Employer of Record in the Philippines - Hire Without a Local Entity
Hire and employ talent in the Philippines without setting up a local entity. Fronted helps companies employ people compliantly in the Philippines - with clear contracts, reliable payroll, and local employment expertise.
The Philippines is a fundamentally different market from Fronted's Nordic pages - and it should look that way. This is not a high-cost, high-compliance complexity market. It is a cost-efficient, English-speaking talent market with strong technical and professional depth. The compliance framework is distinct and specific. The page should be structured around those two realities.
What you need to know about hiring in Philippines
Employer statutory contributions in the Philippines run approximately 10% of gross salary, significantly lower than any European market. Three separate contributions are mandatory and each has its own ceiling, registration requirement, and remittance schedule:
SSS (Social Security System): Covers disability, maternity, retirement, and death benefits. Employer contribution rate is approximately 9.5% on monthly salary credit, capped at PHP 1,900 per month (2025 rates).
PhilHealth: Government health insurance. Employer contributes approximately 2.5% of basic salary, with a monthly salary floor and ceiling applied. Both employer and employee contribute equally.
Pag-IBIG (HDMF): Housing fund. Employer contributes PHP 100 per month per employee for salaries up to PHP 1,500, and 2% for higher salaries, capped at PHP 200/month employer share.
All three agencies have separate registration requirements, separate remittance schedules, and separate employer penalties for non-compliance. Fronted registers with and remits to all three as part of standard Philippines EOR.
Currency
Philippine Peso (PHP)
Payroll frequency
Monthly or bi-monthly are both common
Working hours
Standard working time is 8 hours per day, 6 days per week
Overtime is regulated and compensated at a premium
Employer taxes & contributions
Employers contribute to social security, health insurance, and housing funds
Contributions are calculated based on salary brackets
Leave & holidays
Public holidays are observed nationally and regionally
Service Incentive Leave applies after one year of service
13th-month salary
A 13th-month salary is mandatory. Typically equivalent to 1/12 of annual base pay
Probation commonly lasts up to six months
13th month pay - mandatory, not a bonus
The 13th month pay in the Philippines is not a discretionary bonus. It is a legal obligation under Presidential Decree 851, payable to all rank-and-file employees who have worked for at least one month during the calendar year. It must be paid no later than December 24 each year. The amount is calculated as one-twelfth of the employee's total basic salary earned during the calendar year. International companies that budget for Philippines headcount without accounting for 13th month pay consistently underbudget. Fronted factors this into all Philippines employment cost modelling from the first hire.
Philippine labor law caps probationary employment at six months. If an employee is not terminated or formally confirmed as a regular employee before the six-month period ends, they are automatically deemed a regular employee by operation of law — with full security of tenure. This is one of the most consequential rules for international companies managing Philippines EOR relationships. A hire that was intended to be trial-basis becomes a permanent employee if the probation period is not actively managed. Fronted tracks probation end dates and prompts clients before the deadline with a clear decision point.
Philippine labor law requires a 10% premium on top of hourly rate for all work performed between 10:00 PM and 6:00 AM. For European companies running Filipino teams on European-aligned hours, some or all working hours may fall within the night differential window. This is not optional and applies to remote employees.
Fronted accounts for night differential in payroll calculation for all Philippines employees whose working hours overlap with the 10PM–6AM window.
The Philippines offers a combination that is rare globally: high English proficiency (the Philippines ranks among the top 5 non-native English speaking countries), strong professional skills across technology, finance, operations, and customer success, significant time zone overlap with European afternoon hours when Filipino teams work standard business hours, and a cost base that is a fraction of European equivalents.
For Nordic and UK companies building distributed teams, the Philippines is an increasingly common component - not as a replacement for local Nordic talent, but as a way to extend team capacity in functions where English fluency and professional skills matter more than physical proximity.
The real challenge with hiring in the Philippines
The Philippines is often seen as “easy” to hire in. That assumption creates problems. Companies frequently struggle with:
Compliance is essential — but employment quality is what determines success
How Fronted supports hiring in the Philippines
Fronted operates as a Global Talent Operating System, combining recruitment and employment into one coordinated setup. Contact us to discuss your hiring needs.
Hiring & employment in the Philippines (what companies should know)
Employment in the Philippines is regulated and highly structured.
Employment contracts
Permanent employment is standardProbation periods are regulatedTermination must follow legal procedures
- Permanent employment is standard
- Probation periods are regulated
- Termination must follow legal procedures
Payroll & taxation
- Semi-monthly or monthly payroll is common
- Statutory deductions are mandatory
- Timely and accurate payments are critical
Benefits & protections
- Mandatory government benefits apply
- Health, social security, and housing funds are required
- Benefits strongly influence retention
Employee protection
- Labor law strongly favors employee protection
- Improper termination carries legal risk
- Documentation and process matter
Frequently Asked Questions About Hiring In the Philippines
FAQ
Typically 3–5 business days from signed offer to start date. We register the employee and prepare a DOLE-compliant employment contract. The Philippines has no work permit requirement for local hires, which is why it's one of the faster markets to staff up in.
Four statutory contributions apply: SSS (employer share up to roughly ₱1,900/month at the top bracket), PhilHealth (currently 5% split equally between employer and employee, capped at a ceiling salary), Pag-IBIG / HDMF housing fund (₱100/month employer share at standard rates) and EC (Employees' Compensation, ₱30/month employer-paid). Total employer burden is usually 10–12% on top of gross, depending on salary band.
Yes - it's required and must be paid on or before December 24 each year. It equals 1/12 of total basic salary earned during the calendar year. We accrue it monthly in our cost projections so you're never surprised in Q4.
The Philippines is one of the more employee-protective jurisdictions in Asia. Termination requires either a just cause (serious misconduct, fraud, etc.) or "authorized cause" (redundancy, retrenchment, closure) under the Labor Code, plus due process - typically a "two-notice rule" and a hearing for just-cause cases. Authorized-cause separations require 30 days' notice to both the employee and DOLE, plus separation pay (usually one month or half a month per year of service). We will support you through the whole process and documentation.
When you’re ready to establish your own presence in Philippines, we handle the full transition - entity setup, employee transfers, and ongoing payroll and accounting support. And if you’re building across multiple markets, everything stays under one roof: one vendor, one platform, multiple entities. You never have to start from scratch or manage a patchwork of local providers.
We can quote in local currency.
Fronted ensures employment is set up correctly and maintained over time.
How it Works?
Scope the role and employment setup
Fronted employs the individual locally in the Philippines
Ongoing payroll, compliance, and reporting handled by us
One predictable monthly invoice
Hiring elsewhere?
These are just a few of the countries we operate in. Fronted operates as an Employer of Record in countries
across Europe, Asia, US, Latam and beyond.
NorwayHigh Compliance Fast onboardingSwedenStrong Labor ProtectionFinlandStrong compliance Secure hiringDenmarkFlexible hiring modelPhilippinesCost - efficient talent
We operate in 40+ countries. Tell us where your next hire is - we’ll handle the rest.
Norway
Sweden
Finland
Denmark
Philippines
Talk to us about Hiring in Philippines
Book a call