How to Hire Remote Employees In 

The Philippines

The Basics

Philippine Peso (PHP)
Employer Taxes
Payroll Frequency
Official Language
Filipino, English

Employment in 

The Philippines

Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Reduced overhead: Lower cost in expenses, payroll, benefits, and more.
Greater flexibility: Contractors can be brought on as-needed. If not a good fit, you simply don’t have to move forward with the contract.
Reduced legal risk: Contractors aren’t usually protected by employment anti-discrimination and workplace safety laws.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: Not only does this deny workers their proper protections, it can also result in steep penalties and damage to your company. If the IRS determines that employee misclassification has occurred, you will be liable for a percentage of the employees wages, FICA contributions, penalty fines, unpaid taxes, up to a year in prison, and more.
Lack of Control: Contractors are drawn to being independent because it gives them greater control over the work they perform and who they work with. Because they’re not employees, you can’t tell them what to work on and how it should be done.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.
Increased Scrutiny: Using Independent Contractors typically leads to an increased risk of being audited.

Set up a subsidiary in 

The Philippines

A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Philippines can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Philippines, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Philippines.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

Paying employees in Philippines is not the same as paying workers in your own country. Employees have to be paid using Philippines’s employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.

The Philippines

 Specific Information

Working Hours

Working hours are a maximum of 8 hours per day 6 days a week.


Persons whose work is supervisory or managerial are specifically excluded from the overtime pay.

On regular days, all hours worked above the standard 8 hours a day must be compensated by providing a daily salary plus a minimum of 25% additional pay.

On Special holidays, all hours worked above the standard 8 hours a day must be compensated by providing the daily salary plus a minimum of 30% additional pay.

On legal holidays, all hours worked above the standard 8 hours a day must be compensated by providing double the daily salary.

Payroll Tax


  • 11.46% - Employer Contributions

Minimum Wage

The minimum wage is 500.00 PHP a day for the agriculture sector and 537.00 PHP per day for non-agriculture.


Pay Cycle

Salaries are usually paid bi-monthly on the 15th and the 30th of every month.

13th Salary

Employers must provide 1/12 of the annual salary as 13th salary, paid by the 24th of December. It is most commonly paid half at the beginning of the school year in June and the other half around the 24th of December.


Paid Time Off (PTO)

Every employee who has worked for a minimum of one year is entitled to five days of leave. These days can be taken as a holiday or sick leave.

If the leave is not used by the end of the year, employees can receive money to cover the unused days.

Public Holidays

There are 21 holidays with 9 non-working holidays.

Sick Days

Every employee who has worked for a minimum of one year is entitled to five days of leave. These days can be taken as a holiday or sick leave.

Maternity Leave

Post childbirth, the following applies:

105 days of leave if the employee has paid at least three monthly contributions within the 12-month period before the birth.

Mothers who gave birth to twins or triplets are not entitled to any additional maternity leave.

The mother can file her maternity benefits for up to 10 years.

In the event of a miscarriage, the following applies:

60 days of leave

The employee has paid at least three monthly contributions within the 12-month period before the miscarriage.

The leave will be paid by the employer who can later request reimbursement from Social Security.

Paternity Leave

Seven days of full pay to all married male employees in the private and public sectors for the first four deliveries of the legitimate spouse with whom they are cohabiting.

Parental Leave

Single parents are permitted to take additional leave of 7 working days per year with full pay and benefits.

Other Leave


Marriage Leave


Bereavement Leave



Termination Process

An employee may be terminated for just and authorized causes as per Labor Code and for any serious violation of company rules and regulations or the commission of further infractions or violations of the Code of Conduct.

Notice Period

Employees must provide a minimum of 30 days notice.

Severance Pay

Severance pay or separation pay shall only apply if the employee was terminated by the employer (not resigned) for authorized causes. The employee will receive up to 1 month’s salary multiplied by their length of service per year.

Probation Period

The maximum length of a probationary period shall be six months. Once the probation period is completed, the employment contract becomes permanent.