Guide to Hiring Remote Workers in the Philippines

For employers looking to expand their workforce globally, Philippines is one of the first names that comes to mind. The country offers a vast talent pool with high english proficiency, competitive labor costs, and a strong work ethic. However, the process of hiring in a new country can be complex as it requires you to consider several factors from legal framework to finding the right talent.

In this article will walk you through the essentials of hiring remote workers in the Philippines including the ways to hire remote workers, average salaries, estimated total cost as an employer, and more.

Ways to Hire Remote Workers in the Philippines

When it comes to hiring remote workers in the Philippines, companies have several options from setting up a legal entity to using services such as an Employer of Record in the Philippines. Let’s take a look at all of these options in detail:

1. Establishing a Legal Entity

Setting up a local legal entity, such as a corporation or a branch office for a foreign company, is a traditional approach to hiring employees in the Philippines. That means you will register your company in the Philippines, meet all the legal requirements, manage the admin tasks, and ensure legal compliance to be able to hire employees.

Though this approach provides the most control over your operations and employment relationships, it is also time-consuming and expensive. Therefore, it usually makes sense in situations where you plan on expanding your business operations to the Philippines and have a local presence. However, if your goal is to only hire employees in the Philippines, an Employer of Record (EOR) will be a suitable option for you.

2. Employer of Record (EOR)

An Employer of Record service such as RecruitGo acts as the legal employer of your workers in the Philippines, handling all aspects of employment including payroll, benefits, and compliance.

It is a suitable alternative to company registration as it allows you to hire full-time dedicated employees without the need to register a company in the Philippines. You maintain control over day-to-day work-related tasks while the RecruitGo’s EOR ensures legal compliance such as tax deductions, employee benefits, etc as per the labor code of the Philippines.

In situations where companies plan on establishing a local presence in the country in the future, an EOR is often used to test the waters before committing to a legal entity.

You can discuss your needs and goals with our experts by filling out the form below.

3. Professional Employer Organization (PEO)

Similar to an EOR, a professional employer organization hire employees on your behalf. However, it typically requires you to have a local entity. That means, the employees are legally employed by your company while the PEO provides additional HR services.

Due to that, it tends to be more expensive as you have to manage the costs of maintaining a legal entity in addition to service charges for PEOs.

4. Contractors

Engaging workers as independent contractors is another option for companies looking to hire remote talent in the Philippines. This option is suitable for companies looking to hire employees for short term projects as it offers flexibility and lower upfront costs. However, this is not a suitable option if you need remote workers for long term as it comes with the risk of misclassification.

In other words, if your relationship with the contractor is more like an employer-employee relationship while the person is classified as an independent contractor, it can result in severe financial and legal consequences for your company.

You can book a free consultation with our local experts to discuss your plans and we can advise you on a suitable approach to move forward.

What Are the Average Salaries of Remote Employees in the Philippines?

Here’s an approximation of the average yearly salaries for the most commonly hired remote entry-level roles from the Philippines:

For more details on the cost, refer to Cost of hiring employees in the Philippines

Legal Requirements for Hiring Workers in the Philippines

When hiring remote workers in the Philippines, it’s crucial to be aware of and comply with local labor laws. This not just protects your company but also helps to ensures fair treatment of your employees.

Here are the key legal considerations you need to be aware of:

• Minimum Wage: Varies by region and industry. Ensure your compensation meets or exceeds these requirements.
• Working Hours: Standard work week is 48 hours. Beyond this, overtime pay is required.
• Rest Days: At least one rest day per week is mandatory.
• 13th Month Pay: Mandatory for all employees, equivalent to one month’s salary, paid by December 24th each year.
• Leave Entitlements: Such as Service Incentive Leave (SIL), maternity leave, paternity leave etc

For more details on legal requirements and employee benefits, refer to our guide on Employee benefits in the Philippines.

Mandatory Employer Contributions in the Philippines

In addition to these requirements, employers also need to contribute to social benefits for their employees as a part of Mandatory Employer Contributions. These include Philhealth, SSS, and HDMF.

Here is a sample breakdown of the government-mandated contributions you need to make in favor of remote workers if you are paying PHP 60,000 per month (USD 1030) to a remote employee in the Philippines.

Keep in mind that regardless of whether you set up a company in the Philippines or hire through an EOR service, you must make these contributions.

For a more accurate cost assessment, refer to Salary Calculator Philippines

Top Areas to Find Remote Employees in the Philippines 

The Philippines offer modern infrastructure and resources such as co-working spaces, and high-speed internet to favor remote working employees. Based on the availability of these facilities, you should look into the following areas to onboard remote employees from the Philippines.

• Metro Manila
• Quezon City
• Cebu City
• Pampanga
• Baguio City

Most of the country’s top universities are also located in or near the aforementioned cities. There is a general expectation that talent from these regions possesses higher English proficiency and education levels.

Hire Remote Workers in the Philippines with RecruitGo

RecruitGo is an Employer of Record service provider that makes it possible for companies to hire, manage, and pay their remote talent around the globe using a single platform. Once you login to our platform, you can request the new positions, manage the existing employees, process payrolls, offer employee benefits, and much more in just a few clicks.

Book a demo or fill out the form below, and our team will reach out to discuss how we can help you achieve your goals.

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