Basic information
Capital: Manila
Time zone: GMT+8
Languages: Filipino, English
Currency code: PHP
Human Resources at a Glance
Contract Terms
– Names and details of employers and employees
– The employee’s date of birth
– posts
– Duties and Responsibilities
– Place of work
– Employment status (full-time, part-time, or temporary)
– The start and end dates of the contract
– Salary level
– Date of payment
– working hours
– Leave entitlements
– Termination of Employment
Guidelines Regarding Probation Period/Trial Period
The probationary period is not mandatory and may not exceed six months.
An employee on probation may be terminated for just cause or if he or she fails to qualify as a regular employee according to the reasonable criteria notified to the employee by the employer at the time of the probationary period. or her engagement.
It is recommended that the decision on termination be made before the end of the fifth month. The employer must give a reason for terminating the employee. Expectations and progress should be documented, especially in cases of poor performance.
Regulations and Rules Regarding Working Hours
The normal working day is eight hours. This includes breaks or breaks of less than an hour. This does not include meal breaks, which must not be less than one hour. Employers should schedule 24-hour consecutive rest days after six days of work.
Minimum Wage Requirements
In the Philippines, the applicable minimum wage is set on a region-by-region basis. There is no national minimum wage. The applicable minimum wage is determined by the region where the employer company is located.
Payroll Cost
The employer cost is generally estimated at 11.07% of the employee’s salary.
Philippine Health Insurance Corporation (PhilHealth): 2.5%
-Social security: 8.57 %
-Residential Development Fund: PHP200
The Philippine Health Insurance Corporation (PhilHealth) has a contribution cap of PhP 1,600 per month.
Social security contributions are capped at PHP2,880 per month.
Termination
Grounds
The Philippines takes termination of the agreement seriously. Dismissal can only be done for legitimate or authorized reasons, but the employer has the burden of proving the legality of the dismissal of the employee. Employees must provide 30 days’ notice of resignation as if they have a valid reason. There is no such thing as “arbitrary” hiring and firing. Philippine law recognizes two types of reasons for termination of an employment contract:
-Just right
-Reason for Authorization
Employees who are terminated for just cause are not entitled to severance pay or severance pay.
A staff member who is terminated for a reason authorized may receive severance pay equal to at least half or a full month’s salary per year, depending on the reason for the termination. Dual notification process: The first notification is when the employee is informed of the violation. Employers usually set up grievance committees to give employees the opportunity to express their views. The meeting shall be held five days after the first notification. There will be up to 30 days for a review and investigation before a decision is made. A second notice (notice of dismissal) is sent to the employee.
Reasons for authorization include automation, layoffs, restructuring, or situations resulting from financial loss. Depending on the reason, half a month or a month’s severance pay will be paid for each year of service. Paperwork and documentation are important and recommended.
Notice Period
The notice period in the Philippines is generally 30 days, but it depends on the position level.
Redundancy/Severance Pay
Philippine law recognizes two types of “reasons” for terminating an employment contract: “good cause” and “authorized reason”. Employees who are terminated for “just cause” are not entitled to severance pay or severance pay. However, a staff member who is terminated for “authorized reasons” will receive severance pay equivalent to at least half a month’s salary or a full month’s salary per year, depending on the reason for his or her dismissal.
If redundancy is made to prevent loss, illness, bankruptcy, or non-serious loss of business to stop operations, the minimum severance pay is half a month’s salary for each year of service. Employees are entitled to a minimum severance pay, i.e., one month’s salary for each year of service, in the event of a separation of employees due to redundancy or the installation of labor-saving equipment.
Retirement benefits: In the absence of a retirement plan or agreement providing for employee retirement benefits, employees who have reached the age of 60 (optional) but not more than 65 years (mandatory) and have worked for the company for at least five years can retire and are entitled to a pension equivalent to at least half a month’s salary for each year of service. Any portion of at least six months is considered a full year. According to the Philippine Labor Code, the term “half-month’s wage” would mean 15 days plus one-twelfth of the 13th-month’s salary ( 1/12) and no more than five days of service award leave in cash equivalents.
As a result, the minimum retirement pension is one-half (1/2) month’s salary for each year of service, and a fraction of six months is considered one (1) full year. “Half a month’s salary” includes all of the following: 15 days’ wages at the latest wage rate, five days of service incentive leave in cash and 1/12th of the 13th-month salary /b113>（1/12 x 365/12 = 2.53） ）。 If the business has a CBA or employment contract that provides a retirement plan or benefits to employees, the employee will be entitled to the benefits set forth in said CBA or contract. However, such benefits shall not be lower than those provided for in the Labour Code.
Payment & leaveCompensation & Holidays
Salary Payment
Wages must be paid at least bi-weekly or twice a month, with an interval of no more than sixteen days. In practice, there is a legal and technical workaround for the frequency of monthly payments: one payment represents two payment cycles/intervals:
(a) two weeks of payment for services already provided
(b) Two weeks’ upfronts
to meet the following requirements: the interval shall not exceed 16 days.
Payments are usually made on the 15th of the month or the last day of the month.
Payslip Payroll
Pay stubs can be issued electronically or on paper.
