Employee Leasing in the Philippines
Thanks to its well-developed infrastructure, strategic location, and numerous trade agreements, the Philippines is a favorite destination for businesses wishing to expand their activity into the East Asian market at reduced costs. The country’s rapidly-growing economy and large domestic market make it a privileged option for businesses in expansion.
Companies can achieve expansion into the Philippines quickly and easily through employee leasing, as it allows them to flexibly measure their growth potential in the country before fully committing to the expansion. The services offered by FMC Group help companies be completely compliant with local laws and regulations and hire a team that is extremely familiar with the Filipino market and its trends.
Get in touch with us
- Advantages of Employee Leasing in the Philippines
- Employee Leasing Services Offered by FMC Group
- Advantages of the Filipino market
- Recruitment in the Philippines
- Minimum Wage and Payroll
- Social Contributions and Taxes
- Working Hours and Overtime
- Vacation Days
- Parental Leave and Sick leave
- Notice Period
Advantages of Employee Leasing in the Philippines
- Employee leasing in the Philippines allows companies to quickly and easily enter the Filipino market, as well as the regional market of the Association of Southeast Asian Nations (ASEAN).
- Employee leasing gives businesses the opportunity to take control of their growth according to their own strategy, as they do not have to worry about administrative procedures and legal regulations relating to their expansion.
- Employee leasing gives companies full access to the renowned Filipino labor force and allows them to easily integrate the best candidates into their teams.
Employee Leasing Services Offered by FMC Group
- Search and selection of the best candidates according to the client’s needs;
- Negotiation of employment contracts;
- Management of the payroll according to international standards;
- Payment of social security contributions and taxes according to the Filipino labor law;
- Payment of all types of expenses and allowances;
- Monitoring of paid leaves and vacations for employees;
- Negotiation and implementation of private health insurance for employees if needed;
- Maintenance of regular contact with companies regarding the management of their employees.
Management and Reporting Flow of Employee Leasing Services
Advantages of the Filipino Market
- Located in the heart of East Asia and at the crossroads of the eastern and western business worlds, the Philippines can serve as an important entry point to the ASEAN market with its 650 million consumers. The country can also act as a manufacturing platform to access the larger economies of East Asia, namely China, India, Japan, and South Korea.
- The domestic market of the Philippines is growing at a very rapid pace. The country’s average annual GDP growth between 2010 and 2019 stood at 6.4%. Despite the recession induced by the COVID-19 pandemic, the GDP growth rate in the Philippines is expected to quickly recover and reach around 5.7% in 2022 and 5.6% in 2023-24, according to the World Bank.
- The Philippines is a member of the ASEAN Free Trade Area and has trade agreements with several important markets, notably China, Japan, Hong Kong, India, South Korea, Australia, New Zealand, and the European Free Trade Association.
- The Philippines has well-developed infrastructures linking the three major island groups of the country. The Philippines is highly accessible by air, through 16 international airports, and by sea, with five major seaports.
- In terms of access to telecommunications, the Philippines has one of the highest internet penetration rates in the region of Southeast Asia, with around 82%. The country has more than 76 million internet users, and high-speed fiber-optic internet is widely available in urban areas.
Recruitment in the Philippines
Minimum Wage and Payroll
- The daily minimum wage in the Philippines is set at PHP 537 (EUR 9.62).
- Salaries in the Philippines are paid biweekly, at intervals not exceeding 16 days.
- It is mandatory in the Philippines to give employees a 13th-month salary bonus every year before December 24th.
Social Contributions and Taxes
|Social Security System||8.00% (capped at PHP 2,155)|
|Home Development Mutual Fund||2.00%|
|Philippine Health Insurance Corporation||1.75%|
|Provident Fund||PHP 425|
|Total||11.75% + PHP 425|
|Social Security System||4.00%|
|Home Development Mutual Fund||2.00% (daily pay over PHP 1,500)
1.00% (daily pay below PHP 1,500)
|Philippine Health Insurance Corporation||1.75%|
|Provident Fund||PHP 225|
|Total||6.75% – 7.75% + PHP 225|
|Employee Income Tax|
|Up to PHP 250,000 yearly||0.00%|
|Between PHP 250,000 and 400,000||20.00%|
|Between PHP 400,000 and 800,000||25.00%|
|Between PHP 800,000 and 2,000,000||30.00%|
|Between PHP 2,000,000 and 8,000,000||PHP 490,000
+ 32.00% of excess over PHP 2,000,000
|From PHP 8,000,000||PHP 2,410,000
+ 5.00% of excess over PHP 8,000,000
Working Hours and Overtime
- Legal working hours in the Philippines cannot exceed eight hours per day and employees must have one full day of rest every week.
- Overtime work is generally paid at the rate of 125% of the regular pay.
- Employees in the Philippines have the right to take a minimum of five paid vacation days per year after their first year of service, but a longer vacation can be specified in the employment contract.
- The Philippines commemorates 14 public holidays:
- New Year’s Day: January 1st;
- Chinese New Year: Between January and February (moveable);
- EDSA People Power Revolution Anniversary: February 25th;
- Maundy Thursday and Good Friday: Between March and April (moveable);
- Day of Valor: April 9th;
- Labor Day: May 1st;
- Independence Day: June 12th;
- Ninoy Aquino Day: August 21st;
- National Heroes’ Day: August 29th;
- All Saints’ Day: November 1st;
- Bonifacio Day: November 30th;
- Immaculate Conception Day: December 8th;
- Christmas Day: December 25th;
- Rizal Day: December 30th.
Parental Leave and Sick Leave
- Female employees in the Philippines can take up to 105 days of paid maternity leave, including 45 days before birth and 60 days after. The total duration is increased to 120 days for single mothers. The employer covers the full salary during maternity leave but gets reimbursed by social security afterward.
- New fathers can take seven days of paid leave after the birth of their child, paid for fully by the employer.
- A parental leave of seven days per year is given exclusively to single parents.
- Sick leave for employees in the Philippines is subtracted from the annual paid leave.
- The minimal notice period for employees wishing to resign in the Philippines is 30 days.
Disclaimer: Although we carefully researched and compiled the above information, we do not give any guarantee with respect to the actuality, correctness, and completeness.