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Employer of Record Philippines
Hire staff and expand your business in the Philippines with our fully-managed EOR Service
How we can help
Unrivalled Employer of Record Service in the Philippines designed to expand your business seamlessly
Agility EOR delivers services for business’s looking for an Employer of Record in the Philippines. We help clients hire new employees or transfer existing employees into a fully-managed EOR service.
We appreciate that each situation and business is different. That is why our personal approach to Employer of Record Services in the Philippines takes care of all HR, payroll, recruitment and compliance head aches, and allows you to do what you love best – driving your business forward.
Employer of Record in Philippines
A Brief Guide to the Philippines
Nestled in the heart of Southeast Asia, the Philippines is an enchanting archipelago boasting over 7,000 islands. Here, global sophistication blends with raw natural beauty, and a culture steeped in rich history gives the country its unique character. Philippines: where traditions meet tomorrow.
Category | Information |
Location | Southeast Asia |
Capital City | Manila |
Official Languages | Filipino, English |
Area | 300,000 square kilometers |
Population | Approximately 113 million |
Currency | Philippine Peso (PHP) |
Major Cities | Quezon City, Manila, Davao City, Cebu City |
GDP | Approx. $395 billion (2022 estimate) |
Major Industries | Electronics, outsourcing, shipping, real estate, construction, tourism, agriculture |
Business Culture
Business Culture in the Philippines
Doing business in the Philippines is an exercise in building relationships. Filipinos take great pride in their warm hospitality, and this extends to the business environment. Business meetings often start with friendly small talk and personal enquiries as a way of establishing rapport. Punctuality is valued, but flexibility is also appreciated due to the country’s notorious traffic. English is widely used in business transactions, making communication less of a challenge for foreign businesses.
A hierarchical culture dominates Filipino companies with decisions typically made by the top executives. Nevertheless, input from all levels is highly valued, promoting an inclusive workplace environment.
Payroll and Taxes
Payroll and Taxes in the Philippines
In the Philippines it is mandatory to pay employees a 13th month salary. The amount is the equivalent of a months salary, and must be paid before December 24th. Some employers opt to pay this is two parts, with half being paid in June, and half in December.
Employee Taxation
In the Philippines, income tax rates are progressive, with higher income levels subject to higher tax rates.
Taxable Income (PHP) | Tax Rate |
0 – 250,000 | 0% |
250,001 – 400,000 | 15% |
400,001 – 800,000 | 20% |
800,001 – 2,000,000 | 25% |
2,000,001 – 8,000,000 | 30% |
8,000,001 + | 35% |
Employer Taxation
Employers in the Philippines are also responsible for various employer costs, which may include:
Fund Type | Contribution |
Social Security (SSS) | 9.5% (max PHP 1,900 per month) |
Healthcare (PhilHealth, PHIC) | 2% |
Home Development (HDMF) | 2% |
Mandatory Provident Fund (WISP) | Max PHP 900 per month |
Employees’ Compensation Program | Max PHP 30 per month |
Pension and Healthcare
Philippines Pensions
In the Philippines, the main provider of pension benefits is the Social Security System (SSS), a state-run insurance program for private employees, while government employees are covered by the Government Service Insurance System (GSIS). Both schemes are funded by contributions from employees and employers, with the government also providing some support.
However, these public pensions often offer modest benefits. Hence, some employees opt for private pension schemes or personal savings to bolster their retirement nest egg. The private pensions market in the Philippines is steadily growing, offering opportunities for businesses in the financial sector.
Healthcare in the Philippines
Healthcare in the Philippines is a mix of public and private provision. The public system is managed by the Department of Health (DOH) and funded by taxes, contributions from employers and employees, and government allocations.
The PhilHealth, or Philippine Health Insurance Corporation, provides a universal healthcare program aiming to provide affordable healthcare services to all Filipinos. However, the reach of public healthcare can be uneven, with urban areas generally having better access and quality than rural regions.
On the other hand, the private healthcare sector is vibrant and growing. Private hospitals and clinics often offer high-quality care with the latest medical technologies. Many Filipinos, particularly the middle and upper classes, choose private healthcare for its perceived higher quality of service and shorter wait times.
Healthcare can thus be easily accessed, but the quality and cost can vary widely depending on whether you choose public or private providers. Regardless of the choice, AgilityEOR can assist businesses in navigating these complexities, ensuring your team’s health and wellness needs are met in the Philippines.
