Hiring Employees in the Philippines: A 2026 Guide for Foreign Companies

For a foreign company entering the Philippine market, hiring local talent is often the first operational milestone — and the first compliance obligation. The Philippines has a well-developed labour framework: employee protections are strong, statutory benefits are layered, and agencies are active. Foreign ownership of the employing entity is not a barrier, but you must be registered before you bring anyone on.

Step 1: Register the employing entity

Before any hire, the company must be registered with the Securities and Exchange Commission (SEC) and hold a valid BIR Certificate of Registration (COR). Company registration typically precedes all HR activity. Once registered, you then need employer accounts with three statutory agencies:

• SSS (Social Security System) — obtain an Employer ID
• PhilHealth — obtain a PhilHealth Employer Number
• Pag-IBIG / HDMF — obtain a Pag-IBIG Employer ID

Employees must be individually enrolled with each agency within 30 days of hiring. Missing enrollments create retroactive liability — the obligation runs from the first day of employment, not from the date of registration.

Step 2: Set the employment terms in writing

Philippine law recognises three main employment arrangements: regular (indefinite), probationary (up to six months, after which the employee is deemed regular unless validly terminated), and fixed-term (permissible but scrutinised by courts — use a clear end-date tied to a specific project or season).

Your employment contract should state the position, compensation, work schedule, probationary duration and performance criteria, and any post-employment obligations. For managerial or confidential roles, include IP assignment and non-disclosure clauses. The DOLE Standard Employment Contract templates are a useful starting point.

Step 3: Pay at or above minimum wage

Minimum wage rates in the Philippines are set by region by the Regional Tripartite Wages and Productivity Boards (RTWPBs). As of June 2026, the NCR (Metro Manila) daily minimum wage is PHP 695 for non-agricultural workers under Wage Order No. NCR-26. Rates outside NCR range from approximately PHP 366 to PHP 620 per day depending on the region and industry classification. New wage orders can take effect mid-year; check the NWPC website for the latest per-region figures. See our regional minimum wage breakdown for a current table.

Step 4: Statutory benefits and deductions

All employees (regardless of citizenship of the employer) are entitled to:

• SSS contributions — 15% of Monthly Salary Credit; employer pays 10%, employee pays 5%
• PhilHealth contributions — 5% of basic monthly salary, split equally (2.5% each), salary ceiling PHP 100,000
• Pag-IBIG contributions — 2% each (employer and employee), contribution ceiling PHP 10,000/month
• 13th-month pay — equal to one-twelfth of annual basic salary, payable by December 24 each year to all rank-and-file employees
• Service incentive leave — five days paid leave per year after one year of service
• Statutory holiday pay — premium rates for regular and special non-working days

Employers must also withhold income tax on compensation and remit it to the BIR monthly. See our payroll guide for contribution tables and remittance schedules.

Step 5: DOLE notification obligations

Companies with 10 or more employees must register with DOLE and maintain a General Labor Standards compliance programme. Establishments with five or more employees must submit an annual DOLE Report on Labor and Employment. For reductions in force or mass layoffs, prior notice to DOLE is required.

Who manages this for you?

Many foreign companies operating in the Philippines outsource payroll, statutory remittances, and HR compliance rather than building in-house capacity from day one. Our HR and payroll service covers employer registration, employment contract templates, statutory setup, and ongoing remittance management. See our pricing or book a consultation to discuss your headcount.