Written and fact-checked by the EORquotes research team · Data verified July 2026
Hiring an employee in Philippines costs significantly more than their gross salary. This calculator itemizes every mandatory employer contribution so you can budget an offer accurately — before you talk to an EOR provider.
How much does it cost to hire an employee in Philippines? Employing someone in Philippines costs roughly 7.79% above their gross salary in mandatory employer contributions. A 70,000 PHP per month hire costs about 81,738 PHP per month all-in — 980,850 PHP per year across 13 salary payments.
Cost of hiring in Philippines: key facts (2026)
- Employer contributions add about 7.79% on top of gross salary at a typical wage — a 70,000 PHP/month hire costs roughly 81,738 PHP per month all-in.
- Salary is paid 13 times a year, not 12 — a mandatory extra that raises the annual cost.
- There is no single statutory minimum wage in Philippines; pay floors come from collective agreements or regional wage boards.
- Several contributions are capped or salary-dependent, so the effective rate falls as salary rises — the calculator handles this.
- Statutory paid leave is 5 days plus 18 public holidays, on a 48-hour week.
Hiring in Philippines in 2026: what to know
The Philippines is the anchor of the global outsourcing industry, and for good reason: a large, English-fluent workforce trained on Western business norms, strong customer-support and back-office talent, and salary levels far below North American or European equivalents. Time-zone overlap with the US is limited, so employers hiring for real-time collaboration usually plan around night-shift arrangements, which carry a statutory night-differential premium.
Employment protection is employee-friendly and enforced by the Department of Labor and Employment (DOLE). Regular employees enjoy security of tenure, dismissal must rest on a just or authorized cause with due process, and misclassifying a long-term worker as a contractor (‘endo’ arrangements) is actively penalised. Statutory paid leave is thin — five days of Service Incentive Leave — but the mandatory 13th-month pay and generous public-holiday calendar add real cost.
For 2026 the SSS contribution rate holds at 15% (10% employer) on a Monthly Salary Credit ceiling of 35,000 PHP, and PhilHealth continues its 5% premium up to a 100,000 PHP income ceiling. A widely reported bill (the proposed Fuel Crisis Immediate Relief and Response Act) would temporarily defer SSS, PhilHealth and Pag-IBIG contributions for two months — but as of mid-2026 it remains a legislative proposal, not law, so current rates apply in full.
This page focuses on what a hire costs. For the full employment picture — contract types, probation, benefits, termination — see our Philippines EOR country guide.
Calculate the true cost of an employee in Philippines
How this calculator works: contributions are computed on the annual gross salary
(13 payments per year), contributions with a statutory ceiling stop at that ceiling, rate ranges use the midpoint, and every rate is cited
in the sources at the bottom of this page.
What a hire in Philippines actually costs: worked examples
Example: a typical professional hire (70,000 PHP/month)
Employing a typical professional hire (70,000 PHP/month) in Philippines costs 980,850 PHP per year — an effective 81,738 PHP per calendar month, about 17% more than the monthly gross written in the contract.
| Annual gross (13 payments) | 910,000 PHP |
| Social Security System (SSS) (10.0%), capped at 35,000 PHP/month | 45,500 PHP |
| PhilHealth (2.5%), capped at 100,000 PHP/month | 22,750 PHP |
| Pag-IBIG (HDMF) (2.0%), capped at 10,000 PHP/month | 2,600 PHP |
| Total annual employer cost | 980,850 PHP |
| Effective monthly cost | 81,738 PHP |
Example: a senior hire (105,000 PHP/month)
Employing a senior hire (105,000 PHP/month) in Philippines costs 1,445,600 PHP per year — an effective 120,467 PHP per calendar month, about 15% more than the monthly gross written in the contract.
