Payroll and Benefits Guide - Philippines

Philippines
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Currency

Philippine Peso
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Capital

Manila
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Employer Taxes

13.25%
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Date Format

mm/dd/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

Filipinos love basketball. Philippines Basketball Association (PBA), is the second oldest in the world after NBA.

The Philippines is the world’s number 2 producer and exporter of coconuts.

Filipinos love their shopping malls.

Erythromycin was invented in the Philippines.

English is widely spoken.

13 is an unlucky number.

Philippines

Contributions

Employee Payroll Tax

Contribution TypeRate
Social Security System4.50%
Home Development Mutual Fund1.00% – Below PHP 1,500
Home Development Mutual Fund2.00% – Above PHP 1,500
Home Development Mutual Fund1.75% – Above PHP 1,500

Employer Payroll Tax

Contribution TypeRate
Social Security System, including Employer Contribution and Provident Funt (WISP) (maximum contribution 2,880 PHP)9.50%
Philippine Health Insurance Corporation1.75%
Home Development Mutual Fund (HDMF) (Pag-ibig)2.00%

Payroll

Payroll Cycle

The payroll cycles are biweekly.

13th Salary

Must be paid on or before 24th December and is equivalent to one month’s pay (Aguinaldo)

Work Hours and Week

A standard workday is 8 hours. A standard work week is Monday to Friday.

Overtime

Hours beyond the regular workweek are considered overtime. This can be regulated by the employment contract. Overtime is paid at the rate of 125% of the regular pay. Senior managers are excluded from overtime pay.
Philippines

Leave

Paid Time Off

Minimum of 5 days paid leave a year after the completion of 1 year of employment.

Public Holidays

There are 18 holidays.

Sick Days

Sick leave allowance falls under paid annual leave.

Maternity Leave

Female employees who have completed at least one year of employment are entitled to a yearly service incentive of 5 days paid leave which they can use towards maternity leave.

In addition, the employee is entitled to 105 days paid maternity leave after the due date. For single mothers, the entitlement increased to 120 days.

The maternity benefit is paid to the employee at the rate of 100% of the regular pay by the employer and is reimbursed to them through social security.

Paternity Leave

The father is entitled to mandatory paid paternity leave of 7 days from the child’s date of birth.

Parental Leave

Additional Parental leave in the Philippines consists of 7 days for single parent leave and 10 days of women and their children who are victims of violence.

Termination

Termination Process

The termination process is standard in the Philippines based on the prescribed list of termination reasons contained within article 16 of the General Labor Law unless an employer can provide sufficient cause for dismissal without notice (i.e. misconduct)

Notice Period

Employees must provide a minimum of 30 days’ notice.

Severance Pay

Severance pay if applicable if the employer initiated the termination for authorized causes and is equal to one month’s pay for every year of employment.

Probation Period

Probation Period

The probation period in the Philippines for definite employees is 6 months.

Immigration

Any foreigners coming to work in the Philippines are required to have a work visa by the Bureau of Immigration (BI)

Different work visas/permits are available.

For a Work Visa, the below documents need to be completed:

9(g) Pre-Arranged Employee Commercial Visa

9(g) Pre-Arranged Employee Non-Commercial Visa

Special Non-Immigrant Visa or 47(A)(2)

Special Non-Immigrant Visa under EO 226, as amended by RA 8756 (ROHQ)

For Work Permits

Special Work Permit (SWP)

Provisional Work Permit (PWP)

Alien Employment Permit (AEP)

VAT

The standard rate of VAT in the Philippines is 12%.