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- Employee Cost Calculator
- Philippines
Employee cost calculator in Philippines
Looking to hire in Philippines? Our Employee Cost Calculator gives you a clear view of expenses including taxes and employer contributions.
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Request a demoFrequently Asked Questions (FAQs)
What are the mandatory employment costs and statutory benefits employers must provide in the Philippines?
Employers in the Philippines are required to contribute to the Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund (Pag-IBIG Fund) for each employee. Additional statutory benefits include the 13th month pay, service incentive leave (minimum 5 days per year), and coverage under the Employees' Compensation Program (ECP).
How are payroll taxes and employer/employee contributions calculated in the Philippines?
Payroll tax in the Philippines mainly refers to withholding tax on compensation, which employers must deduct from employee salaries based on Bureau of Internal Revenue (BIR) tax tables. Employers also remit SSS (8.5% employer share), PhilHealth (4% of monthly salary, split between employer and employee), and Pag-IBIG (2% employer share on up to PHP 5,000 monthly salary) contributions, alongside the employee's shares.
What are the common hidden or indirect costs when hiring employees in the Philippines?
Common hidden costs include the mandatory 13th month pay (equivalent to one-twelfth of annual basic salary), separation or retirement pay as required by the Labor Code, and additional pay for overtime, night shift, and holiday work. Employers should also budget for administrative overheads, onboarding, and government-mandated remittances beyond basic salary.
What legal requirements affect the total cost of employment in the Philippines?
Legal requirements impacting costs include adherence to regional minimum wage rates (set by the Regional Tripartite Wages and Productivity Boards), compliance with regulated working hours (8 hours/day, 40–48 hours/week), and observance of overtime, holiday, and premium pay rules. Termination procedures require due process and may entail severance pay or separation benefits depending on the reason for dismissal.
What are the typical employment practices and contract types in the Philippines that influence cost?
Probationary employment is limited to a maximum of 6 months, during which statutory benefits must still be provided. Regular, fixed-term, and project-based contracts are common, with regular employees entitled to full statutory benefits, while fixed-term and project-based employees may have benefits prorated based on contract duration. Customary benefits such as allowances, healthcare, and bonuses beyond those required by law are prevalent in competitive industries.
