Your quick guide on talent and labor compliance norms in Philippines
Capital
Manila
Currency
Philippine Peso (PHP)
Languages
Filipino, English
Payroll Frequency
Bi-Monthly
GDP per Capita
$3,597
Employer Tax
PHP 45,900
Talent Overview
The Philippines’ dynamic economy is rooted in the country’s labor market. The majority of the Philippine population comprises the young, attracting more foreign investors to venture into the country’s talent pool. Moreover, the Philippines’ archipelagic structure bears a lot of tourist spots for travelers and has contributed to the success of the country’s tourism industry.
Major economic hubs:
Manila, Cebu, Davao, Zamboanga, Cagayan de Oro, Baguio, and Vigan
Skills in demand:
ICT Professionals, Marketing, Creative and Design Professionals, Customer Service Professionals, Sales and Retail Professionals, Logistics and Delivery Professionals
Local Universities
The top local universities in Philippines are as follows:
Local: 1
World : 804
Local: 2
World : 1,245
Local: 3
World : 1,775
Local: 4
World : 1,794
Local: 5
World : 1,828
Salary Data
The following table provides the average salary data in the
Philippines:
| Job Title | Average Monthly Salary (PHP) | Average Monthly Salary (USD) |
| Sales Manager | 75,000 | 1357 |
| Data Scientist | 69,000 | 1248 |
| Accounting Manager | 66,400 | 1201 |
| Project Manager | 48,600 | 879 |
| Mobile Developer | 42,800 | 774 |
Talent Sourcing Tips
Jobstreet, Kalibrr, Indeed, Boss Job, LinkedIn
13,210,000
Robert Walters, Manila Recruitment, Alliance Recruitment Agency
Hiring in the Philippines requires you to be aware of the local employment laws, benefits, payroll, and taxes. Below, are everything you need to know on how to successfully onboard talents from the Philippines.
As a general rule, employment in the Philippines does not require a formal or written contract. A consensual contract may be agreed upon by both parties with the exception of contractors and subcontractors which written contracts are required. Written contracts are generally written in English, however, the employer must provide a Filipino contract if the employee is a Filipino Citizen. This is to clarify points and agreements for the employee under the contract.
All contracts, consensual or written, must adhere to The Labor Code of the Philippines.
The probationary period for employees ranges from 1 – 6 months.
| Date | Name |
| January 1 | New Year’s Day |
| February 10 | Lunar New Year’s Day |
| March 28 | Maundy Thursday |
| March 29 | Good Friday |
| March 30 | Black Saturday |
| April 9 | The Day of Valor |
| April 10 | Eidul-Fitar |
| May 1 | Labor Day |
| June 12 | Independence Day |
| June 17 | Eid al-Adha (Feast of the Sacrifice) |
| August 21 | Ninoy Aquino Day |
| August 26 | National Heroes Day |
| November 1 | All Saints’ Day |
| November 2 | All Souls’ Day |
| November 30 | Bonifacio Day |
| December 24 | Christmas Eve |
| December 25 | Christmas Day |
| December 30 | Rizal Day |
| December 31 | New Year’s Eve |
| Local Holidays | |
| Date | Name |
| February 7 | Lailatul Isra Wal Mi Raj |
| June 18 | Eid al-Adha Day 2 |
| July 8 | Amun Jadid |
| September 16 | Maulid un-Nabi |
| Type of leave | Time period | Mandatory |
| Annual leave/Earned Leave | 5 days | Yes |
| Maternity Leave | 15 weeks | Yes |
*Allotted sick leaves in the Philippines depend on the contract between the employee and employer.
Payroll
Payroll Cycle
Workers are paid twice a month. Paydays are generally once every two weeks and must not exceed 16 days for the second.
Minimum Wage
The minimum wage in the Philippines is 570 PHP per day.
Overtime Pay
Any hours exceeding the regular 8 working hours per day are considered overtime and should get paid at 25% over their standard rate. The rate jumps to 30% when working overtime on a rest day, special or regular holiday.
Bonus
All regular employees are entitled to a 13th-month pay provided that they have worked at least one (1) month during the calendar year. The pay must at least be 1/12 of the total basic salary earned for the year. It must be paid by December 24th.
Full-time employees in the Philippines are ensured to have insurance benefits such as
Taxes
| Type of Contribution | Tax Rate |
| Social Security System (SSS) | PHP 20,400 + PHP 5,100 for PF |
| Home Development Mutual Fund (HDMF) | PHP 1,200 |
| Philippine Health Corporation (PHIC) | PHP 19,200 |
| Type of Contribution | Tax Rate |
| Social Security System (SSS) | PHP 10,800 + PHP 2,700 for PF |
| Home Development Mutual Fund (HDMF) | PHP 1,200 |
| Philippine Health Corporation (PHIC) | PHP 19,200 |
Income tax is levied at a progressive rate on all monthly income as follows:
| Taxable income (PHP) | Tax on column 1 (PHP) | Tax on excess (%) | |
| Over | Not over | ||
| 0 | 250,000 | – | 0 |
| 250,000 | 400,000 | – | 15 |
| 400,000 | 800,000 | 22,500 | 20 |
| 800,000 | 2,000,000 | 102,500 | 25 |
| 2,000,000 | 8,000,000 | 402,500 | 30 |
| 8,000,000 | 2,202,500 | 35 | |
VAT in the Philippines is 12%.
Offboarding & Termination
Letting go of an employee in the Philippines is by no means an easy task. Before you terminate one of your employees, you must follow The Labor Code of the Philippines. You can only dismiss an employee if:
They have behavioral issues such as:
Or the company is retrenching or expanding with the following reasons:
The notice period before termination is up to 3 months for permanent employees and 1 month for probationary employees.
Terminated employees are entitled to a severance pay package adhering to The Labor Code of the Philippines. The computation of the severance pay depends on the cause of termination except relating to behavioral issues.
Visa and Immigration
If you’re looking to work as an expat in the Philippines, there are two primary relevant visas you can acquire. These visas depend on the nature of your contract or dealing with the company.
If you’re looking to work as an expat in the Philippines, there are two primary relevant visas you can acquire. These visas depend on the nature of your contract or dealing with the company.
| 9(g) Pre-Arranged Employee Commercial Visa | Requisite: Alien Employment Permit (AEP)
Validity: Depends on contract or Bureau of Immigration Entitled to multiple entries in and out of the country. Eligible to legitimately work and stay in the country approved by the Bureau of Immigration corresponding to the employment contract. |
| Special Non-Immigrant Visa or 47(A)(2) | Validity: Contract or Term of Office or one (1) year whichever is shorter
Company-specific visa that has less than 5% foreign national workforce. Must be sponsored / petitioned by the employer. |
