Hire Employees in the Philippines Without Setting Up a Company
The Philippines is RecruitGo's home market. Our team here handles employment contracts, payroll, SSS, PhilHealth, Pag-IBIG, and every compliance requirement so you can hire Filipino talent in as fast as 3 business days.
What Is an Employer of Record in the Philippines?
An Employer of Record (EOR) is a locally registered company that legally employs workers in the Philippines on your behalf. RecruitGo's Philippine entity becomes the legal employer. We sign the employment contract, register employees with SSS, PhilHealth, and Pag-IBIG, withhold and file income tax, and manage all reporting required by DOLE (Department of Labor and Employment) and the BIR (Bureau of Internal Revenue).
You retain full control over the employee's work, schedule, and responsibilities. They report to you, work on your projects, and function as part of your team. We handle every legal and administrative obligation that Philippine labor law places on the employer.
Without EOR: Registering a domestic corporation in the Philippines requires SEC registration, BIR registration, local government permits, and typically takes 4 to 8 weeks with setup costs of PHP 100,000 or more. See full EOR vs entity comparison →
Who Should Use EOR in the Philippines?
What It Costs to Hire Through EOR
The Philippines has one of the most cost-effective employment structures in Southeast Asia. Your total cost has three components: the employee's gross salary, mandatory statutory contributions, and the EOR management fee.
| Component | Monthly (PHP) | Rate |
|---|---|---|
| Gross salary | 40,000 | — |
| SSS (Social Security) | ~3,500 | ~10% (capped) |
| PhilHealth (health insurance) | ~1,000 | 2.5% |
| Pag-IBIG (housing fund) | 200 | Fixed max |
| 13th month pay provision | ~3,333 | 8.33% |
| Total loaded cost (before EOR fee) | ~48,033 | ~120% |
* SSS contributions are based on the Monthly Salary Credit bracket. PhilHealth rate is 5% total, split equally. Pag-IBIG employer share is PHP 100 to 200. EOR management fee starts from $49.99/month and is not included above.
How this compares: Total employer cost in the Philippines is roughly 18 to 22% above gross salary (including 13th month provision). This is lower than Indonesia (30 to 40%), Vietnam (20 to 25%), or Colombia (35 to 45%), making the Philippines one of the most cost-efficient EOR markets.
How Hiring Works Through EOR
You tell us the role, salary range, location, and start date. We confirm compliance requirements and provide a cost breakdown within 24 hours.
We draft a DOLE-compliant employment contract, register the employee with SSS, PhilHealth, and Pag-IBIG, and set up BIR tax withholding. If it is a probationary hire, we document clear performance standards as required by law.
We run payroll on the standard Philippine semi-monthly cycle (1st to 15th and 16th to end of month). We calculate withholding tax, remit all government contributions, and distribute payslips. 13th month pay is provisioned monthly and disbursed by December.
Philippine labor regulations evolve through DOLE department orders, regional wage board updates, and legislative changes. We monitor everything and adjust your employees’ arrangements accordingly.
EOR vs Entity vs Contractors
| EOR | Own Entity | Contractor | |
|---|---|---|---|
| Time to first hire | 3 business days | 4 to 8 weeks | Immediate |
| Setup cost | None | PHP 100K+ | None |
| Ongoing admin | Handled by EOR | Your responsibility | Minimal |
| Compliance risk | Handled by EOR | Your responsibility | High |
| Employee protections | Full (SSS, PhilHealth, 13th mo) | Full | None |
| Best for | 1 to 20 people, speed, testing | 30+, permanent ops | Short-term projects only |
Contractor warning: Philippine labor law applies a “four-fold test” to determine employment relationships: selection and engagement, payment of wages, power to dismiss, and power to control conduct. If you control how the work is done (not just what gets done), the person is an employee under the law. DOLE can reclassify contractors retroactively, triggering back pay for 13th month, SSS, PhilHealth, Pag-IBIG, and separation pay.
