Employer of Record in the Philippines (EOR in Philippines)
Country Guide
Employer of Record in the Philippines (EOR in Philippines)
Capital City
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Employer Taxes
Employee Costs
Payroll Frequency
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Hire Globally, Pay Locally, Expand Effortlessly
INS Global is your local provider for consulting and Human Rrsources outsourcing. By using our PEO (Professional Employer Organization) in the Philippines, our staff can help you hire employees and start operating your business quickly, all without the burdensome red tape and the associated costs of global expansion.
An Employer of Record (EOR) in the Philippines provides companies with a cost-effective and simple solution for the complications of overseas hiring and employee management.
Want to have a Team in Philippines TODAY?
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PEO or Company Incorporation in the Philippines?
Incorporating a company in the Philippines can be overly complicated and time–consuming, requiring you to understand local laws and to establish a physical presence. PEOs allow you to operate in the Philippines without going through the convoluted, time-consuming steps required to form and incorporate a legal entity.
A PEO:
- Saves time
- Saves money
- Limits potential bureaucratic or legal pitfalls
- Utilizes local networks and expertise
PEO/EOR vs Company Incorporation
The Advantage in Figures
| PEO/EOR | Company Incorporation | |
|---|---|---|
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Price |
80% Less Expensive |
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|
Market Entry |
2-5 Days |
6 Months |
|
Employee Turnover |
Decrease by 14% |
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Recommendation |
98% of the Current PEO Clients |
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|
Administrative Fees |
Saves an Average of $450 |
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|
Costly Payroll and Compliance Fines |
Help Avoid |
|
|
Company Growth Rate |
7 – 9% |
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ROI |
27% |
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|
Closed During Pandemic |
-58% |
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|
PEO/EOR
Company Incorporation
Price
80% Less Expensive
Market Entry
2-5 Days
6 Months
The Benefits of a Partnership
Expert Legal Advice
A PEO offers you extensive knowledge of local regulations and up-to-date best practices for local administrative procedures that will keep your company in legal compliance.
Accelerated Market Entry & Lower Costs
When entering into a new market, like the Philippines, simple mistakes in the HR department can lead to a high occurrence of fees and fines that slow down business.
Increased Focus on Company Expansion
An EOR can provide payroll outsourcing in the Philippines, along with recruitment, headhunting, and management services. When your company doesn’t have to waste valuable time on these issues, you can focus on what matters most, company growth.
Reduced Time for Market Entry
Estimated time for Company Incorporation in the Philippines: 4-12 months
Estimated time to establish a PEO in the Philippines: 5 days
*Estimate
One Point of Contact
Everything you need is provided by one point of contact. This decreases the risk of misunderstandings, and provides you with custom-built solutions.
How to Start an Employer of Record Agreement in the Philippines?
INS Global’s Employer of Record will manage employee recruitment and assignment needs in the Philippines in 4 steps:
1
We determine what bests fits your needs by discussing the exact needs of your business
2
Our consultants provide a level of legal expertise through which you can smoothly establish your employees and begin operations in the Philippines
3
Our consultants will handle the legal aspects of recruiting and employing your staff
4
Your employees can continue focusing on their daily operations while we manage HR
PEO or EOR? Which is Best for You?
Once you’ve decided to expand and enter the Philippines market, choosing between a PEO and an EOR can be a confusing process. You must be fully informed of their differences to make the best decision for your company.
- A PEO is a separate corporation that provides HR services to employees working at other companies.
- These services include payroll outsourcing, tax, and ensuring legal regulatory compliance.
- An EOR is a separate company that acts similarly to a PEO, but is also legally liable for hiring employees on behalf of other companies.
- In addition to the services that are provided by a PEO, an EOR is responsible for all the liabilities of recruiting and employment.
- In a PEO agreement, the contract remains between your company and the employee.
- In an EOR agreement, the contract is directed by your company but made fully between the EOR and the employee.
INS Global offers both PEO and EOR services in the Philippines to best suit your needs.
INS GUIDES
Check Our Philippines Labor Law Guide
Labor Law in the Philippines - 2024 Updated
Employment Contracts In the Philippines
The main source of employment law in the Philippines is the “Labour Code of the Philippines“. The Constitution provides employers with guidance, while the Philippine Supreme Court supplements this guidance with many employment-related legislations.
Additionally, the Department of Labour and Employment (DOLE) provides administrative issuances.
