Recruitment Guide for the Philippines
This guide aims to ensure that the company goes through the correct recruitment process, ensuring that all applicants and hired applicants will be evaluated properly. This guide will serve as a how-to guide for the recruitment procedure in the Philippines.
Things to Know before Hiring in the Philippines
Most professional professions require contracts because at-will employment does not exist in the Philippines, except for brief probationary periods. Though these agreements can be oral or written, it’s essential to draft a firm written contract in Filipino that includes items like these:
Employers may need to know the rules and ensure that their policies conform with them in the Philippines because the requirements for terminating an employee are pretty extensive.
A six-month probationary period is allowed under Philippine legislation. If the employer and employee decide the partnership isn’t working out during this time, they can easily split ways.
If they have a good reason, employers in the Philippines may remove an employee without severance after the probationary period. Managers must, however, conduct a formal inquiry and submit compelling evidence of the reason for termination to prove the cause. The following are examples of the grounds for firing an employee:
When a corporation fires an employee for a good reason, it must provide the employee with at least 30 days’ notice. It may select one of the following notice options:
4. Paid Time off
There are some classifications for Employees paid time off in the Philippines such as paid vacation, paid holidays, maternity leave ,and more. Let’s dive in to understanding more about it:
Employees are entitled to five paid vacation days each year. This period, referred to as service incentive leave, includes vacation and sick days. However, most firms give professional employees 15 paid vacation days per year.
Philippines Employees are entitled to various paid holidays. There are two sorts of holidays in the Philippines:
SSS Paid Maternity Leave
If they have made the requisite contributions to the SSS fund, pregnant employees in the Philippines may get paid maternity leave for their first four pregnancies.
Married fathers may additionally receive up to seven paid days of leave for each of their first four children if they live in the same household.
5. Payroll and Tax
According to Philippine law, every employer must deduct and withhold taxes from their employees’ pay. As a result, the employer acts as the withholding agent and collects personal income tax from the employee through payroll.
Individual citizens and resident aliens earning purely compensation income, as well as individuals engaged in business and the practice of the profession, are subject to the graduated income tax rates outlined in Section 24(A)(2) of the Tax Code of 1997, as amended by Republic Act No. 10963, or the Train Law, which became effective on January 1, 2018.
|Amount of Taxable Income (PHP)||Rate|
|Up to 250,000||0%|
|Over 250,000 up to 400,000||20% of the excess over P250,000|
|Over 400,000 up to 800,000||P30,000 + 25% of the excess over P400,000|
|Over 800,000 up to 2,000,000||P130,000 + 30% of the excess over P800.000|
|Over 2,000,000 up to 8,000,000||P490,000 + 32% of the excess over P2,000.000|
|Over 8,000,000||P2,410,000 + 35% of the excess over P8,000.000|
Withholding taxes must be paid according to the following schedule:
|Type of Payment||Payment due to date|
|Manual Payment||On or before 10th of the following month|
|Online Payment||On or before 15th of the following month|
Social Security System
SSS is a privatized social insurance program designed to protect members and their families against the financial and economic consequences of disability, sickness, maternity, old age, death, and other unforeseen events.
This initiative requires all private employees and companies to participate. Employee and employer Social Security premiums will differ depending on the employee’s monthly wage band. Employers must deduct Social Security contributions from employees’ salaries and remit them to the SSS or any certified bank and the employer’s portion of contributions.
Employers are required to:
6. Law & Restrictions
In the Philippines, companies are prohibited from discriminating against employees belonging to various protected classes. As well as from discriminating against job candidates or employees based on the following characteristics:
Employers frequently avoid asking questions regarding these topics during recruiting interviews to prevent even the appearance of discrimination.
7. Cost of Hiring
Employee hiring costs in the Philippines vary by business and industry. Your company will need to consider both indirect and direct hiring costs when it adds new personnel, including the following:
Hiring Practices for Initial Recruitment
Locate and source qualified people for your company. Following that, you can interview each prospect to select the best candidates.
The fees depend on the job platform you will use when looking for a qualified candidate.
ChallengesIf you need individuals with a specific set of abilities, it will either slow down the hiring process or raise the cost of hiring people.
Hiring Remote Employees
The distance between countries may force you to interview and hire individuals remotely as you analyze possible personnel for your operations in the Philippines. Here are a few pointers to help the procedure go smoothly:
Prepare ahead of time: Remote interviews may require more organization and planning than in-person interviews. Make sure you understand how to use the technology platform you’re using, and select ahead of time who will handle which questions to make the most of the time you have with your applicants.