Contract Types in the Philippines
Philippine labor law distinguishes several employment categories. Understanding which applies matters because each carries different rights, protections, and termination rules.
Regular Employment
The default under Philippine law
Probationary Employment
Up to 6 months before regularization
Fixed-term / Project-based
Must be tied to a specific project or period. Cannot be used to circumvent regularization. Courts scrutinize these closely.
Seasonal Employment
For work that is seasonal in nature (agriculture, tourism). Employees retain regular status for the duration of each season.
The probation trap: If an employer fails to communicate clear, reasonable performance standards at the start of probation, the employee is deemed regular from day one. This is one of the most common compliance mistakes foreign companies make. Your EOR ensures performance standards are documented in the employment contract before the employee starts.
Income Tax
The Philippines uses a progressive income tax system. Employers are required to withhold tax from each payroll run and remit to the BIR (Bureau of Internal Revenue). Payroll in the Philippines runs semi-monthly, which means two pay periods per month.
| Annual taxable income (PHP) | Rate |
|---|---|
| Up to 250,000 | 0% |
| 250,001 to 400,000 | 15% of excess over 250K |
| 400,001 to 800,000 | PHP 22,500 + 20% of excess over 400K |
| 800,001 to 2,000,000 | PHP 102,500 + 25% of excess over 800K |
| 2,000,001 to 8,000,000 | PHP 402,500 + 30% of excess over 2M |
| Over 8,000,000 | PHP 2,202,500 + 35% of excess over 8M |
Employees earning PHP 250,000 or less annually are effectively tax-exempt. The first PHP 90,000 of 13th month pay and other benefits (the “de minimis” threshold) is also tax-exempt. Your EOR calculates withholding on each semi-monthly payroll, files with the BIR, and issues BIR Form 2316 to employees at year-end.
SSS, PhilHealth & Pag-IBIG
Every employer in the Philippines must register employees with three mandatory government programs. Your EOR handles registration, monthly calculation, remittance, and reporting for all three.
| Program | What it covers | Employer share | Employee share |
|---|---|---|---|
| SSS (Social Security System) | Sickness, maternity, disability, retirement, death, unemployment | ~10% (capped at PHP 3,500 based on MSC) | ~5% (capped at PHP 1,750) |
| PhilHealth | National health insurance | 2.5% of salary (capped at PHP 2,500) | 2.5% of salary (capped at PHP 2,500) |
| Pag-IBIG (HDMF) | Housing fund, provides home and multi-purpose loans | PHP 100 to 200/month | PHP 100 to 200/month |
SSS contributions follow a Monthly Salary Credit (MSC) schedule with brackets. The maximum MSC is currently PHP 35,000, capping the employer contribution at approximately PHP 3,500. PhilHealth contributions are 5% of salary split equally, with a cap based on a salary ceiling of PHP 100,000. Pag-IBIG contributions are a flat PHP 100 to 200 for both employer and employee.
Late remittance penalties: SSS charges 2% per month on late contributions. PhilHealth and Pag-IBIG also impose penalties and interest. Your EOR ensures all contributions are calculated and remitted on schedule each month.
Employee Benefits and Leave Entitlements
Mandatory benefits
Common additional benefits
Beyond mandatory minimums, competitive employers in the Philippines typically offer:
Termination Rules and Separation Pay
Philippine labor law provides strong protections against dismissal. Termination must fall into one of two categories, each with different procedural requirements and financial obligations.
Just Causes (Art. 297)
Termination due to employee fault. Requires the “twin notice” rule: a notice to explain, a hearing or opportunity to respond, and a notice of decision.
Authorized Causes (Art. 298-299)
Termination for business reasons. Requires 30 days written notice to both the employee and DOLE.
Due process is non-negotiable. Even if the grounds for termination are valid, failing to follow the correct procedural steps can result in the employer being ordered to pay nominal damages or even reinstate the employee with back wages. Your EOR manages the full termination process, including documentation, DOLE notice requirements, and final pay computation.
