The Philippines is one of the world's largest hubs for customer support, operations, finance, design and software talent, with a large English-speaking workforce in Metro Manila, Cebu, Davao and Clark. Statutory employer contributions are modest and capped, but 13th-month pay is mandatory, and private health cover (HMO) is effectively standard.
An Employer of Record (EOR) can employ your team under Philippine labour law, registering them with SSS, PhilHealth and Pag-IBIG and handling payroll, without you meeting the high capital requirements for a foreign-owned company.
Because Philippine salaries are lower than in Europe or North America, a flat EOR fee can be a large share of total cost, so pricing deserves close attention. The Philippines also strictly prohibits labour-only contracting, which affects how EOR providers must operate. This guide covers costs, rules, provider comparison and when to set up a local entity. Figures link to official sources. We do not test or use the providers listed; see our methodology.
An Employer of Record in the Philippines employs staff for foreign companies. It signs the Philippine employment contract, registers the employee with the Social Security System (SSS), the national health insurer (PhilHealth) and the home development fund (Pag-IBIG), withholds income tax for the Bureau of Internal Revenue (BIR), pays the 13th-month pay, and handles leave and termination under the Labor Code.
Philippine law prohibits labour-only contracting, where a contractor merely supplies workers without substantial capital or control over the work, and regulates legitimate contracting under Department of Labor and Employment (DOLE) rules. If an arrangement is found to be labour-only contracting, the client is treated as the direct employer.
Ask each provider how its Philippine structure complies with DOLE contracting rules, including whether it is registered as a legitimate contractor where required, and take local advice for large teams.
Philippine employment cost has four layers: basic salary (12 months), 13th-month pay, statutory contributions (SSS, PhilHealth, Pag-IBIG, each with a salary ceiling) and the EOR fee.
Because contributions are capped, statutory costs are modest at professional salaries. The EOR fee is often the biggest add-on, so compare quotes carefully.
Annual cost at example salaries
| Annual cost | Support / operations | Mid-level professional | Senior professional | Lead / manager |
|---|---|---|---|---|
| Gross salary (annual) | ₱420,000 | ₱720,000 | ₱1,200,000 | ₱2,400,000 |
| Paid as 12 payments of | ₱35,000 | ₱60,000 | ₱100,000 | ₱200,000 |
| 13th-month pay[3]Verify8.333% of gross | ₱35,000 | ₱60,000 | ₱100,000 | ₱200,000 |
| SSS (employer share)[4]Verify10% of gross, up to ₱420,000 | ₱42,000 | ₱42,000 | ₱42,000 | ₱42,000 |
| Employees' Compensation (EC)[4]Verify₱360 / year | ₱360 | ₱360 | ₱360 | ₱360 |
| PhilHealth (employer share)[5]Verify2.5% of gross, up to ₱1,200,000 | ₱10,500 | ₱18,000 | ₱30,000 | ₱30,000 |
| Pag-IBIG (employer share)[6]Verify2% of gross, up to ₱120,000 | ₱2,400 | ₱2,400 | ₱2,400 | ₱2,400 |
| Total employment cost | ₱510,260 | ₱842,760 | ₱1,374,760 | ₱2,674,760 |
| EOR feeVerify₱34,000 / month | ₱408,000 | ₱408,000 | ₱408,000 | ₱408,000 |
| Total annual cost via EOR | ₱918,260 | ₱1,250,760 | ₱1,782,760 | ₱3,082,760 |
| Multiple of gross salary | 2.19× | 1.74× | 1.49× | 1.28× |
What these figures include and exclude
- Statutory contributions are capped: SSS at a PHP 35,000 monthly salary credit, PhilHealth at PHP 100,000, and Pag-IBIG at PHP 10,000.
- Employee contributions and withholding tax are deducted from pay and are not employer costs. 13th-month pay and other bonuses are tax-free up to PHP 90,000 a year.
- Night-shift work (common in support roles serving the Americas) requires a night differential of at least 10% for hours between 10pm and 6am.
- Regular holidays worked are paid at 200%, and special non-working days at 130%. Holiday and overtime premiums are not included above.
