Easily manage employment in Philippines

Payroll services in the Philippines

The Philippines has a growing economy with key industries in business process outsourcing, manufacturing, and agriculture. With specific labor laws and tax regulations, employers in the Philippines must ensure compliance with local payroll requirements, including social security contributions, employment contracts, and tax obligations. Understanding these regulations is essential for smooth payroll operations and legal compliance.

Payroll breakdown in the Philippines

Employers in the Philippines must adhere to national payroll regulations regarding wages, taxes, and social contributions. Below is an overview of key payroll components:

Minimum wage and working hours

• Minimum wage: The Philippines’ minimum wage varies by region, with the highest set at PHP 610 per day in Metro Manila.
• Payroll frequency: Salaries are generally paid biweekly or monthly.
• Standard working hours: The normal workweek in the Philippines is 48 hours, typically spread over six days.
• Overtime: Employees are entitled to additional pay for overtime work, calculated at 125% of the regular wage for extra hours and 130% for work on public holidays.

Taxation and social security contributions

• Personal income tax: The Philippines has a progressive income tax system with rates ranging from 0% to 35% depending on income levels.
• Employer contributions:
• Social Security System (SSS): 8.5% of the gross salary.
• Philippine Health Insurance Corporation (PhilHealth): 4% of the gross salary.
• Home Development Mutual Fund (Pag-IBIG): 2% of the gross salary.
• Employee contributions:
• Social Security System (SSS): 4.5% of the gross salary.
• Philippine Health Insurance Corporation (PhilHealth): 4% of the gross salary.
• Home Development Mutual Fund (Pag-IBIG): 1% of the gross salary.
• Corporate tax: The corporate income tax rate in the Philippines is 25%.
• Tax reporting: Employers must file payroll taxes and contributions with the Bureau of Internal Revenue (BIR) regularly.

Payroll compliance in the Philippines

• Employment contracts must be provided in writing and specify terms such as salary, working hours, and job responsibilities.
• Payroll deductions: Employers must ensure accurate deductions for social security, health insurance, and income tax.
• Employers must stay updated on changes to the Philippines’ labor laws and tax regulations to avoid penalties.

Run payroll in the Philippines with Remote

Managing payroll in the Philippines requires careful attention to tax regulations, employment laws, and social security requirements. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be with Remote, book a demo today.