Employer of Record (EOR) in
Philippines
Ready to employ talent in Philippines?
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in Philippines to stay compliant from day one.
Language(s)
Currency
Capital
Manila
Population
117.7 M
Public holidays
18 (10 regular + 8 special)
VAT
12%
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in Philippines to stay compliant from day one.
DEFAULT
Indefinite contract
The default and most common arrangement is regular (indefinite) employment, which grants full security of tenure after any applicable probationary period. A regular employee can only be dismissed for a just or authorized cause under the Labor Code, following the required due-process procedure.
Fixed-term contracts are legally recognized (Brent School doctrine) but must be entered into knowingly and voluntarily by both parties on equal footing, without the employer using the fixed term to circumvent security-of-tenure rules. No general statutory maximum duration or renewal cap exists, but abusive successive fixed-term rollovers used to avoid regularization can be reclassified as regular employment by DOLE or the courts.
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in Philippines to stay compliant from day one.
The Labor Code caps normal hours of work at 8 hours per day. A minimum 60-minute unpaid meal break is required, plus a 24-hour rest period after every 6 consecutive working days. Overtime beyond 8 hours/day is paid at 125% of the regular hourly rate (130% for work on a rest day or special non-working day, 200% for work on a regular holiday). Night shift differential for hours worked between 10pm-6am is an additional 10% of the hourly rate.
PROBATION PERIOD
6 months max
Probationary employment may not exceed 6 months from the employee's start date (longer periods apply only for certain apprenticeships/specialized roles by law or CBA); the employer must communicate the reasonable standards for regularization in writing at the time of engagement. Failure to do so generally results in the employee being deemed regular from day one. If not validly terminated, the employee is automatically regularized at the end of the 6-month period.
13TH / 14TH SALARY
Required
Under Presidential Decree No. 851, all rank-and-file employees who have worked at least 1 month in the calendar year are entitled to 13th month pay equal to at least 1/12 of the total basic salary earned during that year, payable in full no later than December 24 (often split into a mid-year and December installment). There is no statutory 14th month pay, though some employers provide it voluntarily or via CBA. 13th month pay up to ₱90,000/year is tax-exempt.
JOB TITLE REGULATIONS
Regulated
No general statutory restriction on job titles, but titles should accurately reflect actual duties since classification (rank-and-file vs. supervisory/managerial) affects overtime eligibility and union-membership rules. Certain regulated professions (e.g., nursing, engineering, accountancy, medicine) require a valid PRC (Professional Regulation Commission) license to use the corresponding professional title.
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in Philippines to stay compliant from day one.
Employer share ≈15% of gross salary: SSS 10.5% (on a monthly salary credit capped at ₱30,000, i.e. up to ~₱3,150/month) + PhilHealth 2.5% (half of the 5% total 2026 premium, on income floored at ₱10,000 and capped at ₱100,000) + Pag-IBIG (HDMF) 2% (on compensation capped at ₱10,000, max ₱200/month). Employers additionally pay a small flat SSS Employees' Compensation fee of ₱10/month (MSC ≤₱14,500) or ₱30/month (MSC >₱14,500).
Employee share ≈9% of gross salary, withheld by the employer: SSS 4.5% (capped MSC ₱30,000) + PhilHealth 2.5% (other half of the 5% premium) + Pag-IBIG 2% (1% only if monthly pay is ₱1,500 or below), capped at a ₱10,000 compensation base.
Figures reflect 2026 statutory minimums published by SSS, PhilHealth (the final scheduled rate step under the Universal Health Care Act, RA 11223), and Pag-IBIG/HDMF (Circular 460). Contribution schedules, salary caps, and brackets are revised periodically by each agency; employers should confirm current tables directly with SSS, PhilHealth, and Pag-IBIG before running payroll.
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Calculate your EOR costsHere's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in Philippines to stay compliant from day one.
Type
Duration
Pay During Leave
Sick leave (days 1-3)
100% (Service Incentive Leave, not statutory sick pay)
90% of average daily salary credit (SSS Sickness Benefit)
90% (SSS), up to 120 days/yr
Up to 2 months (60 days) with full pay following surgery caused by gynecological disorders (RA 9710, Magna Carta of Women)
Special Leave for Women (gynecological)
7 working days per year, paid, for employees certified as solo parents with at least 1 year of service (RA 8972, as amended by RA 11861)
Solo Parent Leave
Up to 10 days paid leave, extendable as necessary, for employee-victims to attend to medical treatment, counseling, and legal proceedings (RA 9262)
VAWC Leave (Violence Against Women and their Children)
1 day paid leave for employees who voluntarily donate blood, available for use within 12 months of the donation (RA 7719, National Blood Services Act)
Blood Donation Leave
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in Philippines to stay compliant from day one.