The Labour Code also provides for minimum terms and conditions of employment. Terms can be implied by custom or law, like an employee’s duty to serve their employer with fidelity, honesty, and good faith, and obeying all reasonable dictates from the employer.
Working Hours
Under Article 82 of the Labour Code, working hours apply to all employees, excluding the following:
- government employees
- managerial employees
- field personnel
- family members of the employer who depend on them for support
- domestic helpers
- persons who provide personal service to other people
The normal working hours should not be in excess of 8 hours per day and should exclude the 1-hour daily lunch break. These working hours include all time an employee is required to be on duty, and short rest periods. More info about minimum wage here.
Every employee should be paid a night-work premium that is not less than ten percent of their current wage for each hour of work between 10pm-6am.
Work may be performed beyond 8 hours a day if the employee is paid the overtime rate, which is their traditional wages plus 25%. Any work performed during a holiday shall be paid at their regular rate plus 30%.
Types Of Leave
Holidays and Annual Leave
In the Philippines, holidays include:
Regular Holidays
- January 1 (Saturday) – New Year’s Day
- April 9 (Saturday) – Araw ng Kagitingan
- April 14 – Maundy Thursday
- April 15 – Good Friday
- May 1 (Sunday) – Labor Day
- June 12 (Sunday) – Independence Day
- August 29 (last Monday of August) – National Heroes Day
- November 30 (Wednesday) – Bonifacio Day
- December 25 (Sunday) – Christmas Day
- December 30 (Friday) – Rizal Day
Special Non-Working Days
- February 1 (Tuesday) – Chinese New Year
- February 25 (Friday) – EDSA People Power Revolution Anniversary
- April 16 – Black Saturday
- August 21 (Sunday) – Ninoy Aquino Day
- November 1 (Tuesday) – All Saints’ Day
- December 8 (Thursday) – Feast of the Immaculate Concepction of Mary
Sick Leave
Service Incentive Leave (SIL) is the primary leave benefit tha the Labour Code mandates. In accordance with Article 95 of the Labour Code, every employee who has worked for one year shall be entitled to at least five days paid leave. Companies that employ less than 10 people are exempt from this requirement.
As the Labour Code doesn’t explicitly mention vacation leave or sick leave apart from SIL, there is no minimum required amount for these two categories. The total amount of vacation and sick leave are subject to the contract signed between the employee and the employer.
Parental Leave
Maternity leave consists of 105 days with full pay, with the option of extending the leave for an additional 30 days without pay. Additionally, single female parents are entitled to an additional 15 days with full pay.
For instances of miscarriage or termination of pregnancy, female employees are entitled to 60 days of leave with full pay. None of these leave days are convertible to cash and are all non-cumulative.
Paternity Leave allowance is 7 days.
Tax Law
A domestic corporation is subject to tax earned from its worldwide income. In contrast, a foreign corporation is only subject to the taxes that are earned on income from Philippine sources. Resident foreign companies (companies earning money in the Philippines through a branch office) are taxed in the same way as domestic companies, but only on income earned through Philippine–related business.
Non-resident foreign corporations are subject to the following corporate tax rates regarding the gross income derived from operating inside the Philippines.
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Frequently Asked Questions
faqs
An Employer of Record manages all legal, HR, and compliance tasks, allowing businesses to enter the Philippine market quickly without needing to establish a local entity.
Using an Employer of Record can be more cost-effective than setting up a subsidiary, as it eliminates initial incorporation costs and reduces ongoing administrative expenses. Instead, the Employer of Record provider in the Philippines will provide everything you need for compliant employment based on a percentage of your employee’s pay.
Yes, an Employer of Record manages the entire visa and work permit application process, ensuring compliance with local immigration laws and regulations.
Employer of Record services are beneficial for businesses of all sizes, especially those seeking rapid market entry, cost savings, and reduced administrative burdens.
Employer of Records have local experts who stay updated on regulatory changes and manage all compliance aspects, ensuring your business adheres to Filipino labor laws.
While the Employer of Record is the legal employer, you retain significant control over day-to-day management and operational decisions regarding your employees.
A Global Employer of Record is an effective solutions for companies like yours that are looking to expand a workforce abroad effortlessly.
This approach allows you to outsource the international hiring process quickly and efficiency, providing access to a global talent pool while still managing payroll compliance in each country.