Before welcoming your first Filipino hire, you must familiarize yourself with the country's employment laws. This includes the benefits your company is legally required to provide, which range from mandatory Social Security contributions to paid leave to the 13th-month salary.
However, offering employees the bare minimum might not be enough to cut it when it comes to attracting top talent in the Philippines. Companies seeking to be viewed as an employer of choice typically go above and beyond by offering a mix of optional employee benefits and perks on top of mandatory benefits.
Key takeaways:
- Employers must provide employees with specific statutory benefits and leave entitlements in the Philippines.
- It's critical to classify workers correctly. Otherwise, businesses might face legal and financial penalties.
- Many companies opt to offer additional benefits to stay competitive when competing for top Filipino talent.
Who is Entitled to Benefits in the Philippines?
The Philippine Labor Code, overseen by the Department of Labor and Employment (DOLE), requires employers to contribute to or provide essential benefits such as Social Security, health insurance, holiday pay, retirement, paid leave, and more to full-time, permanent employees.
Do Independent Contractors Receive Benefits in the Philippines?
Independent contractors are not entitled to any statutory benefits. Benefits and compensation for contractors are governed strictly by their contracts.
Correctly classifying employees is critical. That's because if you misclassify an employee as a contractor and fail to pay mandatory benefits, you'll face legal penalties and potentially owe back pay, taxes, and unpaid benefits.
Mandatory Statutory Benefits in the Philippines
Minimum Wage and Overtime Pay
The minimum wage in the Philippines varies by region and worker type and is regularly adjusted to keep pace with the cost of living.
For example, as of January 2025, the National Capital Region (NCR) has a minimum wage of 645 Philippine Pesos (PHP) per day for non-agricultural workers.
Under the Labor Code of the Philippines, the standard work day is a maximum of eight hours, plus a one-hour lunch break. Employees who work over eight hours are entitled to overtime pay at a rate of 25% above their average hourly wage. Employees who work six consecutive days are entitled to a 24-hour break.
Employers must pay Filipino employees a night shift differential of at least 10% more than their regular hourly rate if they work any hours between 10 p.m. and 6 a.m.
13th-Month Salary
Non-management Filipino workers are entitled to an extra annual payment known as a 13th-month salary, which employers must pay by Christmas Eve.
Some employees choose to receive this benefit in two installments — one in May and the second in December.
DOLE requires all employers to file a compliance report by January 15 to confirm they've paid the 13th-month salary to eligible workers.
Social Security Contributions
The Social Security System (SSS) is a state-run social insurance program in the Philippines. It includes Social Security and the Employees' Compensation Program (ECP).
Both employers and workers contribute a percentage of the employee's monthly salary to SSS, with employers taking on a larger contribution rate percentage.
Benefits include:
- Paid maternity leave
- Sickness and disability benefits
- Retirement pensions
- Death and funeral grants
- Life insurance
- Work-related injury compensation
Pension
Regulated under the SSS, Filipino employees are eligible to receive retirement benefits starting at age 60, as long as they are no longer working.
There are two types of retirement benefits:
- Monthly pensions: A lifetime monthly payment to workers who've made at least 120 monthly SSS contributions before retirement.
- Lump sum benefits: Workers who haven't paid the required 120 monthly contributions can choose a one-time cash benefit (equal to the total contributions the worker or their employer paid, including interest).
Health Insurance
The Philippine Health Insurance Corporation, PhilHealth, grants all full-time Filipino workers access to free healthcare.
PhilHealth coverage includes:
- Inpatient and outpatient services
- Subsidized hospitalization
- Diagnostic lab tests
- Z benefits (for serious illnesses, like cancer treatments)
- Maternity benefits
PhilHealth premiums are split equally between employers and employees, amounting to about 5% of an employee's base salary, with a cap of PHP 100,000.
Employers must make these payments on time; failure to do so may result in non-compliance penalties and a 3% monthly compounding interest charge.
Dive deeper into health insurance in the Philippines.
