PEO&Employer of Record in the Philippines | INS Global
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PEO in Philippines

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.  

Our PEO, sometimes confused with an EOR (Employer of Record), operates in the Philippines as a local partner for companies wishing to expand into this new market without having to establish a separate legal entity.

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Our PEOs will provide your company with several advantages that increase your competitive edge and efficiency. We can legally employ your future staff, operate payroll in the Philippines, and handle benefits and compensation. These services save you money, increase your efficiency, and help you avoid complications that arise from local regulations.   

Want to have a Team in Philippines TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

Global PEO services

PEO or Company Incorporation in the Philippines?

Incorporating a company in the Philippines can be overly complicated and timeconsuming, 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  
Infographic | INS Global

PEO in Philippines - Summary

How a PEO Increases Your Competitive Advantage

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. A PEO reduces these risks, increases your market entry time, and saves you money.  

Increased Focus on Company Expansion

PEOs 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. 

Testimonial

Manuel Ramos

TERAO ASIA

Managing Director

We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.
5/5

How to Start a PEO Agreement in the Philippines?

INS Global’s PEO 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. 

Labor Law in the Philippines

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 in the Philippines

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. 

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%.

Holidays in the Philippines

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 in the Philippines

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.  

Maternity/Paternity Leave in the Philippines

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 in the Philippines

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 Philippinerelated business. 

PEO services

 

Non-resident foreign corporations are subject to the following corporate tax rates regarding the gross income derived from operating inside the Philippines.  

Philippines taxes

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FAQs

No, it is necessary to use a local entity abroad to comply with each country labor law.

Foreign companies can either set up a local entity in each country or use the services a local PEO (Professional Employment Organization) to hire the staff on-site directly.

The employer of record is the legal entity liable for the staff employed in a specific country. In practice, a foreign company can either open a subsidiary to become the employer of record of its abroad employees or use a PEO to act as the employer of record.

Liabilities may vary from country to country and include all the staff management responsibilities: labor contract issues, payroll management, and tax compliance, social security management, expenses claim declaration, hiring and termination
procedures, etc.

In general, 1-month is necessary to have an employee based out abroad using an existing PEO as the employe of record. When incorporating a new subsidiary to be the employer of record, the delay varies from 4-12 months.

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