Article
12 min read
How to Hire Using an Employer of Record in the Philippines (2025)
Employer of record

Author
Jemima Owen-Jones
Last Update
June 27, 2025

Table of Contents
What is a Philippines Employer of Record?
Top reasons to use an Employer of Record in the Philippines
How to hire in the Philippines: Step-by-step guide
Employment compliance tasks an Employer of Record manages in the Philippines
How much does an Employer of Record in the Philippines cost?
Which Philippines Employer of Record should you choose?
Is Deel Employer of Record a strong choice for hiring in the Philippines?
Hire employees in the Philippines confidently with Deel Employer of Record
Key takeaways
- Setting up an entity in the Philippines to hire local talent can take several months and cost over ₱2,283,860 in initial legal, tax, and payroll setup fees
- A Philippines Employer of Record lets you engage talent through its local entity, bypassing setup delays, legal costs, and compliance headaches
- Deel EOR owns its Philippines entity for full control, supports hiring in 150+ countries, delivers transparent pricing, real-time compliance monitoring, and has top G2 ratings
Hiring employees in the Philippines opens doors to new markets and cost-effective talent in 2025. However, setting up a local entity involves complex registration, navigating labor laws in the Philippines, and managing payroll taxes and social security system (SSS) contributions. This process can take months and expose you to legal risks.
An Employer of Record (EOR) in the Philippines simplifies this by handling entity setup, payroll, statutory benefits, and compliance. Deel EOR's wholly-owned local entity, transparent pricing, and global reach enable you to hire employees in the Philippines quickly and compliantly—without the pain of setting up a legal entity.
See also: What’s the Fastest Way to Enter Markets and Hire Globally?
What is a Philippines Employer of Record?
An Employer of Record legally employs your staff in the Philippines while you control daily operations. The EOR assumes responsibility for payroll taxes, social security system (SSS), PhilHealth, Pag-IBIG contributions, and local labor law compliance. This arrangement shields you from the complexities of entity setup and compliance risks.
Deel EOR's wholly-owned Philippine entity ensures direct legal ownership and compliance with labor laws in the Philippines. By partnering with an EOR like Deel, you offload statutory obligations like 13th-month pay and social security system contributions to the experts.
Deel Employer of Record
Top reasons to use an Employer of Record in the Philippines
Working with an EOR lets you hire employees in the Philippines without building local infrastructure or navigating complex local entity setup.
- Skip lengthy entity setup: Setting up a legal entity in the Philippines can take 3–4 months and incur significant legal and registration fees
- Transfer compliance liability: The EOR manages SSS, PhilHealth, Pag-IBIG filings, 13th-month pay, and payroll taxes, reducing your risk
- Reduce misclassification risk: Proper employee classification avoids penalties under labor laws in the Philippines
- Manage probation smoothly: EORs enforce probation periods up to six months, ensuring compliance with local working hours and employment rules
- Control costs with transparent pricing: Deel EOR offers flat, predictable fees covering all compliance and payroll services—no hidden charges
- Leverage global scale: Deel EOR spans 150+ countries, making it easy to manage global employment and payroll from one place
I realized I had to internationalize my team. Hiring people outside Europe was a real pain—a nightmare because of regulations. I wanted to scale the business quickly, but the global hiring process without an EOR wasn’t scalable at all. I can now get access to top talent without asking them to relocate, and without my company necessarily being an enterprise. I’ve been able to hire in London, Bulgaria, the United States, and more…
—Rachel Delacour,
CEO and Co-Founder of Sweep
How to hire in the Philippines: Step-by-step guide
Use this 8-step checklist to onboard employees compliantly and swiftly with an Employer of Record.
1. Choose an EOR with a wholly-owned Philippines entity
Select an EOR that operates its own Philippine local entity to avoid intermediaries and ensure full legal compliance. Deel EOR's wholly-owned entity means you bypass the hassle of setting up a branch or subsidiary or absorbing the costs from third-party services.
2. Book a demo and verify social proof
Schedule a demo to explore the EOR’s compliance dashboards, local contract generation, and onboarding workflows. Ask for client references who hire employees in the Philippines. Review case studies of companies hiring in the Philippines.
Deel’s high user satisfaction and positive reviews on G2 and Trustpilot reflect real performance.
3. Request a transparent EOR quote
Provide headcount, salaries, and locations to receive a detailed cost breakdown including social security system (SSS), PhilHealth, Pag-IBIG contributions, 13th-month pay, and flat fees. Deel EOR's transparent pricing model ensures no surprises.
