philippines

Employer of Record & PEO in the Philippines

Hire & manage teams remotely in the Philippines without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.

Native Language

Pilipino, English

Employee Protection

Medium

Payroll Frequency

Monthly

Capital city

Manila

Termination

Easy

Internet

Slow

Currency

Philippine Peso (PHP)

Immigration

Hard

English Speaking

>50%

Population

109.04 Million

Employment Cost

Low

Cost of Living

Medium

How NNRoad Employment & PEO Services Work?

NNRoad provides professional employment organization (PEO) & employer of record (EOR) services for companies looking to hire and manage teams in the Philippines. Registering a legal entity in the Philippines as a means for employment is an outdated practice that takes both time (months) and money (thousands of USD). NNRoad’s employer of record and PEO services enables companies to hire and manage employees in the Philippines in full accordance with local labor laws in under a week.

Employer of Record in the Philippines

Employer of Record (EOR) services are for companies who do not have a legal entity in the Philippines, but who want to hire in the Philippines. Employment and full liability are outsourced to NNRoad.

➊ You interviews & select the candidates you want to hire in the Philippines.
➋ NNRoad arranges a local labor contract with your new employee.
➌ NNRoad arranges a service contract between your organization & NNRoad.
➍ NNRoad organizes, manages & processes  payroll in the Philippines in full compliance with local employment laws.
➎ You maintain a normal working relationship and manage your team in the Philippines while NNRoad manages payroll & HR liabilities.

  • Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, background check, coordination for interviews, and assistance for salary negotiation
  • Hiring of and termination of employees/local labor contracts (contract administration)
  • On-boarding and off-boarding employees following local law practice
  • Complete payroll solution and statutory benefit administration
  • Employee management – employee handbook, employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management, and contingent workforce management
  • Work VISA application assistance, if needed

Payroll & PEO in the Philippines

Professional Employment Organization (PEO) services are for companies who have a legal entity in the Philippines, and want to outsource their payroll. Employment liabilities are shared between your organization and NNRoad.

➊ You interviews & select the candidates you want to hire in the Philippines.
➋ NNRoad organizes, manages and processes payroll for your local employees in full compliance with local employment laws.
➌ You maintain a normal working relationship and manage your team in the Philippines while NNRoad manages payroll & HR compliance.

  • Registering the necessary company and personnel information for payroll calculation in the payroll software and system
  • Monthly Payroll Processing
  • Year-End Adjustment and Annual Declaration

Advantages of NNRoad's Philippines Employment Services

  1. With EOR/PEO solutions you can manage client meetings, sales, quality control, marketing, R&D and customer support without a local company in the Philippines.
  2. Pay as you go
  3. ​​Dedicated account manager – One point of contact for multiple locations
  4. Employment & termination processing
  5. Complete payroll solution and statutory benefit according to local laws
  6. With EOR/PEO solutions you can hire staff while waiting for the registration of your company in the Philippines.
  7. NNRoad only works with professional locally licensed partners
  8. GDPR compliant
  9. NNRoad manages employee record timekeeping, bonus and allowance, expenses claims and personal leaves according to local law.
  10. NNRoad provides foreigner VISA application services, if needed

Employment Compliance in the Philippines

Taxes & Payroll in the Philippines

Employee Income Taxes:

Individual income tax rates in the Philippines are based on progressive tax brackets with an additional fixed tax cost for the 3rd bracket onwards. Incomes at or bellow 250,000 PHP per year are not taxed.

Tax Brackets

0%: 0 – 250k PHP
20%: 250k – 400k PHP
25% + 30k PHP: 400k – 800k PHP
30% + 130k PHP: 800k – 2000k PHP
32% + 490k PHP: 2000k – 8000k PHP
35% + 2410k PHP: >8000k PHP

Sample Calculation

Due to the complicated nature of the individual income tax in the Philippines, please contact us for queries. 