Estimate your own cost
Enter a salary to see the estimated annual cost, including mandatory employer contributions and an EOR fee. Change the fee to match the quotes you receive.
Philippines employment cost estimator
Estimated total annual cost
₱1,250,760
≈ ₱104,230 per month on average · 1.74× gross salary
- Gross salary
- ₱720,000
- 13th-month pay8.333%
- ₱60,000
- SSS (employer share)10%
- ₱42,000
- Employees' Compensation (EC)
- ₱360
- PhilHealth (employer share)2.5%
- ₱18,000
- Pag-IBIG (employer share)2%
- ₱2,400
- Employer costs subtotal
- ₱122,760 (17.1%)
- EOR fee (12 months)
- ₱408,000
- Total
- ₱1,250,760
Estimate only. Percentage costs are applied to total annual gross pay, up to any contribution ceiling. Real payroll uses specific bases, and collective agreements may add costs. Employee social security and income tax are deducted from gross pay and are not employer costs.
Compliance
Key Philippines employment rules
Philippine employment is governed by the Labor Code and DOLE regulations, with a strong emphasis on security of tenure once an employee is regularised.
- Contracting (EOR relevance)
Labour-only contracting is prohibited. Legitimate contractors must meet DOLE requirements; otherwise the client is deemed the employer.[2]Verify
- Probationary employment
Up to 6 months. The standards for regularisation must be communicated at the start; after probation the employee becomes regular.[1]Verify
- Working time
Normal hours are 8 a day. Overtime is paid at a premium of at least 25%, and work on rest days at 130%.[1]Verify
- Leave
5 days of service incentive leave a year after one year of service. Most employers offer 10–15 days of vacation and sick leave.[1]Verify
- 13th-month pay
Mandatory for rank-and-file employees: one twelfth of total basic salary for the year, paid by 24 December.[3]Verify
- Maternity and paternity leave
105 days of paid maternity leave (benefit paid via SSS, with the employer paying the salary difference) and 7 days of paternity leave.Verify
- Termination
Regular employees can only be dismissed for just causes (misconduct-related) or authorised causes (such as redundancy), with due process.[1]Verify
Authorised-cause dismissals require 30 days' notice to the employee and DOLE, and separation pay of half a month to one month per year of service.
These EOR providers publish information about employing in the Philippines. Prices are their own published starting rates in USD. Because salaries are lower, a flat fee is a large share of total cost, so ask for Philippines-specific pricing.
Also ask how the provider complies with DOLE contracting rules, which HMO plan it offers, and how night differential and holiday pay are handled in payroll.
| Provider | Published EOR price | Delivery model in the Philippines | Notes | Visit |
|---|---|---|---|---|
| Deel | From US$599per employee / monthVerify | Confirm structure and DOLE compliance | Also supports contractors; check Philippines pricing. | Visit |
| Remote | From US$599per employee / monthVerify | Owned entities (provider's stated model) | Annual billing rate; monthly billing costs more. | Visit |
| Oyster | From US$699per employee / monthVerify | Confirm structure and DOLE compliance | Plan tiers; check which tier includes EOR. | Visit |
| Multiplier | From US$400per employee / monthVerify | Confirm structure and DOLE compliance | Asia-Pacific focus; lowest published starting price here. | Visit |
| Globalization Partners (G-P) | Quote-basedVerify | Confirm structure and DOLE compliance | Enterprise focus; quote-based. | Visit |
- DeelFrom US$599Verify
- Delivery model:
- Confirm structure and DOLE compliance
- Notes
- Also supports contractors; check Philippines pricing.
- RemoteFrom US$599Verify
- Delivery model:
- Owned entities (provider's stated model)
- Notes
- Annual billing rate; monthly billing costs more.
- OysterFrom US$699Verify
- Delivery model:
- Confirm structure and DOLE compliance
- Notes
- Plan tiers; check which tier includes EOR.
- MultiplierFrom US$400Verify
- Delivery model:
- Confirm structure and DOLE compliance
- Notes
- Asia-Pacific focus; lowest published starting price here.