Tip: Compare costs before you expand—read our article EOR vs. Entity Costs: What’s More Affordable?
4. Submit a 12–24-month hiring plan
Share your hiring forecast to optimize benefit enrollments and cash flow. Deel’s AI-driven workforce planning software helps you adjust plans in real time, enhancing cost-effectiveness.
Tip: Update your plan quarterly as hires occur.
5. Create the employment contract on the platform
Use the EOR’s contract generator to draft Philippine-compliant agreements covering probation, benefits, and IP protection. Deel EOR's platform auto-fills statutory rates for SSS, PhilHealth, and Pag-IBIG.
6. Confirm the candidate’s right to work
Upload work permits, visas, or citizenship documents securely. Deel verifies and stores these under the Data Privacy Act, ensuring compliance with local data protection laws.
Tip: Deel Immigration can help secure visas and permits.
7. Run the onboarding workflow
Complete digital forms, tax declarations, and benefits enrollment. The EOR enrolls employees in SSS, PhilHealth, and Pag-IBIG on your behalf.
Tip: Use Deel Engage to roll out training and performance goals, and Deel IT to provision equipment.
8. Maintain ongoing compliance
Monitor payroll, tax filings, and benefit contributions through real-time dashboards. Deel’s Compliance Hub alerts keep you ahead of deadlines and regulatory changes, avoiding costly fines.
Platform Tour
Employment compliance tasks an Employer of Record manages in the Philippines
Hiring in the Philippines means meeting strict statutory and operational requirements. An EOR like Deel ensures full compliance by managing all mandatory employer obligations, reducing risk, and overhead.
Category | Key Requirements (2025) |
---|---|
Statutory employer costs | Employers must contribute ~12.5% of wages to statutory programs monthly: SSS (~10%, based on MSC up to PHP 35,000), PhilHealth (2.5%, capped at PHP 2,500), and Pag-IBIG (PHP 200 fixed). A 13th Month Pay (equal to 1 month's base salary) must be paid by December, prorated if employed less than 12 months. |
Employment contracts & probation rules | Written contracts are not legally required but are strongly recommended. Probation may last up to 6 months. During this time, employers can terminate for poor performance with notice and supporting documents. After probation, termination requires a due process: a written notice with 5 days for employee response, a hearing, and a final termination notice. Non-compete and non-solicitation clauses are enforceable during and after employment, with no legal limits on duration or penalties. Market standard includes a 1-year restriction and a 3-month salary penalty. |
Pay and working hours | Minimum wage in the National Capital Region (NCR) is PHP 645/day (PHP 14,029/month) from July 17, 2024. No national minimum wage—rates vary by region. Standard hours are 8/day, 40/week, Monday–Friday. Overtime is mandatory and paid at 125–200% depending on day type; night work (10pm–6am) earns a 10% night differential. Employers must report all overtime and night hours to ensure accurate payroll. Rest periods include 1 hour per day and 1 day off per week. |
Payroll compliance | Payroll is semi-monthly (1st–15th, 16th–end). Salaries include base pay + benefits/bonuses. Deductions cover SSS (5%), MPF/WISP, Pag-IBIG (PHP 200), and PhilHealth (2.5%), with caps. The 13th Month Pay is mandatory, paid in full or prorated by Dec 15. Overtime, night pay, and holiday pay must be applied in the second payroll cycle. Taxable income is salary minus statutory deductions. Contribution payments are due monthly (PHIC/HDMF: 10th, SSS: 30th). |
Vacation and public holiday allowances | Employees accrue 5 vacation days/year, at 0.41 days/month from start date. Full and part-time employees are eligible. Unused days are paid out up to 5 days in February of the following year; excess is forfeited. Upon termination, all unused days are paid. The Philippines observes 12 national public holidays and 8 special non-working holidays. Work on holidays must be compensated: 200% pay on regular holidays, 130% on special holidays. No lieu day if a holiday falls on a weekend. |
Income taxes | The Philippines uses a progressive tax system. Employers must withhold income tax under a Pay-As-You-Earn (PAYE) model and remit to the Bureau of Internal Revenue (BIR) by the 10th of the following month. The tax year runs from Jan 1–Dec 31. Employees earning PHP 250,000 or less annually are exempt. Rates range from 0% to 35%, depending on income. Employers must provide employees with BIR Form 2316 by Jan 31. Self-employed individuals earning under PHP 3M can opt for a flat 8% tax. Annual tax returns are not mandatory unless the employee has additional income sources. |
