The Philippines is an important destination for companies building international teams. Its workforce includes professionals working across customer support, technology, finance, operations, marketing, healthcare, and many other fields.
For an international company, however, hiring an employee in the Philippines involves more than finding a qualified candidate.
Employers need to understand local employment rules, regional minimum wages, payroll, social security contributions, statutory benefits, 13th-month pay, leave, working hours, and the available employment structures.
This guide explains how to hire employees in the Philippines in 2026 and what international companies should consider before making their first hire.
Last updated: September 2026
Disclaimer: This article provides general information and is not legal, tax, or employment advice. Philippine employment rules can change, and companies should verify current requirements with qualified local legal, tax, payroll, HR, or employment professionals before hiring.
Can a Foreign Company Hire Employees in the Philippines?
Yes.
However, an international company needs to choose an appropriate employment structure and comply with Philippine employment requirements.
One option is to establish a local entity and hire employees directly.
Another option is to use an Employer of Record (EOR).
An EOR can employ workers locally while the international company manages the employee's day-to-day work. Depending on the arrangement, the EOR can manage local employment administration such as payroll, benefits, and other employment-related requirements.
For a company making its first hire in the Philippines, understanding these options before recruiting can make the process much easier.
3 Ways to Hire in the Philippines
1. Hire Through Your Own Philippine Entity
A company with an established Philippine entity can hire employees directly.
This means the company is responsible for its local employment operations, including areas such as:
- Employment contracts
- Payroll
- Government registrations
- Social security contributions
- Statutory benefits
- Employee records
- Tax and payroll compliance
- HR administration
For companies planning a significant and long-term presence in the Philippines, having their own entity may form part of their broader expansion strategy.
However, establishing and maintaining a local operation also creates additional administrative responsibilities.
2. Use an Employer of Record
An Employer of Record can provide another way for an international company to hire employees in the Philippines.
Instead of immediately establishing its own local entity, the company can use an EOR to employ the worker locally while the company manages the employee's work.
An EOR can help with areas such as:
- Local employment contracts
- Payroll
- Benefits
- Government-related employment administration
- Employee onboarding
- Local compliance processes
For example, Deel currently offers an EOR solution for hiring employees in the Philippines and states that its platform can manage payroll, benefits, tax documentation, and related employment administration.
Affiliate disclosure: Some links on this page may be affiliate links. If you choose to use a service through my link, I may earn a commission at no additional cost to you.
Explore Deel for hiring in the Philippines
3. Hire Independent Contractors
Some international companies consider using independent contractors when entering the Philippine market.
This can be appropriate for a genuine independent business relationship, but companies should not assume that calling someone a "contractor" automatically determines their legal status.
The actual working relationship matters.
If a worker operates like a regular employee, companies should obtain appropriate local advice before deciding that a contractor structure is suitable.
Minimum Wage in the Philippines in 2026
One of the most important things international employers need to understand is that the Philippines does not have one single national minimum wage for private-sector employees.
Minimum wage rates are determined by region through regional wage orders.
For example, the National Wages and Productivity Commission currently lists the following rates for the National Capital Region (NCR): ₱718 to ₱755 per day, depending on the applicable wage category.
The NWPC also lists Wage Order No. NCR-27, with implementation subject to court proceedings noted on its official website.
Other regions have different rates. For example, the official NWPC information currently shows:
- Region VI: ₱520–₱550 per day
- Region VII: ₱500–₱540 per day
- Region VIII: ₱440–₱470 per day from June 2026
- Region IX: ₱451–₱464 per day from June 2026
- Region X: ₱485–₱500 per day from May 2026
- BARMM: ₱401–₱436 per day, with a further increase scheduled for December 2026
These figures demonstrate why employers should check the wage order applicable to the employee's actual location instead of using a single nationwide number.
For professional positions, the statutory minimum wage should also not be confused with the market salary for the role. A software developer, accountant, customer support specialist, or sales manager may have a salary far above the applicable statutory minimum.