Unemployment Insurance
Unemployment insurance is available under the SSS. Filipino workers receive a one-time payment if they are "involuntarily separated" from work, but this insurance does not extend to workers terminated over misconduct.
Workers' Compensation Insurance
Employers must make monthly contributions to the Employees' Compensation Program (ECP), a government program providing compensation packages in case of work-related sickness, injury, or death.
Home Development Mutual Fund (HDMF)
The government-run Home Development Mutual Fund (HDMF), also known as the Pag-IBIG Fund, offers employees affordable housing loans and other financial assistance.
Workers pay 1% of their salary to the Pag-IBIG Fund up to a specified income level. Once they exceed the minimum income threshold, their contributions increase to 2%.
In addition, employers contribute 2% of their employees' salary to the Fund.
Leave Entitlements in the Philippines
Service Incentive Leave
The Service Incentive Leave (SIL), funded by employers, offers Filipino workers five days of paid annual leave per year, which can be used for sick days, vacation, or if the employee is hospitalized.
While SIL is the minimum paid leave employees are entitled to, many employers offer additional leave above and beyond the legally mandated five days.
Holiday Leave
Holidays in the Philippines are classified as either regular holidays or special (non-working) holidays.
Regular holidays are public paid holidays. If an employee is required by their employer to work on a regular holiday, they receive double their standard pay.
Special (non-working) holidays are days employees are not required to work, but it's up to their employer if that day is paid. Employees who are required to work on a special holiday are entitled to 130% of their standard pay.
Depending on the region, there are approximately 12 designated regular holidays and six special non-working days.
Maternity and Paternity Leave
New mothers receive 105 days of paid maternity leave, and single mothers or solo parents receive an additional seven days.
Women who experience miscarriages or an emergency termination of pregnancy (ETP) receive 60 days of paid leave.
Male employees are entitled to seven days of paid paternity leave, but only if they are legally married to the mother of their child.
Employers pay for maternity and paternity leave and are reimbursed by the SSS.
Bereavement Leave
Offering employees bereavement leave is not mandatory in the Philippines, but many companies offer up to three days (or longer) to support employees through the grieving process.
The proposed Bereavement Act of 2022 sought to change this by requiring companies to offer 10 days of paid leave to all Filipino workers in the private and public sectors. However, as of April 2025, the Act has not passed.
Supplemental Benefits Frequently Offered in the Philippines
As attracting and retaining top talent remains challenging, many companies opt to sweeten their employee benefits packages with additional benefits.
Popular supplemental benefits include:
Additional Paid Leave
Many companies offer Filipino employees extra vacation or personal leave days on top of the five-day statutory SIL minimum
A growing number of businesses also provide flexible leave arrangements to show employees appreciation and give them greater control over their days off.
Monetary Bonuses
Some companies reward employees' hard work and dedication with a mid-year bonus, typically equaling one-month’s salary.
This bonus is offered in addition to the mandatory 13-month salary payment.
Private Health Insurance
Although PhilHealth covers all Filipino workers, many employers offer Health Management Organizations (HMO) or private health insurance programs to supplement gaps in PhilHealth, such as non-emergency surgeries or dental and vision coverage.
Group Life Insurance
Group life insurance is another popular benefit offered to Filipino workers.
This is typically a shared cost between employees and employers and covers work-related accidents, life-threatening illnesses, hospitalization, death, and disabilities.
Compliantly Employ Workers in the Philippines with RemoFirst
If you're employing Filipino workers, you're legally required to provide a range of statutory benefits and leave entitlements to protect worker welfare and quality of life.
RemoFirst makes compliance simple. As an Employer of Record (EOR), we help businesses employ, onboard, and pay employees in the Philippines (and 185+ other countries).
We manage all mandatory benefits (like SSS, PhilHealth, Pag-IBIG contributions, and 13th-month pay) on your behalf, so you never have to worry about missteps or missed deadlines.
Schedule a demo to see how easy RemoFirst makes it to hire and manage employees in the Philippines.
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