Expenses, allowances, and bonuses | Expenses must have a clear business purpose and proper documentation (tax invoice/receipt with required details). Reimbursements within applicable limits are non-taxable. Approved expenses must be submitted before payroll cut-off to be processed in the same cycle. Allowances (e.g. WFH, relocation, gym) are taxable and discretionary. They must be processed manually and are not grossed-up. Bonuses (contractual/discretionary, including commissions and incentives) are tax-free up to PHP 90,000/year, including the 13th month salary. Any amount above the cap is taxable. Bonuses are taxed upon payment, with reconciliation at year-end via the employee’s tax return. |
Statutory benefits & pension requirements | Employees receive statutory benefits including social security (SSS), unemployment, workplace injury insurance, maternity, disability, sickness benefits, public healthcare through PhilHealth, and housing loans via the Home Development Mutual Fund (Pag-IBIG). Employer contributions are around 10% for social security and fixed monthly amounts for housing and healthcare funds, with employees contributing proportionally. Employers may also offer optional benefits such as private health insurance from various providers, private life insurance, business travel and kidnap insurance, and fertility services. Optional benefits must be offered equally to all employees if provided, except for travel insurance, which can be offered selectively. |
Maternity, paternity, parental, adoption & foster leave | Maternity Leave: 105 paid days (extendable by 30 days unpaid); +15 paid days for solo mothers; 60 paid days for miscarriage/emergency termination. Funded by employer (reimbursed by Social Security), up to PHP 70,000. Optional 7-day leave allocation to partner. Must notify employer early and submit medical documentation. Paternity Leave: 7 calendar days for married male employees cohabiting with the mother; funded by employer; must apply within a reasonable time of expected delivery. Covers first 4 deliveries. No social security reimbursement. Solo Parental Leave: 7 working days/year. Funded by employer. Available to solo parents with at least 6 months of service and a valid Solo Parent ID. VAWC Leave: Up to 10 paid days for victims of violence against women and children, extendable if needed per court/barangay order. Requires official certification. |
Sick leave, bereavement leave, and carer’s leave | Sick Leave: No statutory entitlement. Employees typically use paid vacation days or unpaid leave. Special arrangements for sick leave outside these categories must be agreed in advance. A doctor’s note is not required. SSS Sickness Benefit: Employees may claim sickness benefits through the Social Security System (SSS) after exhausting all paid leave. The benefit covers lost income during medically certified absences. Bereavement and Carer’s Leave: No statutory leave entitlements. Any time off is subject to employer discretion or internal policy. |
Terminations and resignations | Notice: Minimum 30 days’ notice required by law. Payment in lieu is permitted but not customary. Garden leave is legally allowed but uncommon in practice. Severance: Employees with less than 1 year of service are entitled to 1 month’s salary. For employees with more than 1 year, the entitlement is 1 month per year of service. It’s standard practice to offer an additional month’s pay in exchange for a full waiver of claims. Final Pay: Employers must settle accrued unused vacation, pro-rated 13th month pay, and continue benefits during the notice period. Process: Terminations require at least 30 days for compliant processing unless due to gross misconduct. Misconduct-related terminations must follow a formal, multi-step disciplinary process that includes written warnings and allows the employee to respond. Risk: Litigation risk is high. Most terminations include a negotiated settlement to avoid future legal action. |
Health & safety | Employees are required to complete an annual Health & Safety (H&S) training. They must complete this training as part of their onboarding process. |
Misclassification risk | Risk Level: High. The Philippines has strict enforcement against contractor misclassification. Courts and labor authorities take a pro-employee stance and frequently rule in favor of workers who dispute their status. Consequences: Misclassified workers are entitled to retroactive employee benefits including social security, leave entitlements, 13th month pay, and severance. Employers may also face back payments, penalties, and reputational damage. Employer Guidance: Avoid contractor arrangements that involve fixed schedules, long-term engagement, or integration into daily operations. When in doubt, classify the worker as an employee. |
Data protection & IP protection | Governing Law: The Data Privacy Act of 2012 (Republic Act No. 10173) governs personal data handling in the Philippines. It applies to both local and foreign entities processing the personal data of Philippine citizens or residents. Employer Guidance: Ensure compliant data policies, employee consent forms, and breach response procedures are in place. Consult local counsel if processing sensitive or biometric data. |
Continuous Compliance™
How much does an Employer of Record in the Philippines cost?