Why Location Matters When Hiring in the Philippines
For international companies hiring remotely, the employee's location can affect the applicable wage requirements.
A company might have headquarters in the United States with an employee in Manila, Philippines. Another employee might work from Cebu, Philippines.
The employer should not automatically assume that the same minimum wage rules apply to both employees. The applicable regional wage order should be checked based on the relevant employment circumstances.
This is one reason why international payroll requires local knowledge rather than simply converting a US or European salary into Philippine pesos.
13th-Month Pay in the Philippines
One of the most important benefits international companies need to understand is 13th-month pay.
Under Philippine rules, covered rank-and-file employees are generally entitled to 13th-month pay.
The minimum amount is based on one-twelfth of the employee's total basic salary earned during the calendar year. Employees who worked for less than a full year receive the corresponding proportionate amount.
The Department of Labor and Employment states that the benefit must be paid not later than December 24 each year.
Example: Suppose an employee earns ₱60,000 per month and receives the same basic salary throughout a full calendar year. A simplified calculation would be: ₱60,000 × 12 = ₱720,000, then ₱720,000 ÷ 12 = ₱60,000.
The employee's minimum 13th-month pay in this simplified example would therefore be ₱60,000, assuming the full amount represents basic salary for purposes of the calculation. Actual payroll calculations can be affected by the employee's circumstances and applicable rules.
Working Hours and Overtime
Working hours are another important consideration when hiring employees in the Philippines.
For many employees, the normal working period is based on an 8-hour workday.
Overtime work generally requires additional compensation rather than simply being treated as part of the normal salary.
Deel's current Philippines hiring guide describes standard working hours as 8 hours per day and provides examples of overtime compensation requirements.
Companies hiring remote employees should therefore define: normal working hours, time zone, breaks, overtime approval, weekend work, holiday work, and communication expectations.
This becomes particularly important when the employer and employee are located in different countries. For example, a US company may want a Filipino employee to work US business hours. The company should consider the local working-time requirements rather than simply copying the schedule used by employees in the United States.
Service Incentive Leave
The Philippine Labor Code provides for five days of service incentive leave with pay for employees who have rendered at least one year of service, subject to the applicable statutory exceptions.
The leave may be used for sick leave, vacation, or other purposes under the applicable rules.
Companies may also provide more generous leave policies than the statutory minimum.
When preparing an employment offer, employers should therefore distinguish between statutory minimum benefits and additional company benefits. This makes the compensation package clearer for both the employer and employee.
Social Security and Payroll Contributions
Employers in the Philippines also need to account for mandatory social protection and payroll contributions.
The Social Security System (SSS) states that employers must register, report employees, deduct the employee share where applicable, and remit contributions together with the employer share and Employees' Compensation contribution.
The current SSS contribution information states that the Social Security contribution rate is 15% of the applicable Monthly Salary Credit, with 10% paid by the employer and 5% by the employee, subject to the applicable contribution ceiling and rules.
Companies should also consider other statutory programs and payroll obligations applicable to Philippine employees, including:
- SSS
- PhilHealth
- Pag-IBIG
- Employees' Compensation
- Income tax withholding
- Other applicable statutory obligations
Because contribution schedules and rules can change, companies should use current government tables or a qualified payroll provider when calculating actual employment costs.
What Benefits Should Employers Consider?
A professional employment package in the Philippines may include both statutory and additional company benefits. Depending on the role and company, these can include:
- Social Security
- Health coverage
- Retirement-related contributions
- Paid leave
- 13th-month pay
- Life insurance
- Private health insurance
- Performance bonuses
- Equipment allowances
- Remote-work benefits
Deel's current Philippines EOR page lists benefits and programs including social security, public health insurance, pension-related benefits, and optional private healthcare options.
The exact package should be determined according to the employee's role, local requirements, and company policy.
