Employer of Record (EOR) in Philippines
Employer of Record (EOR) in Philippines provides a compliant way for companies to hire local professionals without establishing a legal entity. The Philippines has a workforce of over 45 million people, with strong expertise in IT, business process outsourcing (BPO), finance, and healthcare. The country is well-known for its English-speaking talent, cultural adaptability, and cost-effective labor market. However, employers face complex labor codes, mandatory benefits, and multiple statutory contributions. Partnering with an EOR in the Philippines helps businesses streamline payroll, contracts, compliance, and HR administration, ensuring efficient and lawful hiring across industries.
About Philippines
The Philippines, located in Southeast Asia, is an archipelago with a dynamic economy and one of the largest English-speaking workforces in the world. Over the last two decades, it has become a global hub for IT, business process outsourcing (BPO), customer support, and finance services. Major cities like Manila, Cebu, and Davao serve as leading centers for multinational companies.
The country’s labor force is young, skilled, and highly adaptable, making it attractive for roles in software development, digital marketing, accounting, healthcare, and creative industries. Wages are competitive compared to other Asian countries, which has contributed to the country’s rapid growth as an outsourcing destination.
At the same time, employment regulations are strict, requiring compliance with mandatory benefits such as the Social Security System (SSS), PhilHealth, and Pag-IBIG Fund. Employers must also provide 13th-month pay, paid leave, and severance benefits. Navigating these rules can be complex for foreign businesses. An Employer of Record (EOR) in the Philippines helps companies simplify hiring, manage payroll accurately, and ensure compliance with all labor laws while enabling faster entry into the local market.
Employment Terms and Regulations
Types of Contracts
Regular (Permanent) Contracts:
Standard employment with full benefits
Fixed-Term Contracts:
Project-based or time-bound roles
Probationary Contracts:
Up to 6 months before regularization
Project or Seasonal Contracts:
Industry-specific (e.g., construction, agriculture)
Working Hours
Standard: 8 hours per day, 40–48 hours per week
Overtime: Must be compensated at higher rates
Minimum Wage
Varies by region, approx. PHP 570/day in Metro Manila (2025)
Probation Period
Maximum of 6 months
Taxation and Contributions
Income tax:
Progressive, 0%–35% based on income brackets
Employee contributions:
SSS, PhilHealth, Pag-IBIG
Employer contributions:
Equivalent payments for SSS, PhilHealth, Pag-IBIG plus other mandatory benefits
EOR manages filings, deductions, and remittances
Types of Leave
Annual Leave:
Varies, generally 5 days after one year of service
Sick Leave:
Mandatory sick leave provisions for employees
Maternity Leave:
105 days (additional 15 days for solo mothers)
Paternity Leave:
7 days
Special Leave Benefits:
For women, up to 60 days under certain conditions
Public Holidays:
18 official holidays annually
Employee Benefits
- Mandatory 13th-month pay
- Social Security System (SSS) coverage
- PhilHealth healthcare benefits
- Pag-IBIG housing fund contributions
- Paid annual leave, maternity, and paternity leave
- Optional benefits: private health insurance, allowances, bonuses
Termination Process
- Must be based on just cause (misconduct, redundancy, etc.)
- Employer must provide notice and valid documentation
- Separation pay required for redundancy or retrenchment
- Termination procedures are strictly regulated to protect employees
Employer Taxes
- Employer contributions: SSS (~8.5% of salary), PhilHealth, Pag-IBIG (2%)
- Total employer costs typically 10%–12% of gross salary
- EOR ensures accurate and timely remittance
EMPLOYER TAXES
10%–12% (Estimated)
FAQ's
How STM Manages Employment in India
Establishing an entity in every hiring location can be cost-prohibitive. STM simplifies the process by employing and paying your Indian talent on your behalf. We handle the intricate HR procedures and employment contracts in compliance with local laws. You can conveniently approve invoices through our platform. By partnering with an Employer of Record (EOR), you can efficiently and compliantly hire top talent globally.
Payment Processes for Indian Employees
We streamline payroll management for your Indian workforce. Employee hours, leaves, holidays, bonuses, and commissions are meticulously calculated. STM invoices you around the 15th of each month in your preferred currency, including US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), or Singapore Dollars (SGD). This ensures your Indian employees receive their salaries promptly in Indian Rupees (INR). Simplify further by consolidating your global team’s salaries into a single payment.
Full-time Employees vs. Global Contractors
Contractors engage with multiple companies and are self-employed, while full-time employees focus solely on their employer and receive additional benefits like health insurance, equity, and time off. While hiring international contractors can be cost-effective, it comes with misclassification risks. Partnering with an EOR for contractor onboarding and payments ensures compliant and timely compensation.
Reliable Employee Support
Our platform offers accessible support for employees and employers with inquiries about benefits, visas, and global employment in India. Utilize the chat function to connect with our expert team. Additionally, every STM client is assigned a dedicated account manager, serving as the primary contact for global HR assistance.
