Philippines · Hiring guide
Fluent English, mature BPO/customer-service talent, US-friendly culture; mandatory 13th-month pay, long Christmas break; dismissal splits into "just causes" (no severance) and "authorized causes" (separation pay), with strict procedure — unlawful dismissal means reinstatement + back pay.
2026 budgeting estimate, not a payroll filing result. Uses linear SSS 10%/5% to PHP35,000, PhilHealth 2.5%/2.5% to PHP100,000, Pag-IBIG 2%/2% to PHP10,000 and annualized TRAIN bands. Excludes discrete SSS MSC/EC, 13th-month exemption, MWE rules and BIR year-end reconciliation.
The 13th-month pay is mandatory by law — paid by Dec 24, an extra month. With high BPO churn, retention isn’t cheap.
Separation pay (only "authorized causes"): redundancy/labor-saving devices = 1 month’s wage or 1 month per year, whichever higher; retrenchment/closure (not from heavy losses)/disease = 0.5 month per year or 1 month, whichever higher. "Just causes" (employee fault): none.
Example: Wage ₱40,000, 4 years: redundancy → 4 × 1 month = 4 months = ₱160,000; if retrenchment → 4 × 0.5 = 2 months = ₱80,000 (each vs "1 month", whichever higher).
Source: Labor Code (PD 442) Art 297–299 · two-notice rule
Supporting detail
18/18 decision blocks · verified 2026-08-20 · review by undefined
Classify the real work as regular, probationary, project, seasonal, casual or a valid fixed term; a contract label cannot evade security of tenure. A written contract should identify the employer, role, location, start date, pay cycle/components, hours, leave, probation standards, confidentiality/IP and termination process. Terms below law, wage orders or a CBA do not prevail. Work usually necessary or desirable to the business is generally regular employment.
Probation generally may not exceed six months from the actual start of work, subject to statutory exceptions such as a valid apprenticeship. Reasonable regularisation standards must be disclosed at engagement. During probation, termination still requires just cause or failure against those disclosed standards and due process. An employee allowed to work after probation becomes regular; serial probation or temporary labels do not reset the clock.
Normal work is eight hours/day, with at least 24 consecutive rest hours after six consecutive normal workdays and generally at least a 60-minute meal period. Ordinary-day overtime carries at least a 25% hourly premium; work on a rest day or special day generally at least 30%; work from 10 p.m. to 6 a.m. adds at least a 10% night differential. Managers, field personnel, domestic workers and other statutory exclusions have different coverage, so one multiplier cannot be applied universally.
There is no single national minimum wage. Check the latest RTWPB order for the employee’s actual workplace, sector, establishment size and any valid exemption. By region (NCR non-agriculture PHP695/day under Wage Order NCR-26, effective 18 Jul 2025). The PHP755/PHP780 rates approved under NCR-27 are enjoined by the Pasig RTC and are not in force; under the same NCR-26 order, agriculture, retail/service with 15 or fewer workers, and manufacturing with fewer than 10 use PHP658/day (the corresponding NCR-27 rates of PHP718 and PHP743 are enjoined as well). Remote staff, transfers and kasambahay use their own location/category, not the company’s registered office.
A wage floor is not a professional-role offer. When using PSA’s 2024 Occupational Wages Survey, disclose that the sample is August 2024, covers formal establishments with at least 10 workers, and defines wage as basic pay plus regular cash allowances. The PHP21,544 all-industry national average is not a role median. Calibrate with current PhilJobNet vacancies by location, sector, seniority, base versus total cash and sample date.
Pay wages at least once every two weeks or twice a month at intervals not exceeding 16 days; do not substitute vouchers, notes or non-cash payment without the employee’s written request. Itemise basic pay, days/hours, overtime, night/holiday premiums, allowances, 13th-month accrual, statutory deductions and net pay, reconciled to attendance and bank proof. Final pay is generally released within 30 days from separation and a COE within three days after request; a disputed item is not an indefinite hold over the entire settlement.
Employers withhold each period and annualise under BIR tables effective from 2023, with rates of 0–35%; annual taxable compensation up to PHP250,000 is zero-rated and the first PHP90,000 aggregate 13th-month and similar benefits is generally exempt. From January 2025, SSS is 15% of MSC up to PHP35,000 (10% employer/5% employee), plus employer-paid EC. PhilHealth is 5% of monthly basic salary from PHP10,000 to PHP100,000, generally split equally. Pag-IBIG is generally 2% each, using a PHP10,000 Maximum Fund Salary and normally PHP200 maximum per side. File using official bands, status, absence rules and current receipts.
The current calculator is a monthly budgeting approximation: it applies continuous-pay SSS at 10%/5% to PHP35,000, PhilHealth at 2.5%/2.5% to PHP100,000, Pag-IBIG at 2%/2% to PHP10,000, and annualised TRAIN tax bands. It does not implement discrete SSS MSC bands and EC, PhilHealth basic-salary adjustments, the PHP90,000 13th-month exemption, minimum-wage-earner treatment, BIR year-end annualisation, bonuses/holiday/overtime or case exemptions. It is not an SSS, PhilHealth, Pag-IBIG or BIR filing result.
A generally covered employee receives at least five paid Service Incentive Leave days after one year, usable or convertible as the law provides. Employees already receiving equivalent paid leave and certain statutory exclusions require separate analysis. Five days is only the floor; contract, CBA, policy or established practice may be more generous. There is no universal private-sector statutory sick-leave allotment, so the five SIL days must not be presented as separate annual and sick leave balances.