What Should Be Included in a Philippine Employment Contract?
Before an employee starts working, the employment documentation should clearly define the main terms of the relationship. Depending on the employment arrangement, important information can include:
- Employer information
- Employee information
- Job title
- Responsibilities
- Salary
- Payment schedule
- Working hours
- Work location
- Benefits
- Leave
- Overtime arrangements
- Confidentiality
- Company policies
- Termination provisions
- Other applicable employment terms
International companies should avoid simply translating an employment contract from another country. A contract should be reviewed for the Philippine employment environment and the specific employment arrangement.
How to Hire an Employee in the Philippines: Step-by-Step
Step 1: Define the Position — Before looking for candidates, define job title, responsibilities, required skills, seniority, location, working hours, salary range, and benefits. A clear job description makes the recruitment process easier and helps candidates understand what the company expects.
Step 2: Decide Where the Employee Will Work — This is especially important in the Philippines because minimum wage rates are regional. Determine where the employee will actually work — do not assume that Manila and another Philippine region have the same wage requirements. Check the applicable regional wage order before finalizing the offer.
Step 3: Choose the Employment Structure — Decide whether the company will use its own Philippine entity, use an EOR, or use a genuine independent contractor arrangement. This decision should be made before the employee starts working.
Step 4: Calculate the Total Employment Cost — Do not look only at the employee's monthly salary. Your calculation should consider: Salary + statutory employer costs + benefits + leave + 13th-month pay + payroll administration. For example, an international company offering a ₱60,000 monthly salary should not assume that its total annual cost is simply ₱60,000 × 12. The company also needs to consider statutory benefits and employer contributions.
Step 5: Prepare the Employment Contract Make sure the employment documentation reflects the agreed terms and applicable Philippine requirements.
Step 6: Set Up Payroll — Payroll should be ready before the first salary payment. The employer needs a process for salary, tax withholding, SSS, PhilHealth, Pag-IBIG, leave, 13th-month pay, and other applicable deductions and contributions.
Step 7: Onboard the Employee — A good onboarding process should explain company policies, job responsibilities, working schedule, payroll, benefits, leave, communication tools, security requirements, and manager/team structure.
Step 8: Maintain Compliance — Hiring is only the beginning. The company needs an ongoing process for payroll, employee records, leave, benefits, contributions, and changes to employment rules.
When Does an EOR Make Sense in the Philippines?
An EOR can be one option for companies that want to hire employees in the Philippines without immediately establishing their own local employment infrastructure. It may be considered when:
- You are making your first Philippine hire
- You do not have a local entity
- You want to test the market
- You want to expand gradually
- You need local payroll administration
- You want help managing local employment requirements
Deel currently states that its Philippines EOR service can allow companies to hire without setting up their own local entity and manage areas such as payroll, benefits, and tax documentation.
Explore Deel's Philippines EOR solution
EOR vs. Local Entity in the Philippines
| Consideration | EOR | Own Philippine Entity |
|---|---|---|
| Own local entity required | Generally no | Yes |
| Payroll administration | Provider-managed | Company-managed |
| Local employment administration | EOR-managed according to arrangement | Company responsibility |
| Initial setup | Generally simpler | More administrative work |
| Direct local employer | EOR | Company |
| Suitable for initial market testing | Can be considered | Depends on business plans |
| Long-term local operation | Depends on strategy | Can support a permanent operation |
The appropriate structure depends on the company's circumstances, hiring plans, budget, and legal requirements.
How Much Does It Cost to Hire an Employee in the Philippines?
There is no single answer because total employment cost depends on the employee's salary, location, benefits, statutory contributions, and employment structure.
A company should consider base salary, employer statutory contributions, 13th-month pay, benefits, payroll and HR administration, and EOR fees (if applicable).
Deel currently publishes an estimated employer-cost figure for the Philippines and a management fee starting at $599 per month on its Philippines hiring page. These are provider-specific estimates, not universal Philippine employment costs.
