Employment cost guide: Philippines

How much will it cost me to hire an employee in the PhiLippines?

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Here are the 4 variables that we guide clients through (based on an employee earning $600/month).

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1. Employment Type: $30 - $600 per month *

Regular Employee

Comparable to W2 in the United States. Taxes are automatically deducted from paychecks, and they’re eligible for PhilHealth (the free, government-funded HMO Health Plan).

Cost: $250 - $600/month for a 3rd-party “Employer of Record” to administer paychecks, tax deductions, and legal compliance.

Contractor (Direct)

a legal relationship between you and the employee similar to 1099 in the United States. Taxes are not automatically deducted from paychecks, and Contractors are not eligible for PhilHealth. You will need a contract and a payment platform.

Cost: $30 - $1000/month for a vendor to transfer funds to the Contractor.

Contractor (3rd-party)

The same as a Direct Contractor, however you’ll engage a 3rd-party as the legal “Contractor of Record” with the employee to create protection. Contractors of Record automatically deduct taxes, some do not.

Cost: $100 - $200/month You will need to use a 3rd-party “Contractor of Record” to legally administer paychecks, tax deductions, and legal compliance.

*Contractors and Regular Employees will be full-time team members who you hire, train, and manage, however there are differences in costs, tax implications, and legal exposure to consider.

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2. Compensation: $600 - $650 per month

Salary

Depends on the role & location. For specific rates see the Salary Guide for Sales & our Salary Guide for Recruitment.

13th month pay

Employers are required to pay a “bonus” of 1-month of salary in December called “13th Month Pay.” This is not required for Contractors.

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3. Employer burden: $0 - $200

Regular Employees

Social Security, Payroll Taxes, etc. is approximately 30% of annualized pay.

Contractors

Nothing is required, however many companies elect to offer a monthly stipend of for $50-$150/month for private health insurance.

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4. REcruitment: $50 - $2,300 (one-time cost)

Do it yourself

$50-$100 for a job ad

Engage a Recruiter

$20-30% of annualized compensation

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