Country Payroll Guide Philippines

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Key Facts

Capital
Manila
Date format
mm/dd/yyyy
Currency
Philippine Peso (PHP)
VAT
the standard rate is 12%

Contributions

Employers

Social Security
Social Security - 8%
Health Insurance
Health Insurance - 1.75%
Home Development Mutual Fund
Home Development Mutual Fund - 2%
Provident Fund
Provident Fund - 425PHP
Total Employment Cost
Total Employment Cost - 11.75% + Provident Fund

Employees

Social Security
Social Security - 4%
Health Insurance
Health Insurance - 1.75%
Provident Fund
Provident Fund - 225PHP
Home Development Mutual Fund Pag-IBIG
Home Development Mutual Fund Pag-IBIG - 1% to 2%
Total Employee Cost
- 6.75% to 7.75% + Provident Fund

Minimum Wage

Minimum Wage
The minimum wage in Philippines is 537 PHP per hour.

Payroll

Payroll Cycle
Monthly
13th Salary

The amount is equivalent to 1/12 of the basic salary received by an employee during the year.

Income Tax

Employee Income Tax (1)
0 – 10,000 PHP - 5%
Employee Income Tax (2)
10,000 – 30,000 PHP - 10%
Employee Income Tax (3)
30,000 – 70,000 PHP - 15%
Employee Income Tax (4)
70,000 – 140,000 PHP - 20%
Employee Income Tax (5)
140,000 – 250,000 PHP - 25%
Employee Income Tax (6)
250,000 – 500,000 PHP - 30%
Employee Income Tax (7)
500,000 PHP and above - 32%

Working Hours

General Working Hours

8 hours per day.

Overtime

Work may be performed beyond eight hours a day provided that the employee is paid for the overtime work, which consists of an additional compensation equivalent to his regular wage plus at least 25% thereof.

Leave

Paid Time Off

5 days after a minimum of one year of service.

Public Holidays

21 days.

Sick Days

5 days of paid ‘service incentive leave’, which can be used for vacation or sick leave.

Maternity Leave

105 days paid leave for female employees who have made at least three monthly Social Security System (SSS) contributions within 12 months before giving birth.

Paternity Leave

7 days of paid leave for married male employees.

Parental Leave

7 days of paid leave for employees with a Solo Parent Identification Card and have rendered one year of continuous service.

Termination

Termination Process

The dismissal of an employee in the Philippines is a sensitive stage and can only be implemented by a ‘just’ or ‘authorized’ cause, as defined under the Labor Code.

Notice Period

By law, one month notice period is mandatory. In some cases, it can be longer than 30 days if agreed by you while signing the employment contract.

Severance Pay

Up to one month salary multiplied by they length of service per year; only applicable if the employee is terminated by the employer for authorized causes.

Probation Period

Maximum length of the probationary period is six months.

Visa

Employment Visa

There are four types of visas available for foreign nationals coming to the Philippines for business or employment purposes:

  • Pre-arranged Employment Visa or 9(G) Visa
  • Treaty Trader’s Visa or 9(D)
  • Provisional Work Permit
  • Special Work Permit