Hiring in the Philippines includes gross salary plus employer contributions to SSS, PhilHealth, Pag-IBIG, 13th-month pay, and the EOR fee. Deel EOR's transparent flat monthly fee covers all compliance, payroll, and HR admin.
Here’s a breakdown of the costs you’ll face when opening your own entity in the Philippines compared to hiring through Deel’s EOR:
Factor | Your own Philippine entity | Deel EOR |
---|---|---|
One-off costs | ₱2,283,860 up-front | ₱0 |
Annual, recurring running costs | ₱2,506,399 | ₱0 |
Deel Employer of Record service fee | N/A | ₱408,480 per employee |
Estimated total annual costs | ₱4,790,259 | ₱408,480 |
Time to first hire | 3-4 months | 1 business day(s) |
Check our Employee Cost Calculator to see the full cost of hiring talent in the Philippines, including salary, taxes, pensions, and statutory fees.
Global Hiring Toolkit
Which Philippines Employer of Record should you choose?
Choose an EOR with a wholly-owned Philippine entity for direct legal control and compliance. Look for proven expertise in managing payroll taxes, social security system filings, and labor laws in the Philippines.
Select a partner offering a unified global platform for payroll, benefits, compliance monitoring, and mobility support. Deel EOR spans 150+ countries, providing seamless global employment management.
See also: Owned Entity vs. In-Country Partner: The Best Choice for Global Hiring
Discover how Outfittery used Deel to hire in 7+ countries
Outfittery, a leading online personal shopping service based in Germany, faced budget challenges when hiring tech talent domestically.
The organization transitioned to Deel EOR to streamline its global hiring process, reducing costs by 50% and onboarding times by 80%.
"Deel's platform is very innovative and easy to use. It simplified our hiring process and reduced the onboarding time from a week to just one day." – Pascal Erlach, Senior Talent Acquisition Manager at Outfittery
Is Deel Employer of Record a strong choice for hiring in the Philippines?
Absolutely. Deel EOR combines a wholly-owned local entity with transparent pricing and expert compliance management, removing the burden of setting up a legal entity and navigating complex labor laws in the Philippines.
With Deel, you get access to:
- Fast onboarding—hire employees in days across 150+ countries
- A wholly-owned Philippine entity that guarantees direct compliance and reduces intermediary risks and costs
- Compliance with all statutory laws and employer costs: SSS, PhilHealth, Pag-IBIG, 13th-month pay
- Streamlined monthly payroll, tax withholding, and BIR filings
- Reduced misclassification risks and penalties
- Transparent, flat pricing with no hidden fees
- Strong data privacy and IP protections
- Workforce planning and reporting tools
- Essential team collaboration, engagement, and performance tools
Deel’s Employer of Record service lets you hire Philippine talent confidently and cost-effectively.
See also: More Than a Service: EOR as a Strategic Partner in Business Growth
Hire employees in the Philippines confidently with Deel Employer of Record
Deel EOR's wholly-owned entity removes the pain of setting up a legal entity, accelerating your time-to-hire.
Our transparent pricing model delivers clear, all-in-one cost estimates covering statutory contributions, payroll taxes, and benefits.
Ready to hire in the Philippines with ease and confidence? Book your Deel demo now and experience the fastest, most transparent Employer of Record service available.
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FAQs
How fast can I onboard employees in the Philippines using Deel?
Typically, within days, since Deel handles compliant hiring on your behalf. No entity set up required.
Do employees need a local bank account?
Yes, payroll is paid into local bank accounts, which Deel helps facilitate.
What type of employment contract is used?
Philippine-compliant contracts with probation periods up to six months before regularization.
How are taxes and social contributions handled?
Deel withholds and remits income tax monthly and manages SSS, PhilHealth, and Pag-IBIG contributions.
When are payroll deadlines?
Payroll is processed monthly, aligned with Bureau of Internal Revenue deadlines.
What benefits are included?
Mandatory benefits such as 13th-month pay, maternity/paternity leave, and service incentive leave are fully managed.
Is there a probation period?
Yes, probation can last up to six months, after which employees are regularized.
Can I hire remotely without setting up a local entity?
Yes, Deel’s wholly-owned Philippine entity lets you hire compliantly without entity setup.
How does Deel ensure compliance with data privacy?
Deel complies with the Data Privacy Act and secures employee data with robust protections.
What if I want to expand beyond the Philippines?
Deel operates in 150+ countries, providing a unified global hiring platform.

About the author
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.