Annual Leave
Employees are entitled to 5 days of paid leave after 12 months of employment, which is referred to in the Labor Code as Service Incentive Leave (SIL). Generally, this SIL is only available to low-income or blue-collar workers who may not be entitled to annual leave in their contract.
If the non-exempt employee is not used or used up at the end of the year, the service award leave shall be converted to the equivalent currency and paid by the employer to the non-exempt employee. Generally, an employer can stipulate an employee’s service incentive leave schedule.
Sick Leave
Staff members are not entitled to statutory sick leave. In practice, employees typically receive sick leave through a voluntary employer policy or CBA.
If an employee has paid SSS contributions for at least three months in the 12 months prior to illness or injury and has been hospitalized in a hospital (or elsewhere approved by SSS) for more than three days, his or her employer will receive a daily sickness allowance. This is equivalent to 90% of his or her average daily wage points for each day of confinement. However, this allowance will only begin to be paid after all the allowed sick leave (paid by the employer) has been exhausted.
Female employees who have served for at least six consecutive months in the last twelve months are entitled to two months’ special leave benefits with full pay based on their total monthly remuneration after surgery due to a gynaecological condition.
If SSS receives satisfactory evidence and the legality of that payment, SSS will reimburse the employer for 100% of the daily sickness benefit. Employers must also notify SSS of the restriction within five calendar days of receiving notice of the employee’s illness or injury.
Employees who become ill or suffer a work-related injury can file a claim with the Workers’ Compensation Plan (ECP). The ECP is designed to provide assistance (in the form of medical services, rehabilitation services, or earned cash benefits) to employees who are injured, sick, disabled, or died on the job.
Only employers are required to make monthly contributions, while employees are not required to make contributions. The employer’s contribution to the ECP includes the National Insurance Fund, which is the source of compensation for approved claims.
Compassionate & Bereavement Leave
Not statutory, but usually provided to employees in accordance with company policy.
Maternity & Parental Leave
In addition to the leave privileges provided for by the law in force, any single parent employee provided by law is entitled to parental leave of up to seven working days per year as long as he or she has worked for at least one year. A change in the status or circumstances of the parent applying for parental leave benefits (e.g., he or she is no longer solely responsible for parenting) will terminate their eligibility for that benefit. Unused parental leave benefits cannot be redeemed for cash and cannot be accumulated.
Tax and Social Security Information for Employers
Personal Income Tax
On or before the 10th of the month following the month in which the tax is withheld, except for taxes withheld in December, which must be filed and paid on or before January 15 of the following year. eFPS: withheld on or before the 15th of the month following the month, except for taxes withheld in December, which must be on January 20 of the following year Pay on or before the day.
| Annual Taxable Income (PHP). | Tax Rate |
| 0-250，000 | 0% |
| 250,000-400,000 | 15%of the excess over PHP 250,000 |
| 400,000-800,000 | PHP22,500+20%of the excess over PHP 400,000 |
| 800,000-2,000,000 | PHP 102,500+25%of the excess over PHP 800,000 |
| 2,000,000-8,000,000 | PHP402,500+30%of the excess over PHP 2,000,000 |
| >8,000,000 | PHP2,202,500+35%of the excess over PHP 8,000,000 |
Salaried individuals with a gross annual income of Php 250,000 or less are exempt from income tax. Minimum Wage Earners (MWE) are also exempt from income tax on the following income:
-Statutory Minimum Wage (SMW), including COLA (Cost of Living Allowance).
-Holiday pay
-Overtime pay
-Differential pay for night shifts
-Hazard pay
Social Security
It is the government’s policy to establish a tax-exempt SSS and provide meaningful protection to members and their beneficiaries against the hazards of disability, illness, maternity, and other unforeseen events that result in loss of income or financial burden.
| Social Security | Monthly Salary Cap (PHP). | Employer Contribution(%) | Employee Contribution (%) |
| Social Security (SS) | 30,000 | 9.5 | 4.5 |
| Employees’Compensation | 15,000 | PHP 30 | 0.0 |
| Worker’s Savings Investment Program | 5,500 | 9.5 | 4.5 |
| Health Insurance (PhilHealth)* | 100,000 | 2.50% | 2.50 |
| Home Development Mutual Fund(HDMF) | 10,000 | 2.0% | 2.0 |
Public Holidays 2024
| Occasional holidays | Date |
| New Year’s Day | 1.1 |
| Additional Non-Working Day for Chinese New Year | 2.9 |
| Chinese New Year | 2.10 |
| EDSA Revolution Anniversary | 2.25 |
| Maundy Thursday | 3.28 |
| Good Friday | 3.29 |
| Black Saturday | 3.30 |
| Day of Valour | 4.9 |
| Labour Day | 5.1 |
| Independence Day | 6.12 |
| Ninoy Aquino Day | 8.21 |
| National Heroes Day | 8.26 |
| All Saints’Day | 11.1 |
| Additional Non-Working Day | 11.2 |
| Bonifacio Day | 11.30 |
| Feast of the Immaculate Conception of Mary | 12.8 |
| Christmas Eve | 12.24 |
| Christmas Day | 12.25 |
| Rizal Day | 12.30 |
| Last Day of the Year | 12.31 |
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