Regional Minimum Wages
The Philippines does not have a single national minimum wage. Rates are set by Regional Tripartite Wages and Productivity Boards and vary significantly by region and industry sector.
| Region | Daily rate (non-agriculture) | Approx. monthly |
|---|---|---|
| NCR (Metro Manila) | PHP 645 | ~PHP 14,029 |
| Region III (Central Luzon) | PHP 468 to 533 | ~PHP 10,177 to 11,590 |
| Region IV-A (CALABARZON) | PHP 471 to 573 | ~PHP 10,245 to 12,463 |
| Region VII (Central Visayas) | PHP 443 to 468 | ~PHP 9,635 to 10,179 |
| Region XI (Davao) | PHP 415 to 446 | ~PHP 9,026 to 9,701 |
| BARMM (Bangsamoro) | PHP 336 to 390 | ~PHP 7,309 to 8,483 |
Monthly estimates based on 21.75 working days. These are legal minimums. Competitive salaries for skilled roles (customer support, developers, finance) are significantly higher. Metro Manila salaries for experienced professionals typically start at PHP 30,000 to 60,000+.
Working Hours, Overtime & Night Differential
Standard working hours are 8 hours per day, up to 48 hours per week (for a 6-day workweek). Most office-based roles follow a 5-day, 40-hour schedule.
| Scenario | Rate |
|---|---|
| Overtime (regular day) | 125% of hourly rate |
| Overtime (rest day or special holiday) | 130% of hourly rate |
| Regular holiday work | 200% of daily rate |
| Special non-working holiday | 130% of daily rate |
| Night differential (10 PM to 6 AM) | Additional 10% of hourly rate |
| Rest day work | 130% of daily rate |
The Philippines has approximately 18 to 20 public holidays per year, split between regular holidays (paid even if the employee does not work) and special non-working holidays (no work, no pay unless covered by company policy). Your EOR tracks holiday pay, overtime, and night differential automatically.
Frequently Asked Questions
RecruitGo's EOR management fee starts from $49.99/employee/month. On top of that, you pay the employee's gross salary plus statutory contributions (SSS, PhilHealth, Pag-IBIG totaling roughly 15 to 18% of salary) and 13th month pay provision (8.33%). For a PHP 40,000/month role, total loaded cost before EOR fee is approximately PHP 48,000.
Typically 3 business days from signed agreement to the employee's first day. The Philippines is our fastest market for onboarding. This compares to 4 to 8 weeks for setting up your own entity.
No. RecruitGo's Philippine entity becomes the legal employer. You do not need to register a corporation, branch, or representative office. You can start hiring immediately.
If the employee meets the performance standards documented in their contract, they become a regular employee with full security of tenure. If they do not meet standards, they can be terminated before the 6-month mark with proper documentation. Failing to define standards upfront means the employee is regular from day one. Your EOR ensures this is handled correctly.
Yes. All rank-and-file employees in the Philippines are entitled to 13th month pay, equivalent to 1/12 of their total basic salary earned during the year. It must be paid no later than December 24. There is no exception for foreign employers or EOR arrangements.
You can for genuinely independent work. But Philippine courts apply a strict four-fold test to determine the real nature of the relationship. If you control how the work is done, it is employment regardless of the contract label. DOLE can reclassify retroactively with back pay for all statutory benefits.
For just causes (misconduct, negligence), no separation pay is required but due process must be followed. For authorized causes (redundancy, retrenchment), separation pay ranges from 1/2 month to 1 month salary per year of service. Final pay including proportional 13th month and unused leave is always owed.
De minimis benefits are small employer-provided perks that are tax-exempt up to certain limits. Examples include rice subsidy (PHP 2,000/month), clothing allowance (PHP 6,000/year), and laundry allowance (PHP 300/month). Structuring compensation to include de minimis benefits can reduce the employee's tax burden.
Yes. Many of our Philippine employees work aligned to US, Australian, or European time zones. Philippine labor law requires night differential pay (additional 10%) for work performed between 10 PM and 6 AM. Your EOR calculates this automatically.
