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Asia expansion playbook / Philippines
Country guide
Hiring in the Philippines
Hire with or without a local entity. Pay, contributions, permits, leave and tax for 2026, in one place.
- 01You can hire without your own entity.An Employer of Record (EOR) employs your hires for you from day one. Many companies start this way.
- 02Budget for a 13th month, paid by 24 December.Rank-and-file employees get it on top of SSS, PhilHealth and Pag-IBIG contributions.
- 03Foreign hires need an AEP and a work visa first.Plan for a labor market test and several months of processing.
The Philippines at a glance
Three ways to hire in the Philippines
Your first hire, step by step
- 01
Write the job description
Set out the role, responsibilities and requirements. A clear scope attracts the right applicants.
- 02
Advertise the role
Post on the job boards and networks your candidates use.
Foreign hires: labor market test - 03
Screen and interview
Shortlist candidates and interview for skills, experience and team fit.
- 04
Offer and contract
Put salary, benefits, start date, hours, probation and confidentiality terms in writing.
Foreign hires: AEP and work visa - 05
Onboard
Register your hire with SSS, PhilHealth and Pag-IBIG, confirm their Tax Identification Number (TIN) and run induction.
What it costs to employ someone here
Where the caps kick in. SSS stops rising at a PHP 35,000 salary credit, Pag-IBIG at PHP 10,000 and PhilHealth at PHP 100,000. Above that, only the 13th-month accrual grows with salary.
About PHP 709,760 a year
Estimate on 2026 rates. Excludes overtime, allowances, benefits and insurance.
What you're legally on the hook for
Work permits for foreign hires
- Your hire needs an approved Alien Employment Permit (AEP) before they start work.
- They also need a work visa, usually the 9(g) pre-arranged employment visa.
- The AEP is tied to your company and the specific role.
Labor market test: DOLE checks that no qualified Filipino is available and willing to do the role before it approves an AEP.
Central processing: since 9 June 2026, DOLE's central office handles all AEP applications, not regional offices.
Leave you must provide
- Employees earn 5 days of paid service incentive leave after 1 year.
- Mothers get 105 days of paid maternity leave. Fathers get 7 days of paternity leave.
- Regular holidays are paid, even when employees don't work.
Ending employment
- Employees who resign give at least 30 days' written notice.
- For authorized causes, like redundancy, give the employee and DOLE 30 days' notice.
- Authorized causes also need separation pay.
Just causes (such as serious misconduct or neglect of duty): follow the twin-notice rule. Give a written notice of the charges, a chance to respond, then a written notice of your decision.
Authorized causes: give 30 days' written notice to the employee and to DOLE.
Release final pay within 30 days of separation. Issue a certificate of employment within 3 days of the employee's request.
Working hours and overtime
- Normal working hours are up to 8 hours a day.
- Overtime is paid at an extra 25% on ordinary working days.
- Night work between 10 pm and 6 am earns at least an extra 10%.
Working hours: up to 8 hours a day, with at least 1 rest day after every 6 consecutive working days.
Overtime: an extra 25% of the hourly rate on ordinary days, and an extra 30% on rest days and special days.
Holiday work: 200% of the daily rate for work on a regular holiday.
Who is covered: rank-and-file employees. Managerial employees are exempt.
Contracts and records
- Probation can last up to 6 months. After that, employees become regular.
- Pay wages at least twice a month, no more than 16 days apart.
- Keep payroll and employment records for at least 3 years.
Contracts typically cover job title and duties, pay and benefits, hours and leave, termination and notice, and confidentiality and non-compete clauses.
Probation: share the standards for regularization at the start. Employees who continue past 6 months become regular employees.
Personal data: under the Data Privacy Act, collect employee data for clear purposes, keep it secure, and respect employees' rights to access and correct it.
Social insurance and work injury
- SSS covers sickness, maternity, disability, retirement and death.
- Employees' Compensation covers work-related injury and illness, fully employer-funded.
- PhilHealth covers hospital costs for employees and their dependents.
SSS sickness and maternity benefits: you advance the benefit to your employee, then claim it back from SSS.
Employees' Compensation (EC): employers pay PHP 10 or PHP 30 a month per employee, depending on salary. Employees pay nothing.
PhilHealth: coverage extends to the employee's qualified dependents.
Pag-IBIG: a national savings program that gives members access to housing loans.
What non-compliance costs
How payroll actually runs
Contributions and filing
- SSS: employers pay 10% and employees 5%, on salary credits up to PHP 35,000.
- PhilHealth: 5% of basic salary, split equally, on salaries up to PHP 100,000.
- Pag-IBIG: 2% each, capped at PHP 200 a month per side.
Register new hires with SSS, PhilHealth and Pag-IBIG, and pay contributions monthly on each agency's schedule.
13th-month pay: at least one-twelfth of the basic salary earned in the calendar year, paid to rank-and-file employees by 24 December.
Tax
- Employers withhold income tax from salary every month.
- Give employees their annual tax certificate (BIR Form 2316) by 31 January.
- 13th-month pay and other benefits are tax-free up to PHP 90,000 a year.
Monthly withholding: deduct tax from each employee's salary, then file and pay it to the Bureau of Internal Revenue (BIR) every month.
Resident tax rates are progressive, from 0% on the first PHP 250,000 of annual taxable income to 35% above PHP 8 million.
Annual reporting: issue BIR Form 2316 to each employee and file your annual information return by 31 January.
Substituted filing: employees with one employer, whose tax was withheld correctly, generally don't file their own return.
What to have in place
- Hiring a foreign national? Start the AEP early. DOLE runs a labor market test to confirm no qualified Filipino is available for the role.
- Register your company with the SEC, BIR, SSS, PhilHealth and Pag-IBIG, and get your local business permits. Hiring through an EOR? The EOR handles this.
- Classify workers carefully. Contractors doing the work of regular employees can be deemed employees, with back pay and benefits owed.
Philippines hiring questions we get asked
Do I need Filipino officers to set up a corporation?
Some of them, yes. Your corporate secretary must be a Filipino citizen living in the Philippines, and your treasurer must live in the Philippines. Foreign-owned companies selling to the local market also need minimum paid-up capital. Many companies hire through an EOR while they set up.
Do I have to pay a 13th-month bonus?
Yes. Rank-and-file employees get at least one-twelfth of their basic salary for the year, paid by 24 December. It is tax-free up to PHP 90,000 when combined with other bonuses and benefits.
Is there a minimum wage in the Philippines?
Yes, and it varies by region. 17 regional wage boards set it by region and sector. In Metro Manila, the non-agriculture rate is PHP 755 a day from 26 September 2026.
Can I move employees from an EOR onto my own entity later?
Yes. Your entity becomes the employer, so you issue new contracts, register with SSS, PhilHealth, Pag-IBIG and BIR, and apply for new AEPs and visas for foreign staff. Agree up front how service length and leave balances carry over.
How long does it take to hire a foreign national?
Plan for several months. The AEP comes first, including the labor market test, then the 9(g) visa with the Bureau of Immigration. A Provisional Work Permit can let your hire start while the visa is processed.
Can I hire contractors instead of employees?
Yes, for genuine project work. Contractors invoice you and handle their own tax. If the role looks like employment, with set hours, supervision and ongoing work, they can be deemed employees, with back pay and benefits owed.
Talk to us
Plan your first hire in the Philippines
30 minutes with someone who has set up teams in the Philippines. Bring your headcount and timeline. We only demo the product if you ask.
Sources: DOLE · SSS · PhilHealth · Pag-IBIG Fund · BIR · Bureau of Immigration · NWPC. Rates checked September 2026. General guidance, not legal or tax advice.
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