- Globalization Partners (G-P)Quote-basedVerify
- Delivery model:
- Confirm structure and DOLE compliance
- Notes
- Enterprise focus; quote-based.
For each provider's products, pricing model and fit signals, see the EOR provider directory.
Setting up your own presence usually means a domestic corporation registered with the Securities and Exchange Commission (SEC), or a branch or representative office. Foreign-owned companies serving the domestic market generally need paid-in capital of US$200,000 (reducible to US$100,000 in some cases, such as advanced technology or employing 50+ local staff). Export enterprises that sell at least 60% of their services abroad, such as BPO and remote-support operations, face much lower capital requirements.
Running costs include accounting and BIR filings, payroll, local government business permits, corporate income tax (generally 20–25%), and registrations with SSS, PhilHealth and Pag-IBIG. Incentive regimes (for example, PEZA-registered IT parks) can reduce taxes for export operations.
| Factor | Employer of Record | Philippine entity |
|---|---|---|
| Time to first hire | Typically 1–2 weeks | Often 2–4 months (SEC, BIR, local permits, agency registrations) |
| Capital requirement | None beyond a deposit | Up to US$200,000 for domestic-market foreign companies; lower for exporters |
| Ongoing fixed cost | None; scales per employee | Accounting, payroll, permits, office if PEZA-registered |
| Contracting rules | Provider must be a legitimate contractor | Not applicable; you employ directly |
| Legal employer | The EOR | Your Philippine entity |
| Exit | Terminate employment; end service agreement | Terminations plus SEC dissolution and BIR closure |
An EOR usually fits when…
- You're hiring your first few people in the Philippines
- You want people started within one to two weeks
- You don't want to commit capital to a local entity
A Philippine entity usually fits when…
- You're building a team of roughly 10–20 or more (common for support and operations hubs)
- You qualify as an export enterprise with lower capital requirements and incentives
- Flat EOR fees have become a large share of your total cost
For a step-by-step version of this calculation, see EOR vs local entity: a break-even framework.
- 1
Define the role, salary and scheduleDay 0
Agree a monthly basic salary, working schedule (including any night shift), HMO cover and leave above the statutory minimum.
- 2
Compare itemised quotes1–3 days
Request Philippines quotes covering the fee, deposit, HMO, night differential handling and offboarding. Use the estimator to sanity-check totals.
- 3
Sign the service agreement
Review DOLE compliance, termination cost handling, IP assignment and data privacy (Data Privacy Act) terms.
- 4
Contract and onboarding3–7 days
The EOR issues a Philippine contract with clear probation standards. The employee provides their TIN, SSS, PhilHealth and Pag-IBIG numbers and bank details.
- 5
Ongoing administrationSemi-monthly
Semi-monthly payroll, monthly contribution remittances, BIR withholding filings and 13th-month pay in December.
Sources
Official resources
Rates and rules on this page are based on the following official sources. Numbers in brackets in the tables above link to these entries.
- 1Labor Code of the Philippines
Department of Labor and Employment (DOLE)
Working hours, leave, probation and termination rules.
- 2Department Order 174-17: contracting and subcontracting
Department of Labor and Employment (DOLE)
Rules on legitimate contracting and the prohibition of labour-only contracting.
- 3Presidential Decree No. 851: 13th-month pay
Official Gazette of the Philippines
The mandatory 13th-month pay requirement.
- 4Contribution schedule
Social Security System (SSS)
Employer and employee contribution rates and salary credits.
- 5
- 6
- 7Regional minimum wage rates
National Wages and Productivity Commission (NWPC)
Current daily minimum wages by region.
The Philippines has low statutory employer costs, but the EOR fee can dominate: total cost ranges from about 1.3× salary for senior hires to 2× or more for support roles at a flat US$599-equivalent fee. Negotiate Philippines-specific pricing.
Confirm each provider's DOLE contracting compliance, set clear probation standards from day one, and budget for HMO cover, which candidates expect.
For larger support or engineering hubs, compare against your own entity with our EOR vs local entity guide, and see India for Asia's other major talent market.
Ready to compare providers?
Review published pricing and fit signals side by side, then request itemised Philippines quotes from two or three providers.