For businesses operating in the Philippines, understanding and properly providing mandatory employee benefits is essential for both legal compliance and attracting high-quality talent. As an employer, getting this right ensures you avoid penalties while positioning your company as a desirable workplace.
Employee benefits go beyond legal requirements. Since many Filipinos treat work as their second family, as an employer you should be aware of comprehensive benefit packages that employees value.
In this article, we will explore the mandatory employee benefits in the Philippines that employers must offer under the country’s labor laws.
Overview of Mandatory Employee Benefits in the Philippines
As an employer in the Philippines, you are required by law to provide certain employment benefits to your employees such as SSS, PhilHealth, HDMF, etc. These benefits are referred to as statutory employee benefits or mandatory employee benefits in the Philippines. By fulfilling these obligations, you not only stay compliant but also build a loyal and motivated workforce.
Let’s look at the 5 mandatory benefits you have to offer for your Filipino employees:
1. Social Security System (SSS)
The Social Security System (SSS) is a state-run program that provides social insurance to Filipino workers. It covers employees in the private sector, self-employed individuals, and voluntary members.
SSS offers several key benefits, including sickness pay, maternity benefits, disability benefits, pension, and life insurance for the employees. Both you and your employees contribute monthly towards the SSS based on the SSS contributions table.
2. PhilHealth (National Health Insurance)
PhilHealth is a universal health insurance program in the Philippines that covers hospitalization expenses for employees. In accordance with the Universal Health Care Law (Republic Act 11223), significant changes were implemented in 2024. The PhilHealth contribution rate increased from 4% to 5% of the employee’s monthly basic salary, affecting all income brackets. This total contribution is equally divided between the employer and the employee.
The new PhilHealth contribution structure for 2024-2025 is as follows:
| Monthly Salary Range | Contribution Rate | Monthly Contribution Range |
| ₱10,000 | 5% | ₱500 |
| ₱10,000.01 to ₱99,999.99 | 5% | ₱500 to ₱5,000 |
| ₱100,000 | 5% | ₱5,000 |
This update also brought a notable change to the salary ceiling. Previously set at ₱80,000, the new ceiling has been raised to ₱100,000 per month. This means that the maximum monthly contribution is now capped at ₱5,000 (5% of ₱100,000), with both employer and employee each responsible for ₱2,500.
3. Home Development Mutual Fund (HDMF) / Pag-IBIG Fund
The Home Development Mutual Fund (HDMF), popularly known as the Pag-IBIG Fund, is a mandatory savings program that members can withdraw upon retirement, separation from service, or other qualifying conditions.
As per the recent changes, the fixed contribution rates for HDMF are PHP 200 from the employee and PHP 200 from the employer, making a total of PHP 400 per month.
4. 13th-month Pay
The 13th Month Pay is a mandatory benefit that provides an additional month’s salary to employees under the Presidential Decree No. 851. It is equivalent to 1/12 of your employee’s annual salary. All employers must pay this extra month’s salary out on or before December 24 each year. A common market practice is to pay the half amount in June and the other half in December. It is an important financial raise for your employees, distinct from any other incentives.
5. Leaves and Vacation
All employers in the Philippines are required to offer at least 5 days of paid leave to their employees. You are also required to offer various forms of paid leave to your employees —including vacation and sick leave, maternity and paternity leave. Leave policies differ on the employee’s status which we explain below.
Supplementary Benefits
In addition to the mandatory benefits, you can offer supplementary benefits. Hard work and resilience are common traits of the Filipino workforce, so recognizing and rewarding dedication is motivating. Investing in these additional benefits shows that you value your employees more than the other companies.
This will also make your company more competitive in the Filipino job market.
Let’s look at options to make your benefits package truly appeal to your employees:
- Private health insurance/HMO coverage: This provides additional health care services beyond what PhilHealth covers —including outpatient consultations, specialist care, and hospitalization.
- Group life insurance: Providing group life insurance is another valuable benefit you can offer. This insurance ensures that your employees’ families receive financial support in the event of the employee’s death.
- Christmas or Mid-year bonuses: Think of this bonus as a little extra jingle in your employees’ pockets for all the hard work and dedication they’ve shown throughout the year —like a shot of espresso for motivation.
- Paid time off beyond legal requirements: You have the option to provide paid time off beyond the legal requirements —including additional vacation days, personal leave, or mental health days.
- Additional Allowances: Food plays a huge part in Filipino culture. You can also offer meal allowances and transportation subsidies. This alleviates some of your employees’ living expenses.
Leave Policy in the Philippines
As an employer, it’s essential to understand the leave policy rights in the Philippines. First of all, the Philippines doesn’t officially recognize terms such as “sick leave” or “paid vacation”. Instead, there’s a Service Incentive Leave (SIL) which allows the employee to take 5 paid days off per year. However, there are additional leave policies to keep in mind regarding the leave policies in the Philippines.
Finding the balance between honoring traditions is key. Considering the variation in holidays, you should be flexible with employees who may wish to observe local holidays relevant to their region.
If you miss of one of these leave policies, it can lead to legal issues, but more importantly decreased employee morale.
We listed the 5 main leave policies you should look into:
| Maternity Leave | – 105 days of paid maternity leave for all female employees with an option to extend it to 30 more unpaid days (an increase from previous 65 days) – Mothers can allocate 7 of these days to the father of the child as per law |
| Paternity Leave | – 7 days with pay for every married male employee – Applicable for up to 4 deliveries of the legitimate spouse with whom he is cohabiting |
| Single Parent Leave | – 7 working days per year with full pay – For single parents with children below 18 years old – Non-cumulative – Employee must have at least one year of service and must submit a Single Parent ID |
| Magna Carta of Women (MCW) Leave | – Up to 2 months with full pay – For female employees following surgery caused by gynecological disorders – Must be certified by a competent physician – Employee must have at least 6 months of continuous employment service in the last 12 months before surgery |
Offer Employee Benefits through an Employer of Record (EOR)
By choosing RecruitGo as your EOR partner in the Philippines, you can enjoy peace of mind, operational efficiency, and cost savings. We bring expert knowledge of local labor laws and regulations, guiding on managing employee benefits.
This way, your company remains compliant and competitive in the Philippine job market.
Let’s break down what RecruitGo offers for you:
1. Compliance with Mandatory Contributions: We handle the calculation and timely submission of the mandatory contributions, reducing the risk of fines and penalties for non-compliance.
2. Efficient Management of Paid Leave: We track leave balances, handle leave requests, and ensure compliance with local labor laws.
3. Simplified Payroll Processing: We manage payroll processing —accurate and timely payment of salaries, bonuses, and benefits. This means that we handle the 13th-month pay and any other bonuses or allowances your company offers.
4. Handling HR Matters: Whether you need background checks for potential employees or want to provide laptops to your new employees, RecruitGo can take care of that for you.
Contact us for a free EOR consultation and discover how we can simplify your entry into the Philippines. To get started, fill out the form below to set up a consultation with one of our specialists!