| Annual gross (13 payments) | 1,365,000 PHP |
| Social Security System (SSS) (10.0%), capped at 35,000 PHP/month | 45,500 PHP |
| PhilHealth (2.5%), capped at 100,000 PHP/month | 32,500 PHP |
| Pag-IBIG (HDMF) (2.0%), capped at 10,000 PHP/month | 2,600 PHP |
| Total annual employer cost | 1,445,600 PHP |
| Effective monthly cost | 120,467 PHP |
Where the money goes
At a typical 70,000 PHP/month salary, this is how the annual cost of employing someone in Philippines divides between take-home pay and the mandatory contributions on top:
- Annual gross (13 payments) — 910,000 PHP (92.8%)
- Social Security System (SSS) (10.0%), capped at 35,000 PHP/month — 45,500 PHP (4.6%)
- PhilHealth (2.5%), capped at 100,000 PHP/month — 22,750 PHP (2.3%)
- Pag-IBIG (HDMF) (2.0%), capped at 10,000 PHP/month — 2,600 PHP (0.3%)
Skip the paperwork. An EOR employs your Philippines hire through its own local entity — payroll, contributions, insurance and compliance handled for a flat monthly fee. Most teams are up and running in days:
What’s behind each employer cost in Philippines
Social Security System (SSS)
The SSS funds retirement, disability, sickness and maternity benefits. The 2026 contribution rate is 15% of the Monthly Salary Credit, split 10% employer and 5% employee. It is computed on a Monthly Salary Credit that tops out at 35,000 PHP, so the employer’s SSS cost caps at roughly 3,500 PHP per month no matter how high the salary.
PhilHealth
PhilHealth is the national health insurance programme, funded by a 5% premium split equally — 2.5% employer, 2.5% employee. In 2026 it applies on monthly income from a 10,000 PHP floor up to a 100,000 PHP ceiling, so the employer share tops out at 2,500 PHP per month.
Pag-IBIG (HDMF)
Pag-IBIG is the national housing and savings fund. Under HDMF Circular 460 the employer contributes 2% of monthly compensation, computed on a maximum base of 10,000 PHP — so the mandatory employer contribution caps at 200 PHP per month. A small Employees’ Compensation premium (about 10–30 PHP per month) is also paid on top.
Why Philippines pays 13 salaries a year
The Philippines mandates 13th-month pay — an extra month’s basic salary due by 24 December each year — so a full-year hire is paid 13 times, not 12. Statutory contributions are assessed on monthly salary; this calculator applies them across the annual base as a conservative estimate. In practice: a 2,000 PHP monthly salary in Philippines means 26,000 PHP in annual gross pay (13 × 2,000), and every employer contribution above is calculated on that annual figure — which is why the calculator works on an annual basis before showing you the effective monthly cost.
EOR vs opening your own entity in Philippines
Standing up a Philippine entity means SEC registration, then registrations with the BIR, SSS, PhilHealth, Pag-IBIG and the local government unit — a multi-month process with ongoing local bookkeeping and DOLE compliance. An EOR removes all of it: the provider’s Philippine entity employs your hire, runs the SSS/PhilHealth/Pag-IBIG filings and the mandatory 13th-month pay, and handles security-of-tenure rules correctly. For outsourced teams and first hires, an EOR is the standard route into the market. Providers such as Deel and Remote are the usual starting points — or compare quotes from several at once.
Key employment facts for Philippines
Beyond the payroll numbers, these statutory rules shape what a Philippines hire costs and how the relationship works day to day:
| Working hours | 48 hours/week |
| Paid annual leave | 5 days |
| Public holidays | 18 |
| Maximum probation | 6 months |
| Notice period | 30 days for resignation or authorized-cause termination (Labor Code) |
| Severance | Separation pay of one-half to one month’s pay per year of service for authorized-cause terminations; none for just-cause dismissal |
Hire in Philippines without an entity
We match you with vetted EOR providers for Philippines — free, in one request:
Get free Philippines EOR quotes →
Or go direct to a provider covering Philippines:
Frequently asked questions
How much does it cost to employ someone in Philippines?
On top of gross salary, employers in Philippines pay roughly 7.79% in mandatory contributions at a typical salary. Several of those contributions stop at a statutory wage ceiling, so the effective percentage falls as salary rises — which is why a flat percentage of gross overstates the cost of senior hires here. Use the calculator above for an itemized total at your exact salary level.
What payroll taxes do employers pay in Philippines?
Social Security System (SSS) (10.0%), capped at 35,000 PHP/month. PhilHealth (2.5%), capped at 100,000 PHP/month. Pag-IBIG (HDMF) (2.0%), capped at 10,000 PHP/month. The biggest single item is Social Security System (SSS) at 10.0% — see the plain-language breakdown of each contribution earlier on this page for what it funds and who pays what.
How many salary payments per year are required in Philippines?
