Employee Benefits in The Philippines

Who Is Entitled to Employee Benefits in the Philippines

In the Philippines, employee benefits are governed by various labor laws designed to protect workers' rights and ensure their well-being. The Labor Code of the Philippines, along with other specific statutes, outlines the mandatory benefits that employers must provide to their employees. These benefits apply to all employees, regardless of their employment status—be it full-time, part-time, or probationary—ensuring comprehensive coverage across different types of employment. However, certain benefits may have specific eligibility requirements, such as tenure or contributions to social insurance programs.

Overview of Employee Benefits in the Philippines

Mandatory Employee Benefits In The Philippines

Mandatory benefits are legally required and form the core of any employee benefits package in the Philippines. Here’s a comprehensive list of mandatory benefits in the Philippines:

Social Security System (SSS)

The Social Security System (SSS) is a state-run insurance program that provides benefits such as retirement, disability, sickness, maternity, and death benefits to private-sector employees, self-employed individuals, and voluntary members. Employers are required to contribute a portion of their employees' salaries to the SSS, ensuring financial support during various life events and promoting employee well-being.

PhilHealth (National Health Insurance Program)

PhilHealth is the national health insurance program in the Philippines, offering medical coverage and benefits to its members. Both employers and employees contribute a portion of the employee's salary to PhilHealth, providing access to essential healthcare services and promoting overall health among employees.

Home Development Mutual Fund (Pag-IBIG Fund)

The Pag-IBIG Fund is a government-managed savings program that provides housing loans to its members. Employers and employees are mandated to contribute to this fund, facilitating opportunities for employees to own homes and achieve financial stability.

13th Month Pay

In the Philippines, employers are legally required to provide a 13th-month pay to their employees, equivalent to one-twelfth of the total basic salary earned within a calendar year. This benefit is typically given at the end of the year and serves as a financial boost for employees, aiding in year-end expenses.

Service Incentive Leave

Employees who have rendered at least one year of service are entitled to a yearly service incentive leave of five days with pay. This leave can be used for personal reasons, allowing employees time off for rest or personal matters, thereby promoting work-life balance.

Maternity and Paternity Leave

Female employees are granted 105 days of paid maternity leave for childbirth, with an additional 15 days for solo parents. In cases of miscarriage or emergency termination, a 60-day leave is provided. Male employees are entitled to seven days of paid paternity leave for the first four deliveries of their legitimate spouse. These leaves support parents during significant life events, contributing to family welfare.

Supplemental Employee Benefits In The Philippines

Supplemental benefits are not required by law, but can help you stand out as an employer and attract top talent. They include:

Private Health Insurance

While PhilHealth provides basic health coverage, many employers offer private health insurance plans that cover additional services such as dental, vision, and extended medical care. This enhances employee satisfaction and addresses healthcare needs more comprehensively.

Group Life Insurance

Employers may provide group life insurance policies to offer financial protection to employees' beneficiaries in the event of the employee's death. This benefit provides peace of mind and financial security to employees' families.

Additional Paid Time Off

Offering vacation days beyond the mandatory service incentive leave allows employees more time to rest and recharge. This can lead to increased productivity and job satisfaction.

Performance Bonuses

Beyond the 13th-month pay, some employers provide performance-based bonuses to reward employees for exceptional work. This incentivizes high performance and acknowledges employee contributions.

Flexible Work Arrangements

Implementing flexible work schedules or remote work options can improve work-life balance, reduce stress, and increase employee loyalty. This flexibility is highly valued by employees seeking to manage personal and professional commitments effectively.

Employee Wellness Programs

Wellness programs, including gym memberships, mental health support, and wellness workshops, promote overall well-being. Investing in such programs can lead to healthier, more engaged, and productive employees.

Tax Implications of Employee Benefits in the Philippines

Employers can claim tax deductions for contributions to SSS, PhilHealth, and Pag-IBIG. While the 13th-month pay is tax-exempt up to a threshold, other bonuses may be taxable. Proper documentation is crucial for compliance.

How to Offer an Employee Benefits Program for Employees in the Philippines

Set Budget & Goals

Begin by defining clear objectives for your employee benefits program. For example, you might want to boost employee satisfaction, improve retention rates or attract top talent globally. Now, establish a realistic budget that aligns with these goals, taking into account the financial implications of offering various benefits across different regions. 

Use tools like Playroll’s employee cost calculator to benchmark your offering across regions.

Partner with Benefits Providers

Collaborate with reputable global benefits providers who have proven experience in international markets. These partners can ensure compliance, and offer insights into local regulations, cultural expectations as well as competitive standards – making your benefits program more attractive to employees in each country. 

Customize Benefits for Local Culture and Expectations

Employee needs and preferences can vary significantly across cultures. That’s why it’s so important to tailor your benefits offerings to reflect local customs, values, and expectations. For instance, while flexible work arrangements might be highly valued in one country, healthcare benefits could be more critical in another. Customizing your benefits packages accordingly can help make your offering more competitive to local talent. 

Playroll’s benefits team provides expert insights into tailoring your benefits packages in 180+ regions to local needs, helping to attract and retain top talent.

Communicate the Benefits Program to Employees

Good communication is crucial to ensure employees understand and make use of the benefits available to them. Use appropriate messaging channels to inform employees about the program's details, how to access benefits, and any relevant procedures.

Encourage open lines of communication within the organization, and update the team on any changes in the benefits program. It’s a good idea to conduct regular employee engagement surveys to get feedback on satisfaction with your benefits program, to make proactive changes as needed.

Legal Considerations for Employee Benefits in the Philippines

Employers must comply with labor laws such as the Labor Code and specific acts like the National Health Insurance Act. Regular audits and transparent communication with employees are necessary to ensure compliance.

How Benefits Impact Employee Cost

Benefits significantly affect payroll costs. Employers can manage expenses by offering flexible benefit plans while maintaining competitive offerings to boost satisfaction and retention.

How Can Playroll Help with Benefits Management in the Philippines?

Managing employee benefits across multiple countries can be complex, but it doesn’t have to be. Playroll simplifies the process by handling administrative tasks, ensuring compliance with local regulations, and providing access to tailored benefits packages in 180+ regions.

With everything managed through a single platform, companies can focus on supporting their teams  – wherever they are.

• Pick and choose from localized benefits packages to attract and retain global talent.
• Built-in compliance to stay ahead of evolving regulations.
• Manage leave, expenses, and more, through one intuitive dashboard.