Article
4 min read
Employer Costs for an Employee in the Philippines (2026 Guide)
Employer of record
Global hiring
Author
Jemima Owen-Jones
Last Update
February 05, 2026
Quick answer: What is the total employer cost for a $100,000 salary in the Philippines?
For an employee earning $100,000 USD annually in the Philippines, employers can expect mandatory employer costs of approximately $101,153 USD per year, bringing total compensation costs to $201,153 USD.
Estimated total employer cost (Philippines): ~101.2% on top of gross salary (example estimate).
Hiring in the Philippines can be a great way to access skilled talent—whether you’re expanding into the market, building a remote team, or hiring your ideal candidate locally.
But even when two employees earn the same salary, the total employer cost varies by country due to statutory contributions, healthcare requirements, and mandatory payroll benefits.
This guide provides a ballpark estimate of the mandatory employer cost of hiring an employee in the Philippines, using an example salary of $100,000 USD per year.
What’s included in this estimate?
This estimate includes mandatory employer-side statutory costs that may apply when hiring an employee in the Philippines, such as:
- Social Security System (SSS) contributions
- HDMF (Pag-IBIG) contributions
- PhilHealth contributions
- 13th month salary
What’s not included in this estimate?
This estimate generally does not include additional costs such as:
- Paid annual leave (vacation)
- Sick pay
- Private health insurance beyond PhilHealth
- Employer-provided benefits or allowances
- Bonuses, equity, or commissions
- Equipment and onboarding expenses
- Costs that vary by role, industry, or employee structure
Why employer costs vary in the Philippines (and globally)
Employer costs can differ depending on:
- Contribution caps and salary thresholds
- Whether additional allowances or bonuses apply
- Employee classification and contract type
- Changes in regulation year to year
- Currency exchange rate fluctuations (if you pay in a different base currency)
Estimated employer cost breakdown for the Philippines
Below is an estimated breakdown of mandatory employer costs for hiring an employee in the Philippines earning $100,000 USD/year.
Example salary used in this estimate
- Annual gross salary: $100,000 USD
- Annual gross salary (approx.): ₱5,807,700 PHP
Employer mandatory costs (estimated)
| Employer Cost Category | Estimated Annual Cost (PHP) | Estimated Annual Cost (USD) | Notes |
|---|---|---|---|
| Social Security System (SSS) | ₱34,560 | $595 | Retirement, disability, and death benefits |
| HDMF (Pag-IBIG) | ₱2,400 | $41 | Housing development fund contribution |
| PhilHealth | ₱30,000 | $517 | National health insurance contribution |
| 13th salary | ₱100,000 | $100,000 | Mandatory 13th month salary payment |
| Total Estimated Employer Costs | ₱166,960 | $101,153 | Total mandatory employer cost estimate |
Total compensation cost (salary + mandatory employer costs)
| Total | PHP | USD |
|---|---|---|
| Gross Salary | ₱5,807,700 | $100,000 |
| Mandatory Employer Costs | ₱166,960 | $101,153 |
| Total Compensation Cost | ₱5,974,660 | $201,153 |
Global Hiring Toolkit
Hire in the Philippines (and 150+ other countries) with Deel
Hiring internationally introduces a new layer of complexity—local labor laws, payroll rules, statutory benefits, and compliance requirements can add up fast.
Deel helps you hire employees in the Philippines and across 150+ countries while handling:
- Local payroll and tax compliance
- Statutory contributions and reporting
- Country-specific benefits administration
- Contracts and onboarding support
- Ongoing compliance as regulations change
With Deel, you can scale your global hiring strategy faster—without building local entities or juggling multiple vendors. Book a demo to learn more.
FAQs
Why is hiring in the Philippines considered cost effective for global employers?
Many global employers find hiring in the Philippines cost effective due to a strong talent pool and competitive salary expectations compared to some other markets. However, employers should still budget for mandatory contributions and local compliance requirements that increase total cost beyond base pay.
What employer contributions are required in the Philippines?
Mandatory employer contributions in the Philippines typically include statutory payments to:
- SSS (Social Security System)
- PhilHealth
- Pag-IBIG (HDMF)
Employers may also need to account for mandatory 13th month pay depending on the employee’s compensation structure.
What should employment contracts include in the Philippines?
Compliant employment contracts in the Philippines typically define monthly salary, job responsibilities, working hours, probation terms, leave entitlements, termination terms, and compensation components like allowances or performance bonuses. Clear contracts help reduce disputes and support compliance with Philippine labor laws.
How do compensation structures affect total employer cost in the Philippines?
Different compensation structures (for example, base salary plus allowances or performance bonuses) can change the total annual employer cost. Employers should also plan for 13th month pay and ensure bonuses are documented clearly in the contract and payroll setup.
Is minimum wage relevant when hiring in the Philippines?
Yes. The Philippines has a statutory minimum wage that varies by region. As of 2025, the daily minimum wage in Metro Manila (NCR) is ₱610 per day. Employers must meet the applicable regional minimum wage based on the employee’s location and role. Minimum wage compliance is a core requirement under Philippine labor laws and directly affects lawful hiring and payroll setup.
How does payroll processing work in the Philippines?
Payroll processing in the Philippines typically includes calculating salary, applying statutory employer contributions, withholding applicable employee deductions, and issuing compliant payslips. Employers also need to ensure correct reporting and remittance timelines.
What is the Bureau of Internal Revenue (BIR) and why does it matter for employers?
The Bureau of Internal Revenue (BIR) is the Philippines’ tax authority. Employers must comply with BIR requirements for payroll withholding, reporting, and remittance—making tax compliance a critical part of compliant payroll operations.
Can an Employer of Record (EOR) help global employers hire in the Philippines?
Yes. An Employer of Record (EOR) can hire employees on your behalf in the Philippines and manage compliant employment contracts, payroll processing, statutory contributions, and required reporting—while your company directs the employee’s day-to-day work.
How do night shift and time zone needs affect employer costs in the Philippines?
Many roles in the Philippines support international time zone coverage, including night shift schedules for US or EU working hours. Night shift work can affect compensation planning depending on shift differentials, premium pay rules, and employer policy.
Is the Philippines a good option for long term hiring?
Yes. Many employers use the Philippines for long term team growth, especially for customer support, operations, and technical roles. For long-term hiring, employers should plan for statutory contributions, 13th month pay, benefits strategy, and consistent compliance with Philippine labor laws.
Do account managers and other client-facing roles have different cost considerations?
Yes. For roles like account managers, total cost can vary based on compensation plans, commission structures, and performance bonuses. Employers should clearly define variable pay terms to avoid payroll disputes and ensure consistent reporting.
Jemima is a nomadic writer, journalist, and digital marketer with a decade of experience crafting compelling B2B content for a global audience. She is a strong advocate for equal opportunities and is dedicated to shaping the future of work. At Deel, she specializes in thought-leadership content covering global mobility, cross-border compliance, and workplace culture topics.
