RecruitGo’s comprehensive
guide to hiring in the
Philippines
RecruitGo’s employer handbook will give you all the key insights for hiring professionals in the Philippines market
Download our Employer Handbook!
Minimum Wage Requirements
Minimum compensation standards vary by region in the Philippines. There is no standardized national minimum wage. The specific minimum wage is determined based on the region where the employer’s company is registered.
For RecruitGo, which operates in the National Capital Region (NCR), the minimum monthly compensation is set at PHP 14,006.57.
Personal Income Tax Structure
Individual income tax in the Philippines follows a progressive rate system, ranging from 0% to 35%. The applicable tax rates are based on the gross annual income and may vary depending on factors such as household status and the number of dependents.
Gross Annual Income and the Tax Rate (%)
- Up to PHP 250,000 Tax Rate is 0%
- Up to PHP 400,000 Tax Rate is 20%
- Up to PHP 2,000,000 Tax Rate is 30%
- Up to PHP 8,000,000 Tax Rate is 30%
- Up to PHP 800,000 Tax Rate is 25%
- Above PHP 8,000,000 Tax Rate is 35%
Employer Expenses
The estimated employer cost in the Philippines is typically around 10.57% of the employee’s salary. Contributions to the Philippine Health Insurance Corporation (PhilHealth) are capped at PHP 1,600 per month, while Social Security contributions are capped at PHP 2,880 per month.
- Philippine Health Insurance Corporation (PhilHealth): 2%
- Social Security: 8.57%
- Home Development Fund (HDMF): PHP 100
Overtime Compensation & Maximum Hours
In the Philippines, regular working hours are set at 8 hours per day, totaling 40 hours per week, typically from Monday to Friday.
Overtime pay is required by law and cannot be included in the regular salary. Employees are entitled to the following rates for hours worked outside the standard schedule:
- 125% of the hourly rate on regular working days
- 130% of the hourly rate on holidays
Maternity Leave
Expectant employees who have completed 90 consecutive days of work are eligible for 105 days of fully paid maternity leave. An extra 15 days of paid leave are granted for qualified solo parents. Of the total leave, 14 days must be taken before childbirth, while the remaining days can be taken after. During this period, the employee will receive 100% of their average salary, with Social Security handling the payments.
Additionally, the employee has the option to extend their leave for an additional 30 days without pay.
Paternity Leave
Employees are granted seven calendar days of fully paid paternity leave, to be taken after the birth of the child. During this period, the employee will receive 100% of their average salary, and the employer will cover the expenses.
Additionally, the employee has the option to extend their leave without pay.
Parental Leave
The Philippines does not have specific legislation for parental leave. However, employees may be eligible for maternity leave and paternity leave. Single parents can also avail benefits under the Solo Parent Policy.
Sick Leave
In the Philippines, sick leave is not provided separately from vacation allowance (PTO). Employees are required to submit sick leave requests through the RecruitGo.
If an employee exhausts their vacation days and requires additional time off due to illness, it will be considered unpaid leave. Eligible employees may be entitled to reimbursement through the Social Security System (SSS)’s sickness benefit, which provides a portion of their regular pay, similar to maternity benefits.
Employee Termination Procedures
Terminating an employee in the Philippines requires adherence to specific regulations and employment terms. The employer takes charge of the off-boarding process in collaboration with key stakeholders, which may involve additional fees and specific procedures based on the termination circumstances.
Termination can be carried out for authorized causes in accordance with the Labor Code, and written notice must be provided by the employer.
Notice Requirement
Employers in the Philippines are required to provide a minimum notice period of 30 days to employees. The notice period can be extended based on the employer’s discretion and specific circumstances.
Severance for Employees
Severance pay is determined based on the cause of termination and ranges from 0.5 to 1 month’s wages per year of employment.
- Fair dismissal: 30 days of salary per year of service up to 12 months of compensation.
- Reduction from the employer: 15 days of salary per year of service up to 12 months of compensation.
RecruitGo implements a Severance Accrual to protect against financial risks associated with terminations. Our calculation aligns with local regulations and best practices. Unused amounts are returned if the employee resigns or is not eligible for severance.
Paid Time Off
Full-time employees enjoy 5 days of annual paid time off (PTO). PTO accrues at a rate of 0.42 days per month after completing 12 months of work. Unused holidays can be compensated at the end of the year.
Part-time employees do not have leave entitlements.
Public Holidays
The Philippines celebrates both 18 national and 3 regional holidays based on the location of the employee. There are an additional 8 special holidays that are non-working days.
National public holidays include:
- New Year’s Day
- Araw ng Kagitingan (Day of Valor)
- Maundy Thursday- Good Friday
- Independence Day
- National Heroes Day
- Christmas Day
- Bonifacio Day
- Rizal Day
Special Non Working Days:
- EDSA People Power Revolution Anniversary
- Black Saturday
- Ninoy Aquino Day
- All Saints’ Day
- All Souls’ Day
- Feast of the Immaculate Conception of Mary
- Last Day of the Year
Onboarding
Our streamlined onboarding process is completed within 3 business days.
To ensure a smooth start, employees are required to submit all necessary documents before their designated start date. Mandatory document submission is not allowed after the start date, while optional documents can be submitted later. Our team will handle the enrollment of employees with SSS (Social Security System) and PHIL Health before their start date.
Employment Contract Details
Our employment contracts are available in English and can be bilingual upon request. They are written documents that require signatures from both parties.
Key elements included in our contracts are:
- Full Name of the employee
- Start date of employment
- Duration of the employment
- Detailed job description
- Termination conditions and provisions
Probation Period
While probation periods are not compulsory, we offer a standard probation period of 90 days with a maximum duration of 180 days (six months). Please note that fixed-term contracts do not include probation periods
Schedule a call with a RecruitGo consultant
- Tell us about your plans
- We’ll reach out to you to discuss your options