Philippines · Hiring guide
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.
What it costs
what one hire really costsThe 13th-month pay is mandatory by law — paid by Dec 24, an extra month. With high BPO churn, retention isn’t cheap.
How hard
can you get in and out?- mature BPO / customer-service / shared-services
- US-aligned culture, fluent English
- probation up to 6 months
- just cause (fault): no severance but two notices
- authorized cause: separation pay + 30-day notice to DOLE
- illegal dismissal → reinstatement + back pay
- Just causes (employee fault): serious misconduct, gross habitual neglect, fraud, crime, etc. — no severance, but must run "two notices + hearing".
- Authorized causes (economic/business): installing labor-saving devices, redundancy, retrenchment, closure, incurable disease — separation pay required.
- Note: regular employees enjoy security of tenure — no dismissal without cause.
- 1.Just cause: follow the "two-notice rule" (first notice states the charges → employee answers/hearing → second notice decides).
- 2.Authorized cause: 30 days’ written notice to the employee + the Labor Dept (DOLE).
- 3.Pay separation pay by ground (below); settle 13th-month / unused leave / SSS, etc.
- 4.Defective cause or procedure = unlawful dismissal; labor arbitration (NLRC) may order reinstatement + back pay.
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).
- Distinguish "just causes" (no severance) from "authorized causes" (separation pay) — the wrong ground/procedure = unlawful dismissal.
- The "two notices + hearing" procedure must be completed in full; a missing step is a procedural violation, payable even if the cause stands.
- Authorized causes require 30 days’ notice to both the employee and DOLE.
- 13th-month pay, unused leave and other accrued rights must be settled together.
Source: Labor Code (PD 442) Art 297–299 · two-notice rule
Supporting detail
How to start
first stepsWhat bites you
what others got wrongPH 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.
FAQ
What’s the all-in employer cost of one hire in Philippines?
For a local employee on ₱30,000/month, employer monthly cost is about ₱33,950 (overhead +13.2%), ~₱437,400 annualized. Use the calculator for your actual wage.
How are employer social contributions paid in Philippines?
Social (SSS) 15% (10%/5%, cap 35k) + health (PhilHealth) 5% + housing fund (Pag-IBIG, cap 200)
How much is severance for dismissal in the Philippines?
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.
How is 13th-month pay calculated in the Philippines?
Mandatory, = basic wage paid that year ÷ 12, paid by Dec 24; separate from separation pay, SSS, etc.
Deeply researched and verified against official bodies, auto-updated; rates and processes are for reference — for major decisions rely on each country’s authorities and local counsel.