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Phillippines

Philippines Guide

The Philippines continues to be a prime destination for global hiring, offering a large English-speaking workforce, competitive labor costs, and a robust outsourcing industry. This guide provides comprehensive information on labor laws, benefits, and best practices for hiring in The Philippines as of 2025. 

General Information

Currency:

Philippine Peso (PHP)

Main Language:

Filipino and English

Population:

Approximately 113 million

Capital:

Manila

Employer Costs and Social Contributions

Social Contributions 

 

Social Security System (SSS): 

The SSS contribution amount varies based on the employee’s salary range.  

*Click here to have more detailed information: https://www.sss.gov.ph/wp-content/uploads/2024/12/Cir-2024-006-Employers-scaled.jpg 

 

Monthly Salary Credit (MSC): The Monthly Salary Credit is the basis for calculating contributions to social welfare programs like the Social Security System. The MSC represents the amount of an employee’s monthly salary used to determine how much they and their employer will contribute to SSS. 

  • Minimum: PHP 5,000/USD 87.24 
  • Maximum: PHP 35,000/USD 610.69 
      

PhilHealth (Health Insurance): PhilHealth is the National Health Insurance Program of the Philippines, designed to provide health insurance coverage for Filipino citizens, ensuring they have access to affordable medical care. 

 

Contribution Rate: The PhilHealth contribution rate refers to the percentage of an employee’s monthly salary that must be paid towards the program to maintain coverage. Both employees and employers contribute to the fund: 

 

  • 5% of the employee’s monthly basic salary if it falls between PHP 10,000.01/USD 174.83 and PHP 99,999.99/USD 1,745.50 

 

  • If the employee’s salary is less than PHP 10,000/USD 174.83, the PhilHealth contribution is fixed at PHP 500/USD 8.72. 

 

  • If the employee’s salary is PHP 100,000/ USD 1,745.50 or above, the PhilHealth contribution is fixed at PHP 5,000/USD 87.24. 

 

Income Floor: PHP 10,000 – USD 174.83. Minimum monthly salary used for calculating contributions to social programs like PhilHealth in the Philippines. 

 

Income Ceiling: PHP 100,000 / USD 1,745.50. Is the highest salary used to calculate contributions to social programs like PhilHealth in the Philippines. 

 

Monthly Premium Range: PHP 500 to PHP 5,000 / 8.72 USD to 87.24 USD. Refers to the range of contribution amounts that employees and employers are required to pay to government programs like PhilHealth, depending on the salary level. 

 

Pag-IBIG Fund (Housing Fund): The Pag-IBIG Fund, also known as the Housing Fund, is a government-run savings program in the Philippines designed to provide financial assistance for its members to purchase homes, pay for home improvements, or pay for housing loans. 

  • 2% of the employee’s monthly salary is contributed by both the employee and the employer to the Pag-IBIG Fund. 

This means that both parties (employee and employer) each contribute 2% of the employee’s monthly salary, which goes into the fund for the purpose of building savings and facilitating housing loans. 

 

  • Monthly Contribution Cap: The monthly contribution per employee is PHP 400/USD 6.98, with a 50% share each for the employer and the employee.  

The monthly contribution cap refers to the maximum contribution an employee can make to the Pag-IBIG Fund each month. PHP 400 (about USD 6.98) is the maximum monthly contribution per employee. This means that even if an employee’s salary exceeds a certain threshold, the contribution will not go above PHP 400. 

 

*Average exchange rate used: PHP 57.31 per 1 USD. 

Hiring and Employment Conditions

Types of Employment Contracts: 

  • Regular Employment: Granted after a maximum 6-month probationary period. 
  • Probationary Employment: Up to 6 months. 
  • Fixed-Term/Project-Based Contracts: For specific projects or periods. 
  • Casual Employment: For work that is not essential or necessary in the employer’s usual business. 

Benefits and Compensation

Mandatory Benefits: 

  • 13th Month Pay: Equivalent to 1/12 of the total basic salary earned within a calendar year. Must be paid on or before December 24th. 
      
  • Service Incentive Leave (SIL): 5 days of paid leave annually after one year of service. 
      

Additional Compensation: 

 

Night Shift Differential: Additional 10% of the regular wage for work performed between 10:00 PM and 6:00 AM. 

 

Overtime Pay: 

  • Regular Days: 125% of the hourly rate. 
  • Rest Days/Special Holidays: 130% of the hourly rate. 
  • Regular Holidays: 200% of the hourly rate. 

Minimum Wage

Minimum Wage (Effective May 1, 2025): 

 

Metro Manila: 

  • Non-Agriculture: PHP 650/day – USD11.34/day 
  • Agriculture and Retail/Service Establishments (≤10 workers): PHP 610/day – USD10.64/day 

*Average exchange rate used: PHP 57.31 per 1 USD. 

*Minimum wage rates vary by region and sector. 

Working Hours

  • Standard Work Week: 8 hours/day, 5-6 days/week (maximum of 48 hours/week). 
  • Rest Day: At least one rest day per week. 
  • Overtime: Work beyond 8 hours/day is considered overtime and must be compensated accordingly. 

Payroll

  • Payroll Cycle: Typically, bi-monthly (semi-monthly) or monthly. 
  • 13th Month Pay: Mandatory and must be paid on or before December 24th each year. 

Leaves

Maternity Leave: 

  • Duration: 105 days with full pay for live childbirth, with an option to extend for an additional 30 days without pay. 
  • Additional: 15 days for single mothers. 
  • Coverage: Applicable to every instance of pregnancy, miscarriage, or emergency termination, regardless of frequency. 
      

Paternity Leave: 

  • Duration: 7 days with full pay for married male employees, applicable for the first four deliveries of the legitimate spouse. 
      

Service Incentive Leave (SIL): 

  • Duration: 5 days of paid leave annually after one year of service. 
  • Usage: Can be used for vacation or sick leave purposes. 
      

Note: Additional leaves such as parental leave, special leave for women, and others may be provided under specific conditions.

Termination

Acceptable Grounds for Termination: 

  • Just Causes: Serious misconduct, willful disobedience, gross and habitual neglect of duties, fraud, and other analogous cases. 
  • Authorized Causes: Installation of labor-saving devices, redundancy, retrenchment to prevent losses, closure or cessation of operation, and disease not curable within six months. 

 

Notice Period: 

  • Just Causes: No notice period required, but due process must be observed. 
  • Authorized Causes: At least 30 days written notice to the employee and the Department of Labor and Employment (DOLE). 

 

Separation Pay: 

  • Authorized Causes: Employees are entitled to separation pay, the amount of which depends on the cause of termination and the employee’s length of service. 

Vacations and Holidays

Regular Holidays: 

  •  New Year’s Day 
  • Eid’l Fitr 
  • Araw ng Kagitingan (Day of Valor) 
  • Maundy Thursday 
  • Good Friday 
  • Labor Day 
  • Independence Day 
  • National Heroes Day 
  • Bonifacio Day 
  • Christmas Day 
  • Rizal Day 
  • Eid’l Adha  

 

Special (Non-Working) Days: 

  • Chinese New Year 
  •  Black Saturday 
  • National and Local Elections 
  • Ninoy Aquino Day 
  • All Saints’ Day Eve 
  • All Saints’ Day 
  • Feast of the Immaculate Conception 
  • Christmas Eve 
  • Last Day of the Year