How to Hire Staff in Philippines


How to Hire Staff in Philippines With Embark

Our staff are experts in fields ranging from operations, payroll, accounting, and more. Learn what you need to expand your business and hire staff in Philippines.

Introducing Philippines

Philippines, island country of Southeast Asia in the western Pacific Ocean. It is an archipelago consisting of more than 7,000 islands. The Philippines has a mixed economic system that includes a variety of private freedom, combined with centralized economic planning and government regulation.

Capital City - Manila

Currency - Philippine peso (₱, PHP)

Languages Spoken - There are some 120 to 187 languages spoken

Population Size - 111 Million (2021)

Time Zone - GMT +08:00

GDP - USD 394 Brillion (2021)

Employee Classification

Employees can be majorly divided into two categories –  Contractors and Employees and defining relation with the employee is very important to avoid risks associated with misclassification.

The courts in India have applied the control and integration test to determine whether a person can be classified as an employee or independent contractor. The prima facie test is the control test to determine whether an employer-employee relationship exists and it is not merely to direct the nature of work that has to be carried out but also to control the manner in which it is done.

Another difference between an employer and contractors is an employer is required to withhold tax at the time of payment of salary to employees. The salary paid to an employee may include benefits and allowances that the employee is entitled to, which is beneficial to the employee from a tax perspective. However, with respect to independent contractors, the employer must withhold the applicable taxes; however, the amount paid may not be in the form of salary, but as professional fees for services performed. In both these cases, the employee and independent contractor/s will be required to file their income tax returns as prescribed under law.

Hiring Structure in Philippines

Payroll Cycle

The payroll cycle in the Philippines is generally made at least once every two weeks or twice a month at intervals not exceeding 16 days.

Public Holidays



January 1st

New Year’s Day

February 25th

People’s Power Day

July 27th

Iglesia Ni Cristo Day

November 1st

All Saints’ Day

November 2nd

All Souls’ Day

December 24th

Christmas Eve

December 25th


December 31st

New Year’s Eve




February 1st

Chinese New Years Festival

April 9th

Day of honor

April 14th

Maundy Thursday

April 15th

Good Friday

April 17th

Easter Sunday

May 2nd

Labor Day

June 13th

Independence Day

August 22nd

Benigno Aquino Day

August 29th

National Hero Memorial Day

November 30th

Bonifacio Day

December 30th

Rizal Day

Benefits & Health Insurance

Employees are entitled to monetary benefits such as the minimum wage, 13th month pay, and overtime pay, among many others. In addition, the Labor Code also requires employers to become members of the Pag-IBIG Fund, PhilHealth, and SSS, as well as remit monthly contributions on behalf of their employees to these government offices. This ensures that employees have access to affordable house financing, health insurance, and social security benefits, as mandated by the law.

Personal Income Tax

Individual – Taxes on personal income


The Philippines taxes its resident citizens on their worldwide income. Non-resident citizens and individuals, whether or not resident in the Philippines, are taxed only on income from sources within the Philippines.


Rates of tax on income of individuals, resident or not, depend on the nature of their income (i.e. compensation income, income subject to final tax, or other income).


Compensation tax rates


For resident individuals and non-resident individuals doing business and receiving compensation income, the tax rates are as follows:

Beginning 1st January 2023:


Taxable income (PHP)

Tax on column 1 (PHP)

Tax on excess (%)

Over 0 to 250,000 


Over 250,000 to 400,000


Over 400,000 to 800,000



Over 800,000 to 2,000,000



Over 2,000,000 to 8,000,000



Over 8,000,000



Employment Termination

An employer shall observe procedural due process before terminating one’s employment.

A. In a termination for just cause, due process involves the two-notice rule:

a) A notice of intent to dismiss specifying the ground for termination, and giving said employee reasonable opportunity within which to explain his or her side;

b) A hearing or conference where the employee is given opportunity to respond to the charge, present evidence or rebut the evidence presented against him or her;

c) A notice of dismissal indicating that upon due consideration of all the circumstances, grounds have been established to justify termination.

B. In a termination for an authorized cause, due process means a written notice of dismissal to the employee specifying the grounds at least 30 days before the date of termination. A copy of the notice shall also be furnished the Regional Office of the Department of Labor and Employment (DOLE) where the employer is located.


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