Be flexible: If a candidate is late for an in-person interview, you could wonder about their reliability. However, despite a candidate’s best efforts, technological issues can arise. Avoid connecting the candidate’s nomination with any internet outages or platform concerns, and instead, focus on their strengths and role appropriateness.
Use Social Media: If you cannot meet applicants in person at career fairs or university recruiting events in the Philippines, you may often use social media to your advantage. Facebook and LinkedIn are also popular in the country, and many employers find success on GitHub and industry-specific sites. Because many Filipino prospects use their phones for job searches and applications, you should make sure your company’s website is mobile-friendly.
Average Salary of a Filipino Remote Employee
While the average daily minimum wage in the Philippines ranges from PHP 290 (USD 5.70) to PHP 537 (USD 10.61), the average compensation will vary depending on the employee’s region.
Here’s a rough estimate of the average annual income for different jobs:
|Job Title||Average Salary Range (PHP)||Average Salary Range (USD)|
|Accounting Manager||83,333 – 166,666||1,735 – 3,470|
|Web/Mobile App Developer||108,333 – 250,000||2,275 – 5,250|
|Data Scientist||125,000 – 208,333||2,625 – 4,375|
|Test Analyst||83,333 – 158,333||1,750 – 3,325|
|Project Manager||166,667 – 333,333||3,500 – 7,000|
|Sales Manager||108,333 – 425,000||2,275 – 8,925|
But first, let’s put the typical pay data in context. Based on their monthly income, the Philippine Institute for Development divides families into various income groups:
|Income Group||Range of Monthly Family Incomes for a family of 5 (PHP)||Range of Monthly Family Incomes for a family of 5 (USD)||Number of Households||Number of Persons|
|Poor||Less than 11,690 per month||Less than 243 per month||2.9m||17.7m|
|Low Income||Between 11,690-23,381 per month||Between 243-487 per month||8.4m||40.7m|
|Lower Middle Income||Between 11,690-46,761 per month||Between 487-973 per month||7.6m||31m|
|Middle Middle Class||Between 46,761-81,832 per month||Between 973-1,703 per month||3.1m||11.2m|
|Upper Middle Class||Between 81,832-140,284 per month||Between 1,703-2,919 per month||1.2m||3.8m|
|Upper Income||Between 140,284-233,806 per month||Between 2,919-4,865 per month||358k||1m|
|Rich||At least 233,807||At least 4,865||143k||360k|
Working Hours In The PhilippinesEmployees in the Philippines often work an average of 8 hours each day, five days per week. Filipinos are also obligated to take at least one hour of rest each day. If you ask your employee to work overtime, you will be charged an additional 25% of their hourly pay rate. Overtime has no maximum hours and is entirely of your choice.
Required Benefits by Law
13th Month PayThis pay is a statutory payment in the Philippines, equal to 1/12 of an employee’s yearly income. Salary is often prorated if the person is not a full-time employee. This is usually paid on or before December 24, together with the first December salary check, usually on December 15.
Annual/Sick LeavesAccording to the Philippines Labour Code, employers must provide employees with a minimum of 5 days of annual leave. Take notice that these five days include any sick days. If your employee takes less than five days of vacation in a year, the employer is required by law to pay the leftover vacation days at the end of the year.
|Type of Leave||Benefits|
|Maternity Leave||100% of daily pay rate for 105 days (7 of which can be transferred to the father, regardless of marital status)|
|Maternity Leave for miscarriages or emergency termination of pregnancy||100% of daily pay rate for 60 days|
|Solo Parent Maternity Leave||100% of daily pay rate for 120 days|
|Paternity Leave||7 days|
Working Regulations During HolidaysHolidays in the Philippines are separated into two types: regular holidays and special non-working days. Regular Holidays have a set date, such as New Year’s Day, Christmas, Independence Day, National Heroes Day, Labor Day, etc. In contrast, Special Non-Working Days are more flexible and may only apply to specific locations. The wage disparity between the two is represented in their different pay rates. You must pay your Filipino employee 200% of their daily salary for the first 8 hours if you ask them to work on a Regular Holiday. If your employee is compelled to work on a Special Non-Working Day, on the other hand, you must pay them 130% of their daily wage for the first 8 hours.
Places to Look For Remote Talent in the Philippines
If you’re looking to hire qualified workers in the Philippines, the following cities are considered to be the best places to look:
These cities also house the majority of the country’s finest universities. You should expect talent from these locations to have a greater degree of English proficiency and education.
Company Requirements to Hire Employees in the Philippines
Hiring new staff in the Philippines can be a labor-intensive and time-consuming procedure, especially if you choose to do business through a subsidiary. If you create a subsidiary corporation, you may need to meet the following requirements: