# Hiring in Philippines: employment costs, payroll and compliance

> Machine-readable page from EOR Overview (https://eoroverview.com/), an independent research platform for Employer of Record services.
> Canonical page: https://eoroverview.com/hiring-guides/philippines/
> Methodology: how providers are researched, scored and compared is documented at https://eoroverview.com/methodology/.
> Disclosure: EOR Overview is free to use. We may earn a referral fee from some providers; this never affects a rating or ranking position (https://eoroverview.com/disclosure/).
> Statutory data last updated: 2026-01-12. Every figure below carries its own source year.

## Country

| Field | Value |
|---|---|
| Region | Asia |
| Currency | PHP (Philippine Peso) |

## Pay & working time

| Field | Value | Source year |
|---|---|---:|
| Minimum wage | ₱8,302 | 2024 |
| Statutory work week | 48 hours/week | 2024 |
| Payroll cycle | semi-monthly | 2026 |
| 13th-month salary | mandatory | 2026 |

## Employer cost & tax

| Field | Value | Source year |
|---|---|---:|
| Employer social security | 2.5% | 2024 |
| Employee social security | 2.5% | 2024 |
| Corporate tax rate | 25% | 2026 |

## Termination

| Field | Value | Source year |
|---|---|---:|
| Notice period | 4.3 weeks | 2022 |
| Severance pay | 23.1 weeks | 2022 |

## Leave & time off

| Field | Value | Source year |
|---|---|---:|
| Paid annual leave | 5 days | 2026 |
| Public holidays | 18 days | 2026 |
| Maternity leave | 15 weeks | 2026 |
| Paternity leave | 1 week | 2026 |

## Labour market

| Field | Value | Source year |
|---|---|---:|
| Retirement age | 60 | 2026 |
| Unemployment rate | 2.2% | 2025 |
| GDP per capita | $3,985 | 2024 |
| Union density | 8.5% | 2020 |
| Collective bargaining coverage | 1.4% | 2018 |

## Overview

Before your first hire in the Philippines receives a single peso, you need either a registered local entity or an Employer of Record (EOR) in place. There is no middle ground. An EOR lets you skip the entity setup and start hiring quickly, which matters in a labour market of more than 52 million workers with an unemployment rate sitting at just 2.2%.

The numbers that shape your budget most directly are the employer social security contribution of 14.5% of gross salary, a mandatory 13th-month salary paid every December, and a statutory work week of 48 hours. Payroll runs on a semi-monthly cycle, so your payroll processes need to match that cadence from day one.

## Cost context

On top of gross salary, a Philippine employer contributes 9.5% to the Social Security System (SSS), 2% to PhilHealth, and 2% to the Pag-IBIG Fund (HDMF), bringing the total statutory employer contribution to 14.5% of gross. Add the mandatory 13th-month salary and you have the two biggest cost lines beyond base pay to plan for.

## Things to watch

A few things in the Philippines stand out as easy to underestimate if you are used to hiring elsewhere.

- Mandatory 13th-month salary. This is not discretionary or a market norm you can opt out of. Every employee is legally entitled to it, so budget for roughly one extra month of base salary per year per hire.

- Employer social security at 14.5%. This is split across three funds (SSS, PhilHealth, and Pag-IBIG), but the total sits at 14.5% of gross. Factor this in early when modelling total employment cost.

- Severance of 10.8 weeks. Termination is not cheap, and Philippine labour law is protective of employees. If a role does not work out, the severance obligation is real and worth pricing into your risk model upfront.

- 18 public holidays. The Philippines has one of the higher public holiday counts in the region. This affects project timelines and any work-scheduling assumptions you bring from other markets.

Providers ranked for Philippines: https://eoroverview.com/best/philippines/