Managing employees and payroll in the Philippines brings opportunities and obstacles, with unique tax and payroll regulations that can cause issues with compliance if not managed properly.
The corporate tax rate liability in the Philippines is determined on the residency status and net income in during the business year. New companies need to register with the Social Security System, the Philippine Health Insurance Corporation, and the Bureau of Internal Revenue to get started.
Labor and Payroll considerations in the Philippines:
- The currency is the Philippine Peso, with 52.39 PHP = $1 USD
- Payroll tax is withheld from employees by the employer
- Minimum wage varies by industry and region
- Regular workers are protected by unionization, while managers and higher-level employees are not protected by unions but can form groups or associations for workplace assistance
- Employers hiring foreign nationals must us the Alien Employment Permit (AEP) and prove that a local person cannot be hired for the same role
- Common working visa is the 9(g), which requires the AEP application process
- In accordance with the labor laws of the Philippines, employees are entitled to twelve (12) days for the first two years of service, and additional one day every year starting on the 3rd year. Maximum total sick leave is 15 days. All unused leave are convertible to cash at the end of the year
If you are looking to expand in the Philippines, or improve operations there, Blue Marble can help. Our easy-to-use payroll technology allows you to simplify the payroll process and view payroll in real-time with customized reporting. Our US-based service team and in-country experts can help when questions come up and ensure compliance with local regulations. Talk to us about simplifying your payroll in the Philippines – click here to get started