Employer Costs in the Philippines

Employer Contributions:

Employers must pay contributions based on the salary of their 75 – 1,180 PHP to Social Security 1.4% – Health Insurance 2% – Home Development Mutual Fund

Employee Contributions:

36 – 580 PHP to Social Security
1-2% – Home Development Mutual Fund
1.375%: Health Insurance

Working Hours in the Philippines

Working Hours per Week

The work week in the Philippines is 48 hours per week, and 6 to 5 days per week. Work days cannot exceed 12 hours and employees must be given a 1 hour lunch break.

Benefits & Insurance in the Philippines

Healthcare

The Philippines has a universal healthcare funded with payroll taxes called PhilHealth. Private healthcare is also common and affordable. The Private Healthcare system is used by 30% of the population and many employers offer benefits for private medical insurance.

Termination Laws in the Philippines

Severance

To end an employee contract, a one month’s notice must be given and a severance payment is due unless the reason for termination is redundancy. Otherwise, the terminated employee is entitled to a half-month salary for each year worked.

If the reason for termination is sick leave, the relevant public health authorities need to issue a letter stating that the employee cannot heal within a six month period.

Public Holidays in the Philippines

Public Holidays in the Philippines

There are 2 types of holidays in the Philippines: regular holidays and Special no-work holidays. Regular holidays are paid days off work. Employees working during regular holidays are entitled to 200% of their regular wages. Special no-work holidays are non-paid days off work. Employees working during special no-work holidays are entitled to 130% of their regular wages.

  • New Year’s Day – January 1
  • Maundy Thursday – (movable date)
  • Good Friday (movable date)
  • Eidul Fitr(movable date)
  • Eidul Adha(movable date)
  • Araw ng Kagitingan – April 9
  • Labor Day (Monday nearest 1 May)
  • Independence Day (Monday nearest 12 June)
  • National Heroes Day (Last Monday of August)
  • Bonifacio Day (Monday nearest 30 November)
  • Christmas Day – Dec 25
  • Rizal Day (Monday nearest 30 December)

Paid Leave in the Philippines

Employees in the Philippines are entitled to 5 days off annual paid leave or sick leave. Despite this, it is common for employers to offer 15 days paid leave and 15 days sick leave professional level positions.

Employment Contract in the Philippines

Employment Contract

The Labor Code of the Philippines dictates the guidelines for all employee/employer relations, specifically on issues such as wages, post-employment benefits, labor standards, safety and health, and conciliation and arbitration procedures.

Probation Period

Under the Labor Code, probationary employment shall not exceed 6 months from the date the employee started working unless it is covered by an apprenticeship agreement stipulating a longer period.

Types of Leaves in the Philippines

Annual Leaves

Annual leave in the Philippines is a mandatory 5 days, altho 15 days is the norm for competitive companies. Every employee is also entitled to paid public holidays on top of the annual leaves.

Sick Leave

Sick leaves in the Philippines are treated as annual leave days according to the law, although most companies will offer 15 sick leave days as well as 15 annual leave days.

Maternity Leave

New mothers in the Philippines are entitled to 60 days (78 days in case of caesarean delivery) paid at full salary. The employer can request  reimbursement from state social security

Paternity Leave:

New fathers  in the Philippines are entitled to 7 days of paid paternity leave following the birth of their child.

Other Types of Leave:

Women who are victims of violence are entitled to 10 days paid leave.

Women who undergo surgery due to gynecological disorders are entitled to 2 months’ full pay from their employer.

Immigration Laws in the Philippines

Foreign employees must secure a job with a company based in the Philippines before applying for a resident work visa. To apply, the following documents are required:

  • A completed work visa application form
  • Foreign employee’s passport
  • A notarized certification of the employer’s headcount of foreign and Filipino employees
  • A certified copy of the AEP issued by the Department of Labor and Employment (DOLE)
  • A newspaper copy that shows the publication of the AEP application by DOLE
  • A certificate of clearance from the Philippines Bureau of Immigration (B.I.)
  • An alien certificate of registration
  • Copies of the employment contract, the Articles of Incorporation (AOI), and the Securities and Exchange Commission (SEC) certification
  • Any additional documents that support the applicant’s employment

Resources

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