13. The Philippines mandates 13th-month pay — an extra month’s basic salary due by 24 December each year — so a full-year hire is paid 13 times, not 12. Statutory contributions are assessed on monthly salary; this calculator applies them across the annual base as a conservative estimate. When budgeting, multiply the monthly salary by 13, not 12: a 2,000 PHP contract is 26,000 PHP a year in gross pay before any employer contributions.
What is the minimum wage in Philippines?
There is no statutory national minimum wage in Philippines. Pay floors are set through collective agreements negotiated per industry, so the applicable minimum depends on the agreement covering your hire’s role — one more reason to work with a provider that knows the local agreements well.
Can I hire in Philippines without opening a local company?
Yes — that is exactly what an Employer of Record does. The EOR already operates a legal entity in Philippines: it employs your hire on your behalf, runs compliant payroll including the full ~7.79% of employer contributions, and sends you one monthly invoice. You direct the day-to-day work; the EOR carries the legal employment relationship.
How fast can I hire in Philippines through an EOR?
Typically days rather than months. The slow parts of employing in Philippines — entity setup, social-security and tax registrations, mandatory insurances — already exist on the EOR’s side. In practice your timeline is usually the candidate’s own notice period with their current employer (notice periods in Philippines run 30 days for resignation or authorized-cause termination (Labor Code)).
What does an EOR service cost in Philippines?
Providers charge a flat monthly fee per employee on top of the statutory employment costs shown in the calculator above — the statutory costs are the same whoever you pick, but the fee is not. The same Philippines hire can be priced very differently across providers, which is why comparing several quotes at once pays for itself.
What is the notice period and probation limit in Philippines?
Probation runs up to 6 months, and statutory notice is 30 days for resignation or authorized-cause termination (Labor Code). Getting these right in the contract from day one matters — an EOR applies the correct local terms automatically, which is where compliance risk usually hides.
How is severance calculated in Philippines?
Separation pay of one-half to one month’s pay per year of service for authorized-cause terminations; none for just-cause dismissal. Because severance exposure grows with tenure, it is worth understanding before you make an offer — the calculator above covers ongoing cost, while severance is a separate end-of-employment liability.
How many paid leave days are mandatory in Philippines?
Employees are entitled to 5 days of paid annual leave plus 18 public holidays, on a 48-hour working week. Paid leave is part of the true cost of a hire even though it does not show as a payroll contribution.
Is Philippines a cost-effective place to hire compared with neighbours?
It depends on the role, but the honest comparison is total employer cost, not gross salary — the effective on-cost here is about 7.79%. Use the calculator for your exact salary, then compare against nearby markets from the country index linked below before you commit to a location.
Compare Philippines with other markets
Employer costs swing widely between countries — the same salary can cost far more or less depending on where you hire. See the full employee-cost calculator index for every country, or jump to a neighbour:
Compare EOR providers for Philippines
Knowing the cost is half the decision — the other half is which provider handles your Philippines hires best. These head-to-heads weigh entity model, strengths and pricing approach specifically for Philippines:
- Deel or Multiplier for a Philippines hire?
- Philippines: Multiplier vs Playroll compared
- Deel vs Remote for hiring in Philippines
- compare Remote and Oyster in Philippines
More Philippines resources
Costs are only part of the picture. Our Philippines EOR country guide covers contract types, benefits, termination rules and compliance for Philippines in depth — the questions that come up after the budget is approved.
Sources
Every number on this page traces to an official or authoritative source, checked on the date shown. Spot something outdated? Tell us and we will verify and correct it.
- SSS 2026: 15% of Monthly Salary Credit (10% employer, 5% employee), MSC ceiling 35,000 PHP: Social Security System (SSS) (accessed 2026-07)
- PhilHealth 2026: 5% premium (2.5% employer), income ceiling 100,000 PHP: PhilHealth (accessed 2026-07)
- Pag-IBIG 2026: employer 2%, maximum compensation base 10,000 PHP (HDMF Circular 460): Pag-IBIG Fund (HDMF) (accessed 2026-07)
- Service Incentive Leave (5 days), 13th-month pay, notice and separation-pay rules: Department of Labor and Employment (DOLE) (accessed 2026-07)
- Typical professional monthly salary reference (~70,000 PHP) used for worked examples: Editorial estimate for a mid-level professional hire; verify per role (PSA wage statistics) (accessed 2026-07)