Employer of Record (EOR) in Philippines

An EOR in the Philippines allows businesses to enter the market quickly and help maintain compliance with local laws, all while reducing the overhead costs of establishing a local entity. Atlas HXM offers a seamless EOR service that handles all aspects of employment from payroll processing to compliant administration, including assistance with work permit applications for foreign nationals.

Partner with Atlas HXM for a cost-effective, compliant solution to hire and manage your workforce in the Philippines.

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Country InsightsPhilippinesEmployer of Record

Quick Overview of EOR in Philippines

Expanding into the Philippines doesn't have to mean drowning in paperwork or hefty setup costs. With an Employer of Record (EOR), you can bypass the complexities of local regulations and quickly hire employees, all while maintaining compliance with the Philippines' labor laws. From payroll processing and tax compliance to benefits management, an EOR takes care of the legal nitty-gritty like SSS contributions, PhilHealth, and Pag-IBIG Fund requirements, so you can focus on growing your business without the need to set up a costly local entity.

The EOR model offers a low-risk, cost-effective alternative to setting up a subsidiary. Establishing a local entity in the Philippines can cost anywhere from USD 3,500 to USD 7,500 plus the cost of maintaining human resources (HR), legal assistance, accountants and more. It can also become highly administrative. By partnering with an EOR, you can avoid these setup costs and enter the market faster, avoiding the overhead of a physical office. This is especially beneficial for startups, SMEs, and businesses testing new markets, who need to act quickly and comply with complex local regulations.

Disclaimer: The contents of this article is not legal advice and should be used for reference only. If in doubt, please seek independent legal advice from a lawyer in the relevant jurisdiction.

What You'll Learn

  • Looking to hire in the Philippines without the hassle and administrative burden of setting up a local entity? An EOR helps you onboard employees while maintaining compliance with payroll and local labor laws.

  • With a Direct EOR, you gain control, faster onboarding, and stronger compliance. It is ideal for businesses aiming to scale quickly.

  • On the other hand, an Indirect EOR may be more cost-effective but comes with slower processes and added complexity.

  • EOR service fees typically range from USD 300 to USD 600 (PHP 15,000 to PHP 30,000) per employee per month.

  • Atlas HXM offers a robust Direct EOR solution, providing smooth market entry, compliance, and seamless employee management: all in one platform.

How an EOR Works

Atlas HXM provides EOR services that ensure your business remains compliant with the Philippines' labor laws while you focus on growing your operations, free from administrative and legal burdens.

Candidate Selection

Atlas HXM does not recruit candidates, but will check the employment setup for compliance around new hires like validating right-to-work, reviewing contract terms against Philippine Labor Code rules, and configuring payroll and statutory obligations correctly. EOR providers in the Philippines, including Atlas HXM, can assist with work permit applications for foreign nationals, including Alien Employment Permits (AEP), Special Work Permits (SWP), and Provisional Work Permits (PWP).

Employment Contracts

Atlas HXM drafts and administers employment contracts in compliance with the Philippines Labor Code. In the contract, we clearly outline employment terms to reduce the risk of future disputes, such as:

  • Probationary period

  • Salary, benefits, and working hours

  • Leave entitlements and notice periods

Payroll & Benefits Management

Payroll is processed in Philippine pesos (PHP), including:

  • Accurate tax withholdings and SSS, PhilHealth, and Pag-IBIG contributions

  • Statutory benefits such as 13th month pay and mandatory leave

The EOR also helps maintain compliance with mandatory benefits, so employees are protected under the Philippines' laws.

Work Permit Compliance

In the Philippines, EOR providers can assist with work permit applications for foreign nationals. Atlas HXM manages compliant employment, payroll, SSS, PhilHealth, and Pag-IBIG obligations in alignment with Department of Labor and Employment regulations.

Ongoing HR Support

Provides HR support, including: Leave management, employee relations and regulatory updates throughout the employee's tenure. This allows businesses to focus on core operations, while Atlas HXM handles ongoing compliance.

Costs & Pricing

EOR services in the Philippines are typically billed as a platform/service fee in the range of USD 300–600 (EUR 270–540 / PHP 15,000–30,000) per employee per month. This fee covers administration such as compliant contracts, payroll processing, statutory filings, and HR administration for workers who already hold valid work authorization or for whom work permits are being processed. This service fee is separate from the employee's salary, benefits, taxes, and permit-related costs, which vary by role and jurisdiction. By using an EOR, companies avoid the cost and overhead of setting up a Philippine entity, which can require USD 3,500–7,500 upfront before any operational spend.

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What to Choose: EOR vs PEO

EOR

Employer of Record

An EOR becomes the legal employer for your talent in a country where you do not have an entity. The EOR handles compliant contracts, payroll, statutory benefits, tax filings, and labour-law adherence. You still direct the employee's work. This model suits companies expanding into the Philippines without wanting to form a local entity or take on compliance risk.

