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.

Compliant local employment
Clear contracts and predictable payroll
One partner for hiring and employment 
Transparent pricing starting from €390/month.

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Transparent monthly pricing.No setup fees

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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.

Philippines

What you need to know about hiring in Country

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:

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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)

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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

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Employer taxes & contributions

Employers contribute to social security, health insurance, and housing funds

Contributions are calculated based on salary brackets

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Leave & holidays

Public holidays are observed nationally and regionally

Service Incentive Leave applies after one year of service

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13th-month salary

A 13th-month salary is mandatory. Typically equivalent to 1/12 of annual base pay

Probation period

Probation commonly lasts up to six months

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Good to know

The Philippines has very specific statutory requirements, and missteps around payroll or benefits are common without local expertise.

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.

Probationary employment and regularisation - the rule most companies miss

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.

Night differential pay

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.

Why European companies hire in the Philippines

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:

misclassified contractors
unclear employment terms
inconsistent payroll and benefits
high attrition caused by poor setup

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.

In the Philippines:

Fronted is the legal employer on record (EOR)
You manage day-to-day work and performance
Employment is structured according to local law and norms

Our system includes:

Proper employment scoping
Local employment contracts
Payroll, taxes, and statutory benefits
Ongoing employment and HR support

Hiring & employment in the Philippines (what companies should know)

Employment in the Philippines is regulated and highly structured.

Employment contracts

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

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Employee protection

Labor law strongly favors employee protection
Improper termination carries legal risk
Documentation and process matter

FAQ

Frequently Asked Questions About Hiring In the Philippines

How quickly can we hire someone in the Philippines through Fronted?

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.

What are the mandatory employer contributions in the Philippines?

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.

Is the 13th-month pay mandatory?

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.

What does termination look like in the Philippines?

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.

What happens when we outgrow EOR and want to set up our own local entity in Philippines?

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.

Can we pay our Filipino employee in USD instead of PHP?

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.