Philippines
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Introduction
General Overview & Economic Facts
- he Philippines is officially known as the Republic of Philippines
- The Philippines is an archipelagic country in Southeast Asia. The country is made up of around 7640 islands. It has a population of 109 million people and covers 300 000 square kilometers (115 830 square miles)
- Philippines is a developing country. It has the world’s 107th largest economy by nominal GDP and 115th largest economy by PPP. The Philippines economy however has previously outperformed the ASEAN countries and has been seen as one of the fastest growing economies in the world
Why Employ In Philippines?
- The Philippines’ primary exports consist of semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, and fruits. The Philippine economy previously focused on agriculture and has now shifted to service and manufacturing
- 19.16% of the population is between the ages of 15 and 24 years, with 37.37% of the population being between the ages of 25 and 54. The Philippines have a relatively young population where 56.53% of people are between the ages of 15 and 54
Overview Of The Labour Law
- The State in the Philippines provides equal work opportunity regardless of gender, race, or creed. The state also regulates employer-employee relations
- The law governing labor practices in the Philippines is the Labor Code of the Philippines. The labour code in Philippines is stringent. This is to prohibit any unjust or unauthorized treatment of employees
- The Labor Code also expresses the right of an employee to a trade union
Fun Country Facts
- The Philippines has 3 of the worlds largest shopping malls
- The Philippines have more volcanoes than towns. It also has more volcanoes per square mile than any other island on earth
- There are over 175 languages in the Philippines and at least 171 of them are still be used and spoken by people today
Why Use Playroll Services For Philippines?
- Employing in Philippines requires companies to have their own legal entity in the country as well as managing payroll, employee benefits, taxes and legal compliance. This can get quite complicated, especially with the complexity of employment laws in Philippines
- With Playroll’s Employer of Record services, your team will be employed by our established legal entities in each country
- We will take care of payroll, employee benefits, taxes, legal compliance and provide ongoing employee support, so that you can focus on growing a thriving team
Employer Contributions
These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Social Security
Called Social Security System (SSS)
Calculated on the employee’s Monthly Basic Salary (MBS)
8.5%
Medical
Called Philippines Health Insurance Corporation (PHIC) / Philhealth
Calculated on the employee’s Monthly Basic Salary (MBS)
Earning PHP 10,000.00 and below
PHP 150.00
Earning PHP 10,000.01 to PHP 79,999.99
2.00%
Earning PHP 80,000.00 and above
PHP 1600.00
Housing Fund
Called Home Development Mutual Fund (HDMF) / PAG – IBIG fund
Earning PHP 0.00 – PHP 5, 000.00
2.00%
Calculated on the employee’s Monthly Basic Salary (MBS)
Earning PHP 5,000.00 or more
0.00%
Employee Contributions
These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Social Security
Calculated on the employee’s Monthly Basic Salary (MBS)
4.50%
Medical
Earning PHP 10,000.00 and below
PHP 150.00
Earning PHP 10,000.01 to PHP 79,999.99
2.00%
Earning PHP 80,000.00 and above
PHP 1600.00
Housing Fund
If the employee’s salary is PHP 1,500.00 or below
1.00%
If the employee’s monthly salary is above PHP 1,500.00 but limited to PHP 5,000.00
2.00%
Income Tax
Income Tax is ‘Pay As You Earn’
Federal tax of 30% is applied on vacation premium exemptions, grocery coupons, and Christmas bonuses
Income bracket per annum
0.00 – 250 000.00
0.00%
250 000.00 – 400 000.00
20.00% of the excess over PHP 250,000.00
400 000.01 – 800 000.00
PHP 30,000.00 + 25.00% of excess of PHP 400,000.00
800 000.01 – 2 000 000.00
PHP 130,000.00 + 30.00% of excess of 800,000.00
2 000 000.01 – 8 000 000
PHP 490,000.00 + 32.00% of excess above 2,000.000.00
8 000 000.01 or more
PHP 2,410,000.00 + 35.00% of excess of 8,000,000.00
Employment Terms
General
Minimum Wage
- PHP 316.00 to PHP 537.00 per day
Working Hours
- Maximum of 40 hours per week and 8 hours per day
- Minimum 60-minute meal interval
- Typical working hours are 08h00 to 17h00 Monday to Friday
Overtime
- There are no maximum hours for overtime. This is at the employer’s discretion
Notice Period
- 30 days
Severance Pay
- Depending on certain conditions being met workers are entitled to receive a severance pay of either:
– At least half month for every year of service or
– One month pay for every year of service
A fraction of at least 6 months is considered one year
Probation Period
- 6 months
- Apprenticeship agreements may stipulate longer periods
Bonus
- All employees are entitled to a bonus called “13th month pay.”
- The 13th month pay of an employee should be equivalent to at least 1/12 of the total basic salary that the employee earned within a calendar year
Public Holidays
Public holidays 2022
- January 1st – New Year’s Day
- February 1st – Chinese Lunar New Year’s Day (Special Non-Working Holiday)
- February 25th – People Power Anniversary (Special Non-Working Holiday)
- April 9th – The Day of Valor
- April 14th – Maundy Thursday
- April 15th – Good Friday
- April 16th – Black Saturday (Special Non-Working Holiday)
- May 1st – Labour Day
- May 3rd – Eidul – Fitar
- June 12th – Independence Day
- July 10th – Eid al-Adha (Feast of Sacrifice)
- August 21st – Ninoy Aquino Day (Special Non-Working Holiday)
- August 29th – National Heroes Day
- November 1st – All Saints’ Day (Special Non-Working Holiday)
- November 30th – Bonifacio Day
- December 25th – Christmas Day
- December 20th – Rizal Day
- December 31st – New Year’s Eve (Special Non-Working Day)
Leave
Paid Leave / Vacation Days
- There is no statutory obligation to provide paid vacation days
- It is common to offer vacation leave of 12 to 15 days per year
Sick Leave
- There is no statutory obligation to provide sick leave
- It is common to offer 15 days of sick leave per year
Service Incentive Leave
- The Service Incentive Leave (SIL) is the alternative option for employers who don’t grant their employees sick or vacation leave
- An employee who has been employed for at least one year is entitled to 5 days paid leave
Maternity Leave
- Paid leave
- Paid by Social Security (after paying 3 months’ contributions to Social Security)
- 105 days (option to extend for an additional 30 days unpaid leave)
- An additional 15 days will be provided for single parents
Paternity Leave
- Paid leave
- Paid by employer
- 7 days
Parental Leave
- Paid leave
- Paid by employer
- 7 days
Leave for Victims of Violence against Women and their Children
- Paid leave
- Paid by employer
- 10 days per year
Special Leave Benefits for Women
- Paid leave
- Paid by employer
- 2 months (after at least 6 months continuous aggregate employment service for the last 12 months prior to leave)