Employment Law
Employment Law in the Philippines
Relevant Legislation: The Labor Code of the Philippines, enacted in 1974, serves as the primary source of employment legislation. This comprehensive law covers everything from working conditions, employment terms, to benefits and dispute resolution. The Omnibus Rules Implementing the Labor Code further clarifies and provides more detailed provisions of the code.
Employment Contracts: Employment contracts are typically in written form and specify the rights, responsibilities, and duties of both the employer and the employee. These contracts must adhere to the guidelines set forth by the Labor Code and other relevant laws.
Working Hours: Under the Labor Code, the standard workweek is 48 hours, typically spread over six days. For every six days of work, one day of rest is mandatory.
Leave: The Labor Code mandates a minimum of five days of Service Incentive Leave per year for employees who have worked at least one year. Maternity leave of 105 days and paternity leave of seven days are also legally required.
Overtime: Any work performed beyond eight hours a day is considered overtime. Under the Labor Code, overtime is compensated at a rate of 125% of the regular hourly rate on ordinary days, and 130% on rest days and holidays.
Termination: Employee termination procedures are closely regulated by the Labor Code. Just causes for termination include misconduct, willful disobedience, gross negligence, fraud, and breach of trust.
Notice: Employers must provide a written notice to the employee and the Department of Labor and Employment at least one month in advance when terminating an employment contract for just causes, stating the grounds for termination.
Severance Pay: In case of termination due to redundancy, retrenchment, or illness, the Labor Code mandates that the employer provides severance pay equivalent to one month pay or at least one-half month pay for every year of service, whichever is higher.
IMMIGRATION
Work Permits in the Philippines
Immigration in the Philippines is governed by the Bureau of Immigration, a part of the Department of Justice. The process, while being robust and well-structured, can be complex due to the range of visas available for different purposes and durations.
For foreign nationals seeking to work in the country, the first step usually involves securing an Alien Employment Permit (AEP) from the Department of Labor and Employment (DOLE). This permit verifies that no Filipino citizen is available to do the job that the foreigner is being hired for. The application for an AEP includes submission of numerous documents, including a contract of employment, tax identification number, and more.
Next, a working visa must be obtained from the Bureau of Immigration. The most common work visa is the 9(G) Pre-arranged Employment Visa, which is suitable for foreign nationals seeking employment in the Philippines for a period longer than six months. This visa requires a petition from a Philippine-based employer and proof of expertise in a desired profession or industry.
For shorter-term work engagements (less than six months), the Special Work Permit (SWP) may be appropriate. This permit allows foreign nationals to engage in gainful employment in the Philippines and is usually used for professionals providing specialist services or skills.
Additionally, the Philippines offers other visas like the 9(D) Treaty Trader’s Visa for business people from the U.S., Japan, and Germany, and the 47(a)(2) Visa for foreign nationals working on government projects.
All these processes require careful planning and documentation. Delays or rejections can occur if the applications are not prepared or presented correctly. Therefore, having a trusted partner like AgilityEOR, with a deep understanding of the local regulatory landscape, can help streamline the process and ensure a smooth transition for your team into the Philippines.
Public Holidays
Philippines Public Holidays
Holiday | Date |
New Year’s Day | January 1 |
Araw ng Kagitingan | April 9 |
Maundy Thursday | Variable (March-April) |
Good Friday | Variable (March-April) |
Labor Day | May 1 |
Independence Day | June 12 |
National Heroes Day | Last Monday of August |
Bonifacio Day | November 30 |
Christmas Day | December 25 |
Rizal Day | December 30 |
Eid al-Fitr | Variable |
Eid al-Adha | Variable |
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The Benefits
Philippines Employer of Record Benefits
When you choose Agility EOR to expand in the Philippines, we guarantee an Employer of Record Service tailored to the needs of your business
Compliance
We are on top of regulatory changes in the Philippines so you can relax.
Cost reduction
Allow our economies of scale to work in your favour.
High Service Levels
You and your employees have a dedicated account manager.
Fixed Cost Pricing
We will agree our professional fees up front based on your needs - no nasty surprises!
Consolidated Invoicing & Payments
Make one monthly payment to cover all your tax, social and wages costs from one to one thousand employees.
Fast delivery
You can have 'boots on the ground' within days on our infrastructure.
Reduced Risk
All wage taxes are remitted in full to the Philippines authorities by professionals ensuring liabilities are met, giving you peace of mind.
Supply Chain Transparency
We only pay employees through local full employed solutions meaning Philippines payroll tax is paid on all funds.
Save Time and Money
Our expertise is at your disposal. The need for you to have internal HR, Payroll and admin staff is eliminated.