Hyred’s Official Employer Guide on Starting Hiring in the Philippines Now!
Hiring for potential overseas employees may be difficult if you’re unsure of where to begin. But at Hyred, we’ve got you covered. Here’s our official guide on everything you need to know about hiring an employee in the Philippines!
Facts & Stats
The Philippines is the 2nd most populous country in Southeast Asia, yet a low cost of living appeals to its teeming working class and foreign employees. Manufacturing has consistently remained the key sector in driving the Philippine economy. Other sectors on the rise include private services and transportation as well as communication and storage sectors, thanks to the Philippines’ globalisation efforts. It is expected that enterprise architects, data scientists, digital marketers, human resources transformation professionals, and heads of supply chain will increase in demand moving forward.
Employment Details
The primary employment law governing employment relationships in the Philippines is the Philippine Constitution of 1987, which establishes a set of minimum rights and terms for employees who fall under its purview. An employer is compelled to provide equal work opportunities for their employees regardless of sex, racial background, or religion, as per the labor law.
The labour unions in the Philippines consist of the national trade unions, industrial federations, and plant-level unions from private and public sectors. Among these are the Federation of Free Workers (FFW),? Kilusang Mayo Uno (KMU), Sentro ng mga Nagkakaisa at Progresibong Manggagawa (SENTRO), and the Trade Union Congress of the Philippines (TUCP). They are fighting towards decent work for job seekers and job preservation for the employed. Employees may seek their unions for help when they feel that they are unfairly treated or have been non-compliant with their employment terms.
Additionally, like in other countries, the Philippines’s employment laws on worker classification labour and taxes will treat self-employed individuals (independent contractors) and full-time employees differently. Misclassification of an independent contractor in the Philippines may lead to fines and penalties for the offending company.
Pay & Tax
As of July 17, 2024, the National Minimum Wage is 608-645 PHP per day (approx. USD $10-11) for those in the private sector while the minimum monthly wage is 14,190 PHP. As of January 3, 2024, the wage order for a domestic employee is 6,500 PHP. Standard working hours are 8 hours per day for 5 days per week. Working hours cannot exceed 8 hours per day over a 6-workday period, or else all overtime work is to be paid and regulated by the employment contract or collective agreements. Overtime pay on regular working days is calculated as 25% of the employee’s regular salary rate while overtime pay on public holidays is calculated as 30% of the employee’s regular salary rate. Additionally, overtime pay between the night hours of 10pm-6am is calculated as 10% of their pay.
You can also find the following rates for employment taxes and statutory fees below:
Employer Payroll Tax
**All employees covered by their SSS with earnings above PHP 20,000 per month are automatically enrolled, as per legal requirement.
***in PHP
Employee Payroll Tax
领英推荐
Statutory Time Off & Leave Policy
An employee in the Philippines is entitled to two main types of leave: 1) 105 days of paid maternity leave (120 days for single mothers), and 2) 7 days of paid paternity leave for their first 4 children. An additional 30 days of unpaid parental leave can further be requested from their employer. Eligible women are entitled 60 days leave following a miscarriage or emergency termination. While there is no statutory vacation leave or sick leave in the Philippines, all employees are entitled to Service Incentive Leave (five days of paid leave annually) after a year of service. All full time employees are paid for public holidays as well.
Alongside leaves, employee benefits are available as well. Compulsory universal healthcare is funded through payroll taxes. An employer can offer housing, transportation and medical allowances, and supplementary life, disability, and health insurance for an employee as well.
You can also find the official list of upcoming 2025 public holidays for the Philippines below:
Termination & Severance Pay
The termination process in the Philippines is based on the prescribed list of termination reasons that are contained within article 16 of the General Labour Law. An employee can be terminated for justified causes or authorised causes. Notice of termination is often one month. The reasons for each type of cause for which an employee can be discharged from work are as follows:
Justified Causes
Authorised Causes
An employer must give an employee a 30-day, written notice of termination. An employee will be given the opportunity to appeal the decision at a hearing. Pregnant employees or employees on maternity leave cannot be terminated. Additionally, severance pay is not required for termination for a just cause. For authorised causes, the rate of severance pay is 1 month for every year of service. While probationary periods are optional in the Philippines, they are usually capped at 6 months.
Contact Us
The Philippines offers a wealth of potential hiring prospects waiting for the right employer. So if you’re seeking help in hiring and managing top talent in the Philippines, Hyred has the right services for you! With a seamless integration and local legal entity, we take care of compliance matters so that you can start your globalising plan immediately. Visit our Homepage now to set up a free 30-minute consultation for more information!
Related Articles
Check out the previous articles in our SEA Hiring Guides series: