Philippines

In the Philippines, companies typically consider four hiring options. You can pay through your HQ for short-term arrangements, engage contractors for independent work, set up a local entity to hire directly, or use an Employer of Record. Each option comes with different compliance and operational requirements. An EOR is often used to employ workers without establishing a local company.

Generally, registering a company in the Philippines can take anywhere from a few days to a few weeks, depending on the complexity of the company structure and the completeness of the application.

However, the difficult part comes after the initial setup when payroll needs to be calculated and run every month, taxes filed, benefits extended, and changes in rules and regulations followed.

Contractors work well when the relationship is project-based and the person serves multiple clients. If an individual gives their full and undivided attention to your company in the Philippines, employment is the right structure under Philippine law, covering entitlements like service incentive leave, 13th-month pay, and SSS contributions. For project-based contractor engagements, Boundless’s Agent of Record (AOR) service handles classification, contracts, and payments compliantly in the Philippines.

HR compliance in the Philippines means your policies and procedures respect all applicable Philippine employment laws and regulations. When you hire in the Philippines, this matters both to safeguard employee rights and to reduce employer risk. Compliance covers labour law, sick leave, 5 days paid leave, region-set minimum wage, tax credits, and standard working hours. Following these is fundamental for running the business well.

As with every other country, there are certain costs associated with employing a worker in the Philippines that come on top of the gross salary you are offering.

An Employer of Record is the legal employer of the individual in the Philippines for government, tax, and employment purposes. It provides a locally compliant contract, runs payroll, files employment taxes, and manages statutory benefits such as 105 days of paid maternity leave and 13th-month pay. You remain responsible for sourcing workers, managing day-to-day work, and funding payroll each cycle.

Boundless as the Employer of Record files all pertinent taxes and social security contributions as they relate to the compliant employment of an individual in their home country.

Boundless partners with employment lawyers and advisers in each country we operate in, including the Philippines. They ensure employment contracts and onboarding documents comply with the local jurisdiction. We hold detailed discussions on specific norms such as payroll, social protection, data protection, notice periods, and work-from-home regulations. When a sensitive issue arises, our internal team engages the relevant firm promptly.

The company remains responsible and informs employees of the day-to-day management of the people and teams employed through Boundless, including any disciplinary or performance issues. Boundless ensures compliance with Philippine-specific procedures, practices, and labour laws while employing people and teams on behalf of the company.

Any new employee who is locally employed through an Employer of Record gets full employment rights and benefits as specified in Philippine employment law. They get a locally compliant employment contract, statutory parental leave, annual leave, illness benefits, any relevant tax credits, and many more.

Both employers and employees in the Philippines make social security contributions on top of salary. Employers contribute approximately 14.5% of gross salary, while employees contribute around 10.5%. Employees also pay progressive income tax of 0-35% depending on their income level. To get a clear overview of both employee and employer taxes, use the salary breakdown calculator.