked to for final approval and strategic direction.

Email and phone etiquette: Business emails and phone calls are expected to be courteous and well-structured. Emails usually begin with a polite greeting and end with a formal sign-off such as "Best regards" or "Respectfully yours". On calls, brief small talk is considered polite before transitioning into business topics.

Meeting etiquette: Punctuality is appreciated, though meetings may start a few minutes late. Small talk is typical at the beginning of meetings to build rapport. Handshakes are standard in formal introductions, and addressing colleagues with honorifics like “Sir” or “Ma’am” is still widely practiced.

Professional dress code: In corporate offices and professional services, business attire is expected - such as collared shirts, slacks, and conservative dresses. In BPOs, startups, or tech settings, business casual or smart casual is often acceptable.

Typical working hours and business customs

The standard workweek in the Philippines generally consists of eight hours per day, or 40 hours per week, in accordance with the Labor Code. Employees are typically scheduled Monday through Friday, though retail and service sectors may include weekends. Flexible work arrangements, including compressed workweeks, shifting schedules, and telecommuting, are permitted under DOLE’s Department Order No. 202, Series of 2019. The pandemic accelerated the adoption of hybrid and remote work setups, particularly in the BPO and tech industries. Employers are encouraged to adopt flexible work policies that support work-life balance, without compromising compliance with wage, safety, and timekeeping rules.

Key HR challenges and compliance risks

Navigating employment in the Philippines involves compliance with national labor laws, which are administered by the Department of Labor and Employment (DOLE). These include regulations on minimum wage, overtime, holiday pay, occupational safety, and social security contributions. The labor landscape is also influenced by regional wage boards that periodically adjust minimum wage levels.

Noncompliance with labor regulations can result in administrative penalties, lawsuits, or business suspension. Employers must stay informed about changes in tax policies, mandatory contributions (SSS, PhilHealth, Pag-IBIG), and evolving employee entitlements such as maternity leave and flexible work arrangements. Proactive HR management and legal consultation are key to mitigating compliance risks.

Professional employer organization (PEO) vs. employer of record (EOR) in the Philippines

What is a PEO in the Philippines?

A Professional Employer Organization (PEO) in the Philippines is a third-party service provider that enters into a co-employment arrangement with businesses. In this model, the PEO shares employer responsibilities, managing various human resources functions such as payroll processing, benefits administration, compliance with local labor laws, and other HR-related tasks. This partnership enables companies to outsource essential employment duties while retaining certain legal obligations.

Challenges with a PEO model

While a PEO can streamline HR operations, the co-employment nature of this model means that the client company still holds some legal liabilities. Businesses may need to establish a local legal entity, manage tax filings, and oversee aspects of employee benefits. In contrast, an employer of record (EOR) assumes full legal responsibility for employment, allowing foreign companies to hire in the Philippines without setting up a local entity. The EOR manages payroll, taxation, compliance with labor laws, and statutory benefits, thereby reducing administrative burdens and legal risks.

EOR as an alternative to PEO

For companies aiming to expand into the Philippines swiftly while minimizing complexities related to local compliance and administrative overhead, partnering with an employer of record (EOR) can be an optimal solution. Often referred to as a global PEO, an EOR enables businesses to onboard employees efficiently - sometimes within days - without needing to establish a legal entity. This approach facilitates streamlined market entry, mitigates legal risks, and alleviates the challenges of managing payroll, taxes, and compliance in a new jurisdiction.

Entity setup in the Philippines

Setting up a local entity

While employers of record (EORs) provide a quick entry into the Philippines, establishing a legal entity is essential for companies planning large-scale operations, direct hiring, and full market control. The decision depends on growth plans, industry regulations, and cost considerations. Safeguard Global can help you assess your growth plan and objectives and find the solution that best meets your needs. We're the only provider that grows with you.

Entity registration steps and timelines

Establishing a legal entity in the Philippines requires several steps, each involving specific documentation and regulatory approvals. The process begins with selecting an appropriate business structure, such as a corporation, and reserving the company name with the Securities and Exchange Commission (SEC). Applicants must provide identification documents, proof of address, and details of the incorporators and directors. ​

Next, companies must prepare key incorporation documents, including the articles of incorporation and by-laws, which outline the company's objectives and internal governance structure. These documents are submitted to the SEC for registration. ​

After registration, businesses must obtain a tax identification number (TIN) from the Bureau of Internal Revenue (BIR) and register for applicable taxes. Depending on the nature of the business, companies may also need to secure a Barangay Clearance, Mayor's Permit, and other licenses or permits. ​

The entire incorporation process in the Philippines typically takes between four to six weeks, depending on the completeness of documentation and the efficiency of the relevant authorities.

Comparing EOR vs. entity setup

While EOR is a faster, low-risk option for market entry and small teams, entity setup is better for long-term operations and larger workforce expansion.

When an EOR might better suit your needs

Quick hiring: Ideal for rapidly onboarding employees (within one to two weeks).

Simplified compliance: Avoids the complexities of setting up and managing a legal entity.

Market testing: Useful for testing the Philippine market before committing long term.

Flexibility: Best for companies planning to hire fewer than 50 employees or needing operational agility without significant upfront investment.

When an entity setup might be more suitable

Long-term operations: Offers full business control for companies planning long-term expansion.

Local contracts and assets: Enables signing contracts, opening bank accounts, and owning assets in the Philippines.

Scalability: More cost-effective when hiring 50+ employees as EOR costs may become unsustainable.

Regulated industries: Essential for sectors that require local business registration and strict compliance.

Intellectual property protection: Provides better legal protection under Philippine law.

Global workforce solutions

HR & Benefits solutions in the Philippines

Safeguard Global can manage employee benefits administration, enrollment in government-mandated programs (SSS, PhilHealth, Pag-IBIG), and optional private health coverage. We ensure employees receive their full entitlements under Philippine labor law and provide local HR expertise to support retention and satisfaction.

Tax & Accounting solutions

We ensure accurate payroll tax filings, income tax withholding, and employer compliance with BIR deadlines. We also handle government-mandated contributions, year-end tax forms (2316), and financial reporting support.

Global Payments & Payroll Processing

We support multi-currency payroll processing and disbursement for both local hires and expatriates. We ensure on-time salary payments, bonus distributions, and government contributions, while maintaining full compliance with local payroll laws and currency regulations.

Updated: May 2025

Partner with Safeguard Global as Philippines employer of record and PEO

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on EOR, our employer of record solution, to expand and hire in 187 countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in the Philippines. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.

Disclaimer: The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.