Statutory Benefits
In addition to statutory leave, employees are entitled to the following statutory benefits:
Philippine employers and employees jointly fund three mandatory social insurance schemes, administered by SSS, PhilHealth, and Pag-IBIG (HDMF).
- SSS (Social Security System): 15% of Monthly Salary Credit (MSC) total for 2026 — 10.5% employer, 4.5% employee. MSC ranges from ₱4,000 to ₱30,000/month.
- PhilHealth (National Health Insurance): 5% of monthly basic salary, split equally: 2.5% employer, 2.5% employee. Salary floor ₱10,000, ceiling ₱100,000 — this is the final scheduled premium step under the Universal Health Care Act (RA 11223).
- Pag-IBIG (HDMF): 2% employer + 2% employee (1% employee if monthly pay is ₱1,500 or below), computed on compensation capped at ₱10,000 (max ₱200/month per party).
Combined, employers contribute roughly 15% and employees roughly 9% of gross salary, subject to the caps above.
WORKPLACE INJURY PROTECTION
Work-related injury, illness, disability, and death are covered by the Employees' Compensation (EC) Program, administered by SSS alongside regular SSS benefits.
- Funded entirely by the employer via a small flat monthly contribution: ₱10/month where the Monthly Salary Credit is ₱14,500 or below, and ₱30/month where it exceeds ₱14,500.
- Benefits include a cash income benefit for temporary or permanent disability, medical services and appliances, rehabilitation services, and a funeral/death benefit for the employee's beneficiaries.
- No employee contribution is required for EC coverage.
Statutory separation pay is owed only for termination due to an authorized (business-related) cause; employees dismissed for just cause (serious misconduct, fraud, etc.) receive no separation pay.
- Redundancy or installation of labor-saving devices: 1 month's pay OR 1 month's pay per year of service, whichever is higher.
- Retrenchment to prevent losses, closure/cessation not due to serious losses, or disease: 1 month's pay OR ½ month's pay per year of service, whichever is higher.
- A fraction of at least 6 months of service counts as one whole year.
- Closure due to genuinely proven serious business losses does not require separation pay.
13th month pay is a mandatory statutory benefit under Presidential Decree No. 851, owed to all rank-and-file employees who have worked at least one month during the calendar year, regardless of employment status or pay method.
- Amount: at least 1/12 of total basic salary earned within the calendar year (total basic salary ÷ 12).
- Must be paid in full no later than December 24 each year; many employers split it into two installments (mid-year and December).
- No statutory 14th month pay exists, though some employers provide it voluntarily or via collective bargaining agreement.
- 13th month pay up to ₱90,000 per year is exempt from income tax.
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in Philippines to stay compliant from day one.
Unfair dismissal
An employee dismissed without just or authorized cause, or without proper due process, is entitled to reinstatement without loss of seniority rights plus full back wages from the time compensation was withheld until actual reinstatement. Where reinstatement is no longer viable (e.g., strained relations), courts award separation pay in lieu of reinstatement — typically 1 month's salary per year of service — in addition to full back wages, and may also award damages and attorney's fees.
Objective / fair dismissal
A dismissal is valid only if grounded in a 'just cause' (employee-related misconduct such as serious misconduct, willful disobedience, gross and habitual neglect of duty, fraud/breach of trust, or a crime against the employer) or an 'authorized cause' (business-related grounds such as redundancy, retrenchment, closure, installation of labor-saving devices, or a disease incurable within 6 months), and only if the employer follows the required due-process procedure (twin-notice rule for just cause; 30-day notice to both employee and DOLE for authorized cause, plus separation pay).
During probation
Terminable for just cause, or for failing written regularization standards; basic due process (notice + opportunity to be heard) applies. Just-cause dismissal follows the same twin-notice, 5-day written-explanation procedure as regular employees.
After probation
Once regularized (automatically after 6 months of probation, or immediately if hired directly as regular), an employee has full security of tenure and can only be dismissed for a valid just cause or authorized cause under the Labor Code, following the applicable due-process procedure. Unjustified termination exposes the employer to reinstatement, back wages, and/or separation-pay liability.
Notice requirements vary by termination ground: resignation and authorized-cause dismissals require 30 days' advance written notice (authorized cause also requires copying the DOLE regional office), while just-cause dismissals follow a twin-notice, 5-day written-explanation due-process procedure rather than a fixed advance-notice period. This summary reflects the Labor Code of the Philippines and DOLE regulations as of 2026; specific facts, CBAs, or company policy may alter obligations, so employers should seek local counsel before acting.
Content last reviewed Oct 2026. Employment laws change fast, always verify critical hiring decisions, and talk to our team of international experts.
