The Philippines
The Philippines is an excellent, and wildly popular, place to hire people. But if you’re not acquainted with the local labor laws, it can get confusing, fast. Fortunately, we are acquainted with those labor laws. On this page, we’ll teach you how to hire in The Philippines—without spending thousands of dollars on EOR fees and legal red tape:
Country snapshot
CURRENCY
Philippine Peso (PHP)
EMPLOYER TAXES
11.46%
PAYROLL FREQUENCY
Bi-Monthly
OFFICIAL LANGUAGE
Filipino, English
It’s the fastest way to hire globally
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It’s a lot cheaper
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
It’s more flexible for you & your team
Can be less risky than hiring employees
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
Some people want to be employees
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
You might not have as much control over your talent
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
Laws about hiring are complicated, and the same is true in The Philippines. But there are ways to sidestep the headaches—if your company hasn’t already established a physical presence in The Philippines, you have two real options when it comes to hiring. We’ll detail both below.
Hire talent as contractors
Hire talent as employees
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in The Philippines than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in The Philippines.
Employer tax
Employer Contributions
- 11.46%
Paid Time Off (PTO)
Every employee who has worked for a minimum of one year is entitled to five days of leave. These days can be taken as a holiday or sick leave.
If the leave is not used by the end of the year, employees can receive money to cover the unused days.
Public Holidays
There are 21 holidays with 9 non-working holidays.
Sick Days
Every employee who has worked for a minimum of one year is entitled to five days of leave. These days can be taken as a holiday or sick leave.
Maternity Leave
Post childbirth, the following applies:
105 days of leave if the employee has paid at least three monthly contributions within the 12-month period before the birth.
Mothers who gave birth to twins or triplets are not entitled to any additional maternity leave.
The mother can file her maternity benefits for up to 10 years.
In the event of a miscarriage, the following applies:
60 days of leave
The employee has paid at least three monthly contributions within the 12-month period before the miscarriage.
The leave will be paid by the employer who can later request reimbursement from Social Security.
Paternity Leave
Seven days of full pay to all married male employees in the private and public sectors for the first four deliveries of the legitimate spouse with whom they are cohabiting.
Parental Leave
Single parents are permitted to take additional leave of 7 working days per year with full pay and benefits.
Other Leave
None.
Marriage Leave
None.
Bereavement Leave
None.
Termination Process
An employee may be terminated for just and authorized causes as per Labor Code and for any serious violation of company rules and regulations or the commission of further infractions or violations of the Code of Conduct.
Notice Period
Employees must provide a minimum of 30 days notice.
Severance Pay
Severance pay or separation pay shall only apply if the employee was terminated by the employer (not resigned) for authorized causes. The employee will receive up to 1 month’s salary multiplied by their length of service per year.
Probation Period
The maximum length of a probationary period shall be six months. Once the probation period is completed, the employment contract becomes permanent.
Working Hours
Working hours are a maximum of 8 hours per day 6 days a week.
Overtime
Persons whose work is supervisory or managerial are specifically excluded from the overtime pay.
On regular days, all hours worked above the standard 8 hours a day must be compensated by providing a daily salary plus a minimum of 25% additional pay.
On Special holidays, all hours worked above the standard 8 hours a day must be compensated by providing the daily salary plus a minimum of 30% additional pay.
On legal holidays, all hours worked above the standard 8 hours a day must be compensated by providing double the daily salary.
%5B1%5D.avif)
Run your global workforce on autopilot with Thera
Book a demo to get started.