The Philippines is an island country in Southeast Asia in the western Pacific Ocean. It is an archipelago consisting of more than 7,000 islands and islets lying about 800 kilometers off the coast of Vietnam. The country is bounded by the South China Sea to the west, the Philippine Sea to the east, and the Celebes Sea to the southwest. It also covers an area of 300,000 square kilometers.
*Please note that the official currency is the currency of remuneration when employed through WorkMotion in the Philippines.
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Capital :
Manila
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Currency :
Philippine peso ( ₱; PHP)
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Languages spoken :
Filipino; English
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Population :
111.05 million (2021 est.)
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Minimum wage 2023 :
PHP 438 to PHP 610 per day (Varies by sector and region)
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Cost of Living index :
$$ (92 of 139 countries)
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Payroll Frequency :
Twice per month
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VAT - standard rate :
12%
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GDP - real growth rate :
5.7% (2021 est.)
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The national holidays mentioned below are valid for the year 2024.
The approximate time for sharing the contract with an employee in Philippines is 6 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.
NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.
In the Philippines, there is a Telecommuting Act that emphasizes two key principles of fair treatment and data privacy.
Pre-employment medical checks are mandatory for new hires while annual medical checks are also required for all employees.
The minimum wage varies by the sector one is employed in, and the region in which the employee resides.
The normal hours of work of any employee must not exceed eight hours a day. Employers must provide no less than 60 minutes of unpaid meal breaks to employees. Rest periods or coffee breaks of five to 20 minutes, if provided, must be considered paid time.
Work may be performed beyond eight hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to their regular wage plus at least 25% thereof.
The probationary period must be no more than six months. Once the probation period is completed, the employment contract becomes permanent.
A 30 day notice period is required. There is no notice period for dismissal for just causes.
Any employee who has rendered at least one year of service is entitled to a yearly service incentive leave of five days with pay. This leave can be used as holidays or sick days. There are no rulings for carryover, and that aspect of the vacation policy is left to the discretion of the employer.
There is no statutory provision for sick leave in the Philippines. However, the five fully paid days for service leave can be used as sick leave. Employee contracts, company policy, and collective bargaining agreements often include sick leave benefits.
Parental leave of no more than seven working days with full pay every year is granted to any solo parent employee who has rendered service for at least one year.
Maternity leave of at least 105 days, paid at 100 % of their average daily salary credit, is granted to female employees with at least three months’ contributions to the Social Security System in the past 12 months. Single mothers are eligible for an additional 15 days of paid leave. Employed female workers receive full pay, which consists of Social Security System benefits computed based on their average daily salary credit and salary differential, to be paid by the employer, if any.
Fathers are entitled to seven working days of paid paternity leave with full pay from their employer for up to four children.
Rehabilitation leave is granted to employees for disability on account of injuries sustained while in the performance of duty. The duration, frequency, and terms of availing of this leave are based on the recommendation of the medical authority.
Female victims of domestic violence receive 10 days of leave with full pay from their employer.
Female employees are entitled to two months’ leave with full pay from the employer following surgery due to gynecological disorders, provided she has rendered continuous aggregate employment service of at least six months in the last 12 months.
Unpaid leave is granted for a duration of 30 days in cases where additional maternity leave is requested.
In the Philippines, employees covered by the social security system are entitled to a package of benefits under the Social Security and Employees’ Compensation (EC) Programs in the event of death, disability, unemployment, sickness, maternity, and old age.
An overview of the social security contributions is presented below.
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Benefits |
Employer Contribution |
Employee Contribution |
Monthly Salary Cap |
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Social Security (SSS) |
4.5% |
PHP 30,000 |
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Health Insurance |
2% |
2% |
PHP 80,000 |
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Home Development Fund |
2% |
2% |
PHP 5,000 |
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Employees’ Compensation |
2% |
– |
PHP 15,000 |
The premium rate for health insurance is 4%, shared equally between the employer and the employee, i.e. 2% each.
The National Health Insurance Program (NHIP) was established with the purpose of providing health insurance coverage and ensuring affordable, acceptable, available, and accessible services for all citizens of the Philippines.
Accidental insurance is funded by Social Security contributions made by the employer. The employer contributes 9.5% to the social security fund.
The Employees Compensation Insurance Fund (ECIF), also known as the “State Insurance Fund”, was created under Presidential Decree No. 626. It was established to carry out the State’s policy to promote and develop a tax-exempt employee compensation program in which employees and their dependents, in the event of work-related disability or death, may promptly secure adequate income, medical, and other related benefits.
As a purely employer-based contribution benefit, the employee does not contribute any amount to the program.
Members covered by the social security system are entitled to the Involuntary Separation Benefit. It is a cash benefit granted to covered employees who are involuntarily separated from employment (e.g. due to retrenchment, downsizing, closure, or cessation of operations, installation of labor-saving devices, and redundancy).
The public pension is financed by social security contributions and the employer’s contribution rate to the fund is pegged at 9.5%.
The retirement benefit is a cash benefit paid either in a monthly pension or a lump sum to a member who can no longer work due to old age. Members must have paid at least 120 monthly contributions prior to retirement to qualify for the old age pension.
The Home Development Mutual Fund (HDMF), popularly known as Pag-IBIG Fund, operates a national savings program and provides affordable shelter financing for Filipino workers.
Employers contribute 2% of the monthly compensation of the covered employee as a counterpart contribution.
The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.
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