Maintain the 2026 calendar from Proclamation 1006, later additions/movable dates and local special holidays. A qualifying unworked regular holiday is generally paid at 100%, and the first eight hours worked at 200%. A special non-working day is generally “no work, no pay” unless contract/policy provides otherwise, while the first eight hours worked is generally 130%. Rest-day overlap, successive holidays and overtime add current DOLE advisory rules; not every holiday is simply “double pay”.
Qualifying maternity leave is generally 105 paid days for live birth, plus 15 days for a qualified solo parent, and 60 days for miscarriage or emergency termination; the employer must administer SSS benefit and statutory salary differential. A married male employee generally receives seven paternity-leave days for the first four deliveries/miscarriages subject to statutory cohabitation and other conditions. Separately assess seven annual solo-parent leave days, up to 10 VAWC leave days and up to two months’ special leave after qualifying gynaecological surgery; eligibility, service, proof and payer differ.
Minimum wage, premiums, statutory leave, SSS/EC, PhilHealth, Pag-IBIG and occupational-safety duties are not optional benefits. Rank-and-file employees who served at least one month in the calendar year generally receive at least one-twelfth of total basic salary earned as 13th-month pay, due by 24 December and prorated for resignation/termination; it cannot disappear inside an “all-in salary”. State eligibility, waiting period, tax and exit treatment separately for private medical/HMO, life, meals, transport, bonuses and equity.
A regular employee may be dismissed only for a statutory just or authorised cause with due process. Just cause generally uses notice of charge, meaningful opportunity to respond/be heard, then notice of decision. Authorised cause requires separate written notice to the employee and DOLE at least 30 days ahead. Redundancy/labour-saving devices generally pay one month per service year with a one-month floor; retrenchment, non-serious-loss closure or disease generally one-half month per year with a one-month floor, rounding six months to a year. Illegal dismissal may mean reinstatement and full backwages; 30 days’ notice is not at-will termination.
Determine employment from facts such as selection/engagement, payment, dismissal power and control over work—not an invoice, personal registration or “independent contractor” label. Outsourcing also requires DO 174 checks of valid contractor registration, substantial capital/tools, independent business and service agreement. Labour-only contracting is prohibited, and the principal may share wage/labour-standard liability. An individual consultant, registered job contractor and licensed PEA are different relationships.
Incorporation, director/shareholder status, an offer, 9(a), or a 9(g) filing receipt creates no right to start work. Follow Philippines A2 and obtain the separate DOLE AEP/exclusion and matching BI status before work. While 9(g) is pending, temporary work starts only after separate PWP approval; listed short activities require SWP first. DO 248-25 AEP rules operate from 2025, and processing has been centralised at DOLE Central Office since 9 June 2026. Keep role, employer, location, term and cancellation/downgrading aligned.
PhilJobNet is DOLE’s official jobs and labour-market portal and can post vacancies free, but channel effectiveness still needs role/location, qualified rate, cost and retained-hire measurement. Before using a local Private Employment Agency, verify legal entity, licence, branch, validity and authorised activity under BLE’s current regime; overseas recruitment is separately regulated by DMW. Role, pay and conditions should agree across advertisement, interview and contract, with no unauthorised applicant fees passed through.
For private employees covered by RA 7641 without a better retirement plan, age 60 is optional and 65 compulsory, generally after at least five years with the establishment. The statutory minimum “one-half month salary” per service year includes 15 days’ pay, one-twelfth of 13th-month pay and up to five SIL days—commonly 22.5 days/year—with six months rounded to a year. Small retail/service/agricultural exclusions, CBA/plan terms, superior benefits and foreign status need case review.
Before hire: classification, written terms, probation standards, regional wage, AEP/BI and SSS/PhilHealth/Pag-IBIG/BIR master data. Each pay cycle: attendance, eight-hour/rest rules, overtime/night/holiday pay, statutory deductions and receipts; file monthly/quarterly to each agency deadline. Annually: refresh wage orders and tax tables in January, maintain national/local holidays, perform BIR annualisation, pay 13th month by 24 December, and review benefits/licences. At exit: cause/notices, DOLE notice, separation/retirement pay, 30-day final pay, three-day COE, social/tax and AEP/BI closure.
PH 13th-month is mandatory by Dec 24, not a discretionary bonus; unbudgeted, it crushed year-end cash flow.
What to do: Accrue 13th-month monthly; separate statutory from discretionary; keep records.
For a local employee on ₱30,000/month, employer monthly cost is about ₱33,950 (overhead +13.2%), ~₱437,400 annualized. Use the calculator as a budgeting estimate and verify payroll filings with the relevant authority.
Social (SSS) 15% (10%/5%, cap 35k) + health (PhilHealth) 5% + housing fund (Pag-IBIG, cap 200)
Depends on the ground: employee fault ("just cause") has no severance but needs "two notices + hearing"; economic ("authorized cause") requires separation pay — redundancy 1 month/year, retrenchment/closure 0.5 month/year (each vs 1 month, whichever higher), with 30 days’ notice to the employee + DOLE. Unlawful dismissal means reinstatement + back pay.
Mandatory, = basic wage paid that year ÷ 12, paid by Dec 24; separate from separation pay, SSS, etc.
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Deeply researched and maintained against official sources as of the verification date shown; rates and processes are for reference — for major decisions rely on each country’s authorities and local counsel.