A written employment contract is strongly recommended in the Philippines. It should detail the job title, salary, benefits, work hours, and job responsibilities to comply with Filipino labor laws and to avoid potential disputes, providing legal clarity for both parties involved.
Employer of Record (EOR) Philippines
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Simple & Compliant Hiring with Globaine's Employer of Record (EOR)
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Globaine takes care of all compliance matters, including payroll, taxes, and legal obligations, while providing seamless hiring processes. Our platform ensures that every aspect of employee management in the Philippines is handled efficiently and in full compliance with local regulations.
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We draft bilingual contracts compliant with Filipino labor law.
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in the Philippines
A written contract should always be in place before the employee starts work, especially for foreign nationals and specific employment types (e.g., fixed-term or probationary), as it serves as a fundamental basis of legal protection for both employer and employee.
Salary details must be stated in Philippine pesos (PHP) and clarify the frequency of payments, which is typically on a bi-weekly or monthly basis. Globaine ensures these details are accurately outlined in compliance with Filipino wage laws, and adjustments are made when regulations are updated.
Non-compete, non-solicitation, and confidentiality clauses are commonly included to protect business interests. Employers should also consider a clause for work-from-home or flexible work arrangements, which have gained popularity in the Philippines, as well as clarify any provisions on intellectual property.
An Employer of Record (EOR) is a third-party organization that manages all legal and administrative responsibilities of employing staff on behalf of another company. This includes payroll, tax compliance, employment contracts, benefits administration, and adherence to local labor laws. An EOR allows businesses to hire employees in new countries without establishing a local entity, enabling faster and compliant global expansion.
Choosing an EOR in the Philippines allows businesses to manage compliance with labor laws, avoid the complexities of setting up a local entity, and streamline HR operations. EOR services ensure payroll compliance, tax filings, and employee benefits management, helping companies focus on business growth.
in the Philippines
1. What are the key steps in employee onboarding in the Philippines?
Key steps include obtaining a Tax Identification Number (TIN), Social Security System (SSS) number, and Pag-IBIG Fund (a government savings program). Employees may also be required to obtain a PhilHealth number for public health benefits, providing a foundation for lawful employment and access to employee benefits.
2. When are pre-employment medical exams required in the Philippines?
A pre-employment medical check is advised, especially for roles in healthcare or industries with high physical demands, to ensure the employee is fit for work as per Philippine labor regulations, reducing risks of occupational health issues.
3. What documents are required for onboarding in the Philippines?
Employees must provide a valid TIN, SSS, Pag-IBIG, and PhilHealth details, along with any identification documents required by Globaine’s onboarding process. These are necessary to ensure compliance with local laws and to secure access to various government-provided employee benefits.
4. Why businesses in Philippines need EOR services?
5. How does EOR in Philippine different from other countries?
in the Philippines
Payroll is typically managed bi-weekly or semi-monthly. Employees may receive a 13th-month bonus by law, usually distributed in December, as an extra monthly payment. Globaine ensures this structure is implemented accurately for compliance, contributing to employee satisfaction and retention.
Employers are encouraged to offer home office allowances or reimbursements for remote work-related expenses such as internet and electricity. These benefits are often negotiated in the employment contract, providing financial support for remote setups and fostering work-life balance.
Minimum wage varies by region and industry, with Manila, for instance, setting it around PHP 570 per day. Globaine ensures that employee pay meets or exceeds the legal minimum based on location, helping clients maintain a positive reputation with fair labor practices.
in the Philippines
1. What are the income tax rates in the Philippines?
Income tax rates range from 0% to 35%, depending on income brackets. Non-residents are generally taxed at a flat rate of 25%, with Globaine ensuring correct categorization and reporting to meet tax obligations smoothly.
2. How are taxes managed for non-residents in the Philippines?
Non-residents working in the Philippines are subject to withholding tax, generally at a flat rate, based on their income. Employers are responsible for proper tax withholding and reporting, which Globaine handles with precision, minimizing tax risks.
3. When should tax returns be submitted in the Philippines?
Tax returns for employees are due on or before April 15 of the following year. Employers are responsible for filing these on behalf of employees, along with regular withholding tax submissions, ensuring timely compliance to prevent penalties.
4. What social contributions are mandatory in the Philippines?
Employers contribute to SSS, PhilHealth, and Pag-IBIG. The contributions cover social insurance, health insurance, and housing benefits, respectively, creating a well-rounded benefits structure required by law.
in the Philippines
Employees are entitled to five days of service incentive leave, which can be used for vacation or sickness. Many companies also provide additional leave benefits, promoting a healthier work-life balance for all employees.
Employees become eligible for leave benefits after one year of service. Some companies offer prorated leave during the first year as an added benefit, helping in talent retention and showing commitment to employee well-being.
Maternity leave is 105 days, with an optional 15-day extension. Paternity leave is seven days, with additional leave possible under specific arrangements or employer policies, supporting family-centered leave benefits.
in the Philippines
1. What mandatory benefits must be provided in the Philippines?
Employers must provide social security (SSS), health insurance (PhilHealth), and housing (Pag-IBIG) benefits. These are statutory benefits that every employer is required to comply with, serving as a safeguard for employees’ well-being.
2. How is the work-from-home allowance structured in the Philippines?
While not legally mandated, work-from-home allowances are increasingly common and may include reimbursements for utilities, internet, or office supplies to support remote employees, encouraging flexible work arrangements.
3. Are meal or transportation allowances required in the Philippines?
Meal and transportation allowances are common in the Philippines, though not mandatory. They are often provided to enhance employee welfare, particularly for on-site roles, demonstrating a commitment to employee welfare beyond basic salary.
4. What other benefits are typical in the Philippines?
Private health insurance, life insurance, and transport allowances are popular. Additionally, companies may offer performance bonuses, professional development allowances, and wellness programs, supporting comprehensive employee satisfaction.
TERMINATIONS
in the Philippines
The notice period typically ranges from 30 days for regular employees, but specific employment contracts may outline shorter or longer periods depending on the role and tenure, ensuring fairness in the separation process.
Termination without notice may apply during the probationary period or for just causes such as serious misconduct or gross negligence, as per Philippine labor law, protecting employers from liability in cases of severe violations.
Severance, or “separation pay,” is calculated based on one month’s salary per year of service or half a month’s salary, depending on the reason for termination, to provide a fair exit package for departing employees.
FAQs
1. What is EOR in the Philippines?
An Employer of Record (EOR) in the Philippines enables businesses to hire local talent without establishing a local entity. The EOR manages payroll, tax contributions, mandatory benefits, and employment contracts, ensuring compliance with Philippine labor laws.
2. How long does it take to hire employees through Globaine's EOR in the Philippines?
With Globaine, hiring employees can be completed in as little as 24 to 48 hours, allowing you to quickly expand your workforce without delays.
3. What types of contracts are available for employees in the Philippines?
Employment contracts in the Philippines can be fixed-term, part-time, or regular contracts, all crafted to comply with local labor laws.
4. Are there any restrictions on dismissing employees in the Philippines?
Yes, dismissing employees in the Philippines must follow specific legal grounds, such as just cause or authorized causes, along with appropriate notice periods.
6. How does Employer of Record work in the Philippines?
An EOR in the Philippines acts as the legal employer for businesses, handling all HR and payroll operations. The EOR ensures compliance with local labor laws, including tax withholdings, social contributions, and employee benefits, making it easy for businesses to hire and manage employees.