PEO

Professional Employer Organization

A PEO provides outsourced HR services like payroll, benefits, HR admin, but only when you already have a local entity. You remain the legal employer, and the PEO shares administrative tasks without taking on employer liability. This model is suitable when you are already established in the country and are only looking to offload HR administration.

What’s Best for You?

  • Choose an EOR when you want to hire in the Philippines without setting up an entity and want a partner who can take on contracts, payroll and compliance.

  • Choose a PEO when you already operate locally and just want HR support.

Work Life in Philippines

The Philippines' employment framework is designed to balance operational needs with employee protections. Here's what you need to know:

Employment Types:

  • Permanent: Regular employees performing activities necessary for the employer's business.

  • Project: Project employees hired for specific undertakings with predetermined completion dates.

  • Fixed-Term: Employees hired for a fixed term with a specific end date, often engaged in temporary, non-permanent roles.

Probation Periods: Probationary contracts must not exceed 6 months from the employee's start date. These periods allow employers to assess employee suitability before offering permanent employment. The EOR ensures that all terms are compliant with the Labor Code.

Working Hours & Overtime: In the Philippines, the standard workday is 8 hours maximum. A Compressed Work Week Scheme (CWW) allows regular work hours to exceed 8 hours but decreases workdays to less than 6. For eligible employees covered by the Labor Code, overtime is paid at 1.25x the basic rate for ordinary days, and the EOR ensures that all overtime is calculated correctly and that employee work hours comply with local regulations.

Leave Entitlements

Leave Type

Eligibility / Duration

Payment / Notes

Annual Leave (Service Incentive Leave)

5 days after 1 year of service

Paid by employer; mandatory service incentive leave

Maternity Leave

105 days (120 days for single mothers)

100% salary paid through SSS

Paternity Leave

7 days for first four deliveries

Paid leave for married male employees

SSS Sickness Benefit

After 3 months of SSS contributions in the past 12 months

90% of average daily salary for hospital confinement over 3 days

Public Holidays

All statutory holidays

Double pay for work on regular holidays; handled by Atlas HXM

Payroll & Benefits: Wages are calculated based on regional minimum wage requirements, with Metro Manila rates at PHP 573-610 daily. Atlas HXM manages payroll in PHP, SSS, PhilHealth, and Pag-IBIG contributions, statutory benefits including mandatory 13th month pay, and private health insurance. Supplemental benefits can include transportation allowances, meal subsidies, and professional development options.

Atlas HXM can help you manage these aspects and can help ensure that employees are supported and compliant with the Philippines' labor laws while businesses can focus on operations without administrative burdens.

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What to Choose: Indirect vs Direct EOR

Direct EOR

The EOR owns the legal entities in the target country, coordinating all employment-related tasks directly. It offers faster onboarding, better compliance, and more control.

Best for: Businesses looking to scale quickly, expand long-term, or enter the Philippines with compliance.

Indirect EOR

The EOR provider acts as an intermediary between the business and a third-party local entity. While it can be cheaper, it may result in delays and compliance complexity.

Best for: Small teams or short-term hires with less urgent compliance needs.

What’s Best for You?

  • For Small Teams or Contractors: Indirect EOR could work, especially for temporary hires or testing a market.

  • For Scaling and Compliance: Direct EOR is the best choice. With Atlas HXM, you'll have control, faster entry, and streamlined compliance.

Taxes & Compliance

The Philippines operates on a calendar-year tax system, running from January 1 to December 31. Employers must remit monthly withholding taxes by the 10th of the following month, file quarterly income tax returns, and provide annual information returns. Individual income tax returns are due by April 15th, with employers issuing certificates of compensation payment (BIR Form 2316) by January 31st.

Category

Details

Employer Payroll Tax

SSS contributions: 9.5% of monthly salary credit PhilHealth contributions: 2.5% of monthly basic salary Pag-IBIG contributions: PHP 100 or 2% capped at PHP 100 Fringe benefits tax: 35% on non-monetary benefits

Employee Payroll Tax

Residents: progressive income tax 20%–35% Non-residents: flat 15% for employment income Minimum wage earners: exempt from income tax Employee contributions: SSS (4.5%), PhilHealth (2.5%), Pag-IBIG (PHP 100 or 2%)

Pension System (SSS)

Mandatory social security savings scheme for retirement, disability, and death benefits Eligibility: 120 monthly contributions for pension Retirement age: 60 (optional) - 65 (mandatory at 65) Monthly pension plus 13th month pension; dependents' allowances included

VAT & EOR Costs: The Philippines applies a 12% Value-Added Tax (VAT). EOR services are generally subject to VAT, either included in quoted fees or added separately. Businesses may claim VAT credits if registered and meeting turnover requirements.

Atlas HXM handles tax compliance, including progressive income tax calculations, SSS, PhilHealth, and Pag-IBIG contributions, year-end filings, and expatriate tax management, ensuring businesses remain compliant with local laws while minimizing administrative burden.

Termination

Employees must give written notice for termination, with statutory minimum notice periods of at least one month for voluntary resignation. For authorized causes like redundancy or retrenchment, employers must provide one month's written notice to both employees