Payroll and Benefits Guide Philippines

Last updated: May 02, 2023

Philippine Peso (PHP)
Employer Taxes
13.50% + 425 PHP
Payroll Frequency
Employee Costs
Date Format
Fiscal Year
1 January- 31 December
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Employer Payroll Contributions


Social Security System (SSS) (maximum contribution 2,155 PHP)


Philippine Health Insurance Corporation (PHIC) (salary ceiling 80,000 PHP PHP)


Home Development Mutual Fund (HDMF) (Pag-ibig)

425 PHP per month

Provident Fund (WISP)

13.50% + 425 PHP

Total Employment Cost


Employee Payroll Contributions


Social Security System (maximum contribution 1,250 PHP)

1.00% – Below 1,500 PHP

Home Development Mutual Fund (HDMF) (Pag-ibig)

2.00% – Above 1,500 PHP

Home Development Mutual Fund (HDMF) (Pag-ibig)


Philippine Health Insurance Corporation (PHIC)

225 PHP per month

Provident Fund (WISP)

Up to 9.50%+225 PHP

Total Employee Cost

Employee Income Tax

0.0% up to 250,000 PHP
15.0% of the excess over 250,000PHP 250,000 PHP – 400,000 PHP
22,500PHP+ 20% of the excess over 400,000PHP 400,000 PHP – 800,000 PHP
102,500PHP+25% of the excess over 800,000PHP 800,000 PHP – 2,000,000 PHP
402,500 PHP + 30% of the excess over 2 million PHP 2,000,000 PHP – 8,000,000 PHP
2,202,500 PHP+ 35% of the excess over 8 million PHP 8,000,000 PHP and over

Employer taxes


Employee taxes


Minimum Wage


The National Daily Minimum Wage in the Philippines is set per sector/industry, as below.

375 PHP for Non-Agriculture

375 PHP for retail/service employing 11 employees or more

345 PHP for retail/service employing less than 11 employees

345 PHP for Agriculture and Cottage & Handicraft




Payroll Cycle

The payroll cycle in the Philippines is generally monthly, paid on the last working day of the month.

13th Salary

A 13th salary must be paid on or before 24th December and is equivalent to one month’s pay (aguinaldo). Employers may choose to pay half in June and half in December.

Authority Payments

Authority Payment  Dates Methods


On the 10th

Social security

By the company ID but usually done on the 10th as well

Philippines health

By the company ID but usually done on the 10th as well


On the 10th

Private health care

Payments depend on the provider and are based on the insurance plan.

if there is an employee share its deducted in the payroll. Payment are prepaid by the company to the provider on an annual basis.

Retirement plan


payments made by the employer once a year.

13th salary

Annually; usually paid in December before Christmas

Working Hours


A standard work day is 8 hours, across 5 or 6 days per week.


Hours in excess of the regular workweek are considered overtime and are regulated by the employment contract or collective agreements. In general, overtime is paid at the rate of 125% of the regular pay. On regular holidays, double salary must be given. On special holidays, a minimum of 30% additional pay must be given. There is no limit to overtime hours.
Senior managers are excluded from overtime pay.

Working Week



Paid Time Off

Paid leave is a minimum of 5 working days per year after the completion of 1 year of employment.

If no carryover policy is in place, unused leave should be paid out.

Vacation Days
Public Holidays

Public Holidays

Public holidays that fall on the weekend are usually lost unless announced otherwise by the Government.

‘Regular Holidays’ are non-working paid days off. ‘Special Holidays’ are non-working unpaid days off, however, if someone works on this day salary must be paid.

Work on regular holidays are subject to additional 100% holiday rate for first 8 hours and additional 260% of hourly rate on overtime work after 8 hours.

For work on Special Non-Working holiday which falls on a weekend, work on this day is subject to 150% overtime rate for first 8 hours and additional 195% of hourly rate on overtime work after 8 hours.

Some religious holidays are determined by the lunar cycle and will show as ‘Tentative’ until they are confirmed nearer the date of the holiday.

Sick Days

There is no legal requirement to provide paid or unpaid sick leave. Workers can use their annual leave days to cover sickness. Many employers will create their own sickness policy above the statutory requirement.

Employees who have made contributions to the Social Security System (SSS) for a minimum of 3 months within the preceding 12 months can claim the equivalent to 90% of their average daily salary in the scenario that they are hospitalized for more than 3 days. Employers will make the initial payment once the employee has used all the paid sick leave allowance and will then be reimbursed by the Social Security System.

Special Leave for Women

Females employees who have at least six months of continuous service is entitled to 2 months leave with full pay for treatment/surgery of gynecological disorders. A medical certification is required for eligibility.

Maternity Leave

Female employees who have completed at least one year of service are entitled to 105 calendar days maternity leave. For single mothers, the entitlement is increased to 120 calendar days leave. If the worker has made at least three monthly contributions to the Social Security System in the 12-month period immediately preceding her childbirth or miscarriage, they will be paid a daily maternity leave benefit equivalent to 100% of the average daily salary. The employer will make the full payment and will be reimbursed by the Social Security System up to a cap of PHP 70,000.

Mothers can also choose to take an additional 30 days of maternity leave without pay.



Paternity Leave

Fathers are entitled to paid paternity leave of 7 calendar days from the child’s date of birth. Payment is made by the employer and reimbursed by the Social Security System.

Parental Leave

Solo parents with at least 1 year of service are entitled to 7 working days per year paid parental leave to care for children under the age of 18.

Domestic Violence Leave

A female employee who falls victim of domestic violence is entitled to paid leaves of up to 10 days paid leave to attend medical and legal concerns.


