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What should I know about hiring in the Philippines?
When hiring in the Philippines, there are several key factors to keep in mind. Firstly, understanding local labor laws and ordinances is crucial, especially those governing minimum wage standards, working hours, and employee benefits.
Furthermore, because Filipinos place a high value on personal ties and trust, it is essential to forge strong bonds and keep lines of communication open with prospective employees.
In addition to minimum wage and benefits, an employer may attract and retain talented workers by providing possibilities for professional growth and scheduling flexibility. Finally, to promote a respectful and inclusive workplace, you should be aware of the wide range of cultural and religious practices in the Philippines.
Why is the Philippines a good choice for finding remote employees?
The Philippines is a great place to look for remote workers for a number of reasons. First, a sizable portion of the population is proficient in English, which facilitates communication for global corporations.
In addition, Filipinos have a reputation for having a strong work ethic that values flexibility and adaptation as well as prioritizing the satisfaction of their customers.
The Philippines is also in the same time zone as many Western countries, making international cooperation easier. Furthermore, the government of the Philippines encourages and rewards the outsourcing sector by creating favorable conditions for businesses.
How can Native Teams help you hire in the Philippines
If you’re having trouble finding qualified workers due to language challenges, cultural norms, or governmental restrictions, Native Teams can help. Our expert team is available to provide assistance and support throughout all of our Employer of Record services, including dealing with local laws and regulations, cultural differences, and language barriers.
Hire your first Filipino employee with Native Teams.
Legal requirements for hiring in the Philippines
Minimum wage
The national minimum wage in the Philippines is determined by sector and industry:
- Non-Agriculture: 375 PHP;
- Service or retail employing 11 employees or more: 375 PHP;
- Service or retail employing less than 11 employees: 345 PHP;
- Agriculture and cottage/handicraft: 345 PHP.
Contributions & taxes
Employer tax
Total employment cost is 13.50% + 425 PHP.
Corporate tax
The corporate income tax rate is 25%.
Employee tax
The total employee cost is up to 9.50%+225 PHP.
Income tax
The 3% tax was reduced to 1% under the CREATE Law from July 1, 2020, to June 30, 2023. Taxpayers will therefore be required to pay the initial tax rate of 3% as of July 1, 2023.
To calculate the salary and taxes in the Philippines please click here.
Payroll cycle
Employers in the Philippines must make payments twice a month at a maximum gap of 16 days due to the bi-monthly nature of the payroll cycle.
Is there a 13th salary in the Philippines?
According to Philippine legislation, all companies must provide their employees with a 13th-month salary, but no later than December 24th.
Labor rules
Probation period
In the Philippines, permanent employees must go through a 6-month probationary period. After completing the probationary period, the employment agreement will become permanent.
Notice period
The legislation requires a minimum of 30 days’ notice.
Severance period
If the employer initiates the termination for legal reasons, severance compensation will be provided at the rate of one month’s salary for each year of service.
Working hours
An employee’s regular hours of labor must not exceed 8 hours per day, excluding the 1-hour daily lunch break.
Leave and benefits
Public holidays
There are 18 regular holidays in the Philippines. These include the following:
- New Year’s Day
- Chinese New Year
- People Power Revolution
- Maundy Thursday
- Good Friday
- Black Saturday
- The day of Valor
- Labor Day
- Eid’L Fitr
- Independence Day
- Eidul Adha
- Ninoy Aquino Day
- National Hero’s Day
- All Saints’ Day
- Bonifacio Day
- Immaculate Conception Day
- Christmas Day
- Rizal Day
Sick leave
Employees who qualify for Service Incentive Leave (SIL) receive 5 annual paid vacation days. These days can be utilized for vacation or sick leave. Employees are eligible for SIL after one year of service with the company.
Maternity leave & Paternity leave
All female employees with a year of service or more receive 5 paid days off per year, which can be applied to maternity leave. Furthermore, the worker is eligible for 105 days of additional paid maternity leave after the due date. The number of paid leave days is doubled to 120 for single mothers.
After the birth of a child, the father is entitled to 7 days of paid leave.
Other leave
Parental leave
Employees who are single parents are entitled to a maximum of 7 working days of paid parental leave per year to fulfill their parenting obligations. To qualify, the individual must have worked for the company for a full year.
What are the minimum vacation days?
In order to be eligible for annual leave, which is equal to 5 days annually, an employee must have served for at least one full year.
Insurance
Health security & private insurance
Anyone who has worked for an employer for at least three months within the previous 15 months is entitled to free medical and dental care through the Social Security Administration.
*Native Teams can support you in finding the best private insurance in the country. Contact us and we will send a comparison of insurance packages and prices.*
Visa
Relocation and work permits
Native Teams will apply for your work visa in the nation on your behalf and serve as your Employer of Record. All the required documents can be uploaded using our app. Until you have your work and residency visa, Native Teams will support you by providing you with frequent information on the progress.
How long is the visa/work permit process?
2 to 4 weeks depending on the authorities and provided documents.
Which documents do you need?
To apply for a visa/work permit in the Philippines, upload the documents from our onboarding list (relocation to log in/pricing).
Why use Native Teams for hiring in the Philippines?
Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:
- No paperwork: We will handle all the necessary paperwork for you.
- Save on taxes: We help you handle your taxes.
- No company set up: You can expand your business using our company entitles.
- Online onboarding: We’re here to ensure your onboarding process is trouble-free.
- No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
- Increase your profit: We assist you in growing your business and maximizing your profits.
- Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
- Local support: We can assist you in understanding and complying with the relevant local laws.
