112.9 M
Philippine Peso (PHP)
Cost of Living
(US 69.92)
Time (UTC)
UTC +8

Hire in Philippines without an entity and fully compliant with local labor laws

The Philippines is the 73rd-largest country in the world and the 21st-largest country in Asia. The 7,641 islands that make up the archipelago are largely uninhabited. With less exposure to unstable international assets, less reliance on exports, and relatively strong local consumption, the economy is reasonably immune to global economic shocks.

The land area is approximately 74% the size of California, and the capital city, Manila, is about 8,507 miles from New York.

Get to know the Philippines

The Republic of the Philippines, commonly known as the Philippines, is broadly separated into three main geographic regions from north to south: Luzon, Visayas, and Mindanao.

The dispersed geography adds great cultural variety to each island. For example, the prevalence of Spanish surnames among Filipinos reflects strong Hispanic legacies but does not always denote Spanish ancestry. The widespread use of English is one of many ways America’s impacted contemporary Filipino culture. 

The increasingly industrialized Philippines economy is shifting from an agricultural focus to manufacturing and service industries.

The World Bank classifies the Philippines as a lower-middle-income economy with the following trade agreements and alliances: 

  • APEC - Asia-Pacific Economic Cooperation
  • ASEAN - Association of Southeast Asian Nations
  • RCEP - Regional, comprehensive economic partnership
  • ADB - Asian Development Bank
  • Non-Aligned Movement
  • G20 - Developing Nations
  • G33 - Forum for developing countries
  • Latin Union
  • UN - United Nations
  • WTO - World Trade Organization

“Must know” if you’re hiring in the Philippines without an employer of record

Entity requirements
Mandatory hiring contracts & clauses
Different compliance risks for full time vs contractor employees
Mandatory probationary periods
Allowable working hours & overtime wage laws
Timecard and attendance records
Required employer payroll, labor insurance, and tax payments
Discrimination protection
Notices & termination regulations

Budgeting for Philippines employees

Hiring remote Filipino professionals is smart and economical, assuming you’re fully compliant with local tax, labor, and wage laws.
Employee Classification–Full-time vs Contractor
  • Probationary Employee = no more than 180 days
  • Project Employment = the duration of the project or undertaking, as stipulated in the project employment contract
  • Casual Employee = no more than one year; and
  • A Fixed-Term Employee = for the specific term set in the employment contract.
Employment Contracts
  • Although a formal agreement is preferred, Philippine law does not require an employment contract to be in writing. Additionally, there are no standard conditions for the enforcement or validity of employment contracts.
  • According to Section 295 of the Labor Code, work performed by an employee that is typically required or desirable in the usual course of the employer's business or trade qualifies as regular employment.
Probation Period
  • Minimum = 6 months
  • If an employee works beyond their probationary employment period, the law grants them regular employee status
Standard Working Hours & Overtime
  • 8 hours per day, maximum of 48 hours per week
  • Employers must provide employees at least a 24-hour break.
  • Employees are entitled to an additional payment equal to at least 25% of their standard compensation for overtime worked on regular business days.
  • For the first eight hours of a holiday, special day, or ordinary holiday, an employee who works overtime, employers pay at least 30% above regular hourly rates.
Payroll Frequency

Twice a month

Wages & Bonuses
  • Minimum monthly wage = $11970 USD
  • Minimum daily wage = $9.69 USD
  • 13th Month Pay

USD equivalent median salaries based on Role:

  • Data Scientist: $47,414
  • Electrical Engineer: $5,760
  • Hardware Engineer: $14,008
  • IT Manager: $21,488
  • Mobile Developer: $21,532
  • Product Manager: $16,921
  • Project Manager: $19,055
  • QA Engineer: $10,371
  • Software Engineer: $16,190
  • System Administrator: $31,344
  • UX Designer: $23,994
  • Web Developer: $11,053
Payroll Taxes & Employer Contributions
  • SSS (Social Security System): (1) 7.07% Employer Contribution, (2) 3.33% Employee Contribution
  • 30% Corporate Income Tax Rate
  • 1.16%-1.19% Payroll Tax

  • Service Incentive Leave
  • Home Development Mutual Fund (HDMF)
  • Weekly Rest Day
  • 13-month pay entitlement
  • Bereavement Leave
  • Retirement Benefit

Health Insurance 

  • 3.5% of the employee's basic salary, equally divided between employee and employer

Paid leave


  • 2 - 4 weeks
  • 100% salary
  • Only up to four deliveries


  • Up to 7 days
  • 100% salary
  • Only up to four deliveries

Vacation/PTO days

  • 13 - 18 days
  • Convertible to money at the end of each year

Sick Days

  • 12 - 15 days
  • Convertible to money at the end of each year

Additional Leave

  • Bereavement: Immediate family = 3 days
  • Jury Duty
  • Voting


The Philippines has numerous observances and 19 national (public) holidays throughout the year. Others are based on the lunar calendar and are therefore observed on different days every year, while some have fixed dates based on the Gregorian calendar.


The most important fixed-date holidays are

  • New Year’s Day (January 1)
  • Labor Day (May 1)
  • Independence Day (June 12)
  • Christmas Day (December 25)
Termination & Severance

Philippine labor law reinforces an employee’s right to security of tenure, as guaranteed by the Philippine Constitution.

Just Causes for Termination

  • Severe misbehavior or willful disobedience by an employee of the legitimate instructions of their employer or agent while performing their job
  • Employee’s flagrant and persistent failure to perform job requirements
  • Fraud or a willful betrayal by an employee of the faith placed in them by their employer or properly appointed agent
  • If an employee commits a criminal offense against their employer, a member of their immediate family, or a properly appointed representative
  • Similar causes 

Authorized Causes for Termination

  • Installing labor-saving equipment
  • Redundancy
  • Reduction of staff to avoid losses
  • Closing down or ceasing to operate the business or endeavor
  • Illness

Separation Pay

  • Separation pay must be at least one month salary or one month's salary for each year of service
  • Should be paid within 30 days of the separation date

Termination Agreements

  • It is legal for an employer and employee to agree on the terms of resignation, but the employer must ensure the agreement is entered into voluntarily by both parties

Releases and Quit claims

According to legal precedent, a legitimate (release waiver and) quitclaim must meet the following requirements:

  • None of the parties engaged in fraud or deception
  • The basis for the quitclaim is convincing and reasonable
  • The contract does not violate the law, public order, public policy, morals, good customs, or harm a third party with a legal right

A few fun facts about the Philippines

  • The Philippines is the world's top supplier of nurses
  • There are 175+ languages in the country
  • Mindanao Trench, which is located near the Philippines, is one of the deepest ocean trenches in the world, with a depth reaching 6.5 miles
  • The bayanihan or spirit of kinship and camaraderie which Filipinos are famous for, are still alive

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