Termination Process

Terminating employment is possible for ‘just’ or ‘authorized’ causes as set out in the Labour Law and providing the correct legal procedure is followed. The burden is on the employer to prove the lawfulness of the employee’s dismissal in the proper forum.

‘Just’ causes include serious misconduct, willful disobedience, gross and habitual neglect of duties, fraud or willful breach of trust and commission of a crime.

‘Authorized’ causes are of two types – business reasons and health (diseases of a long term nature). The business reasons are installation of labor-saving devices, redundancy, retrenchment and closure or cessation of operation.

Where dismissal is based on a ‘just’ cause, the employer must give the employee two written notices and a hearing or opportunity to be heard before terminating the employment. Where dismissal is based on ‘authorized’ causes the employer must give the employee and the Department of Labour and Employment written notices 30 days prior to the effectivity of the separation.

The BIR 2316 form (Withholding Tax reporting of the employee) is a compulsory tax form that must be completed upon termination before final payment is released to the worker. Requirements for other documents, such as Quitclaim and resignation letters, can vary according to the specific policies and set up.

Notice Period

A minimum of 30 days’ notice period is required by law.

Severance Pay

Severance pay is applicable if the employer initiated the termination for ‘authorized’ causes and is equal to 1 months’ pay for every year of employment.

Probation Period

The probation period in the Philippines for definite employees is 6 months. Once the probation period is completed the employment contract becomes permanent.



Any foreigners coming to work in the Philippines are required by the Bureau of Immigration (BI) to secure a work visa.
Different work visas/permits are available depending on the individual’s circumstances, skills, and work type. The following documentation must be referenced, completed, and returned to the government agencies to fulfill this application.
For a work visa, the following documents need to be completed:

  • 9(g) Pre-Arranged Employee Commercial Visa
  • 9(g) Pre-Arranged Employee Non-Commercial Visa
  • Special Non-Immigrant Visa or 47(A)(2)
  • Special Non-Immigrant Visa under EO 226, as amended by RA 8756 (ROHQ)

For work permits:

  • Special Work Permit (SWP)
  • Provisional Work Permit (PWP)
  • Alien Employment Permit (AEP)

Remote Working


The Telecommuting Act that which applies to all employers and employees in the private sector that implement a telecommuting program.

The terms and conditions of telecommuting shall not be less than the minimum labor standards, or less than any applicable company policy or practice, individual contract, or collective bargaining agreement.

Telecommuting employees should be treated fairly and afforded the same treatment as employees who work at the regular workplace.

Any facilities or equipment or supplies that are necessary for the completion of work, are considered ordinary and necessary costs for the employer.
The employer should report the implementation of telecommuting arrangements to the DOLE (Department of Labor and Employment ).



The standard rate of VAT in the Philippines is 12%.

Papaya Global offers full Philippines PEO services for companies not wishing to open a local entity.

Stay up to date on payroll & employment law changes

Version History

June 21, 2023
Leave section has been updated.
January 15, 2023
Employee income tax has been updated.
Employee and employer payroll contributions have been updated.
February 27, 2022
Payroll contributions and personal income tax rates have been updated.
January 1, 2021
Monthly health premium has increased to 3.5%.

Questions & Answers

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M. Cortez
M. Cortez
2 years ago

What does the law say about employment contracts? Are they required?

Emily Kuhnert
Emily Kuhnert
2 years ago
Reply to  M. Cortez

Hi, good question. In the Philippines, there are no provisions in the law regarding the necessity to provide a written contract to prove that a person is employed at a specific company. That being said, we highly recommend written employment contracts as to avoid any conflict.

1 year ago

How long does a employee has to be in a company to have the February pay out?

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Ongyy

Please specify which payout you are referring to. There are 13 and 14 salaries but these are paid in June and December.

1 year ago

Is salary sacrifice possible in the Philippines? (for additional benefits for example)

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Phil

Technically there is no reason salary sacrifice can’t be done but it will depend on the company set up or policy.

lier join
lier join
1 year ago

ok thank you

Derrick Shogun
Derrick Shogun
1 year ago

I have question regarding the Employment Income Tax, are the amount stated in range, i.e. upto ₱250,000, in monthly income? Or are these in Annual? Thanks

Erez Greenberg
Erez Greenberg
11 months ago
Reply to  Derrick Shogun

Numbers are based on annual income.

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Payroll and Benefits Guide
in Philippines

What’s covered in this guide:

  • Employer/employee contributions
  • Minimum wage
  • Working hours
  • Visa requirements

And more...

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Public Holidays Calendar

Philippines 2023
Day Date Holiday Notes
Saturday Jan-1 New Year's Day
Friday Feb-24 EDSA People Power Revolution Holiday
Saturday Feb-25 EDSA People Power Revolution Special Non-working Holiday
Thursday Apr-6 Maundy Thursday
Friday Apr-7 Good Friday
Saturday Apr-8 Black Saturday Special Non-working Holiday
Sunday Apr-9 Day Of Valor
Saturday Apr-22 Eid Al-Fitr
Monday May-1 Labour Day
Monday Jun-12 Independence Day
Wednesday Jun-28 Eidul Adha
Monday Aug-21 Ninoy Aquino Day Special Non-working Holiday
Monday Aug-28 National Hero's Day
Monday Oct-30 Local Regional Elections Special Non-working Holiday
Wednesday Nov-1 All Saints Day Special Non-working Holiday
Thursday Nov-2 All Soul’s Day Special Non-working Holiday
Thursday Nov-30 Andres Bonifacio Day
Friday Dec-8 Feast of Immaculate Conception of Mary Special Non-working Holiday
Monday Dec-25 Christmas Day
Saturday Dec-30 Jose Rizal Day
Sunday Dec-31 Last Day of the Year Special Non-working Holiday