Cost to Hire Remote Workers in the Philippines with EOR

Hiring remote workers in the Philippines is an attractive proposition for businesses, providing access to a skilled, English-proficient workforce at competitive rates. However, base salaries are just one part of the equation. Social contributions, statutory benefits, 13th-month pay, and overtime pay can all add significantly to the total cost of employment. As such, it is essential to consider these factors when budgeting and planning.

Components of Cost When Hiring via EOR in the Philippines

Aside from the gross salary, employers must account for several mandatory contributions and additional costs when hiring through an Employer of Record (EOR). Understanding these components allows you to comply with Philippine labor laws and pay your employees in the Philippines.

A. Employer’s Social Contributions and Mandatory Benefits

Employers are responsible for remitting statutory contributions and providing mandatory benefits for their employees in the Philippines, which include:

• SSS (Social Security System): 9.5% of employee salary, capped at PHP 1,225 per month.
• PhilHealth: 5% of salary split equally with the employee, with the employer’s share capped at PHP 2,500 per month.
• Pag-IBIG Fund: 2% of salary, capped at PHP 100 per month.
• 13th-Month Pay: Equivalent to 1/12 of the annual basic salary (8.3%), often spread across the year or paid as a lump sum in December.
• Overtime Pay: Required for hours worked beyond standard work hours, rest days, and holidays, calculated according to Philippine labor law.

B. Employer of Record (EOR) Fee

The EOR fee typically covers payroll processing, compliance, contract management, onboarding, offboarding, and other associated legal obligations. With RecruitGo, the EOR fee is set at 10% of the employee’s gross salary, with a maximum cap of USD 250 per month. Many EORs use a percentage-based fee structure similar to this, with variations in rate and maximum monthly cap.

Common Roles and Salary Ranges in the Philippines

When hiring remote workers in the Philippines, salaries vary widely depending on the role and level of experience. Entry-level positions typically have lower starting salaries, while specialized or senior roles command higher pay. Understanding these ranges is crucial for budgeting and attracting the right talent for your remote team.

Minimum Wage in the Philippines by Region

In the Philippines, minimum wage is set daily, not monthly, and remote workers remain subject to local minimum wage laws depending on how the employment relationship is structured. Compliance is generally required when:

• The employee is physically residing and working in the Philippines.
• The employee is hired under a Philippine employment contract, even via an EOR.
• Certain sectors, such as agriculture, or other special categories, have distinct minimums or exceptions outlined under specific wage orders.

For remote or skilled roles, compensation is usually benchmarked above the minimum wage to attract and retain qualified talent. This reflects market demand, role complexity, and experience level.

Full Cost Examples Using An EOR

Using an EOR allows employers to consolidate all employment costs, including statutory contributions, mandatory benefits, overtime, and administrative fees, into a clear, predictable monthly figure. The following examples illustrate how these components combine to determine the total cost of employing staff through an EOR.

Example 1: Entry-Level Virtual Assistant

Gross Salary: USD 517 (~PHP 30,000)

Employer Contributions: USD 60 (~PHP 3,500)

EOR Fee (10% of gross salary): USD 52 (~PHP 3,000)

Total monthly cost to employer: USD 629 (~PHP 36,500)

Example 2: Mid-Level Digital Marketing Specialist

Gross Salary: USD 1,034 (~PHP 60,000)

Employer Contributions: USD 121 (~PHP 7,000)

EOR Fee (10% of gross salary): USD 103 (~PHP 6,000)

Total monthly cost to employer: USD 1,259 (~PHP 73,000)

Example 3: Senior Software Engineer

Gross Salary: USD 2,586 (~PHP 150,000)

Employer Contributions: USD 310 (~PHP 18,000)

EOR Fee (10% of gross salary, capped at USD 250): USD 241 (~PHP 14,000)

Total monthly cost to employer: USD 3,138 (~PHP 182,000)

Legal and Regulatory Factors to Consider When Hiring in the Philippines

Employers hiring in the Philippines must ensure full compliance with local labor laws and regulations, a task that is simplified with an Employer of Record like RecruitGo, handling payroll, statutory contributions, and compliance management.

Key obligations include:

• Accurate remittance of social contributions to SSS, PhilHealth, and Pag-IBIG.
• Compliance with minimum wage rates and provision of mandatory benefits such as 13th-month pay, maternity, and paternity leave.
• Overtime pay and holiday pay are calculated according to labor regulations.
• Employment contracts that are accurate, complete, and aligned with Philippine labor law.

Failure to meet these obligations can lead to significant risks:

• Late or underpayment of contributions can result in fines, interest, and additional back payments.
• Misreporting wages or benefits can trigger labor audits.
• Improper or incomplete employment contracts can result in disputes or claims.
• Non-compliance with statutory requirements may lead to labor complaints, penalties, or litigation.

Hire Remote Workers in the Philippines with RecruitGo

Managing the varying payroll costs, compliance requirements, and contribution rates for employees in the Philippines can be complex if you’re unfamiliar with the market. RecruitGo’s Employer of Record (EOR) service simplifies this process and ensures full compliance with Philippine labor laws.

Our EOR service includes:

• Payroll Management: Handle salary processing and withholdings monthly to ensure timely payments for employees with accurate remittance to government agencies.
• Statutory Compliance: Managing 13th-month pay, leave entitlements, along with SSS, PhilHealth, and Pag-IBIG contributions. 
• HR Administration: Employee onboarding and offboarding, maintaining accurate employment records, and providing support for any employment-related issues.
• Scalable Hiring: Allows you to add or remove employees quickly without establishing a local entity, as well as hiring single employees or building an entire remote team.

Ready to hire remote talent in the Philippines with confidence? Explore how our EOR experts can simplify payroll, compliance, and HR administration to grow your team efficiently.