Companies should request a current quote based on the employee's actual salary and circumstances before budgeting.
Common Mistakes When Hiring in the Philippines
Mistake 1: Using One National Minimum Wage — The Philippines has regional wage rates. Always check the applicable region.
Mistake 2: Forgetting 13th-Month Pay — An international company unfamiliar with Philippine employment practices may budget only 12 monthly salaries. The 13th-month pay obligation should be included in the annual employment budget where applicable.
Mistake 3: Looking Only at Salary — Salary is only part of the cost of employment. Employer contributions and statutory benefits also matter.
Mistake 4: Copying a Foreign Employment Contract — A contract designed for another country may not reflect Philippine requirements.
Mistake 5: Treating Contractors Like Employees — Companies should carefully assess whether a contractor arrangement genuinely reflects the relationship.
Mistake 6: Ignoring the Employee's Location — For Philippine hiring, location can affect the applicable minimum wage.
Philippines Hiring Checklist
Recruitment: Job description prepared, salary range established, employee location confirmed, working hours defined.
Employment Structure: Own entity or EOR? Contractor arrangement reviewed if applicable. Employment structure confirmed before hiring.
Payroll: Salary calculated, employer contributions calculated, SSS considered, PhilHealth considered, Pag-IBIG considered, tax withholding considered, 13th-month pay included in budget.
Compliance: Regional minimum wage checked, employment contract prepared, working hours reviewed, leave requirements reviewed, statutory benefits reviewed.
Onboarding: Payroll information collected, company policies provided, equipment arranged, employee access created, manager and team introduced.
Frequently Asked Questions
Can a US company hire an employee in the Philippines?
Yes. A foreign company can employ workers in the Philippines, but it needs an appropriate employment structure and must comply with applicable Philippine employment requirements. Depending on the company's circumstances, it may establish its own local entity or consider an EOR.
An EOR can provide a structure for a foreign company to employ workers in the Philippines without establishing its own local entity. The exact arrangement should be confirmed with the EOR and appropriate local advisers.
No. Minimum wage rates are determined regionally, so the applicable rate depends on the relevant region and wage order.
13th-month pay is a statutory monetary benefit for covered rank-and-file employees. The minimum amount is generally based on one-twelfth of total basic salary earned during the calendar year, subject to the applicable rules.
DOLE states that covered employers must pay 13th-month pay not later than December 24 each year.
The Labor Code provides a five-day yearly Service Incentive Leave with pay after at least one year of service, subject to statutory exceptions. Companies may provide more generous leave policies.
Yes. Covered employers have responsibilities for registering employees, deducting the employee share where applicable, and remitting contributions together with the employer share and Employees' Compensation contribution.
No. A recruitment agency helps a company find candidates. An EOR provides an employment structure in which the EOR can serve as the local employer and manage specified employment administration. A company can potentially use a recruitment agency to find a candidate and an EOR to employ that candidate.
Can I hire someone in the Philippines without opening a local company?
Is there one minimum wage for the entire Philippines?
What is 13th-month pay in the Philippines?
When must 13th-month pay be paid?
How much annual leave do employees receive?
Does the employer have to contribute to SSS?
Is an EOR the same as a recruitment agency?
Final Thoughts: Hiring in the Philippines Requires Local Knowledge
Hiring in the Philippines can be a straightforward process when the company understands the local employment framework before making an offer.
The key areas to consider include regional minimum wages, employment contracts, payroll, SSS and other statutory programs, 13th-month pay, leave, working hours, employee benefits, and employment structure.
For companies with an established Philippine operation, direct employment through their own entity may fit their business model.
For companies making their first hire without a local entity, an EOR can be another structure to evaluate.
The important point is to understand the employment model before hiring rather than trying to solve payroll and compliance issues after the employee has already started.
Planning to hire in the Philippines? Start with the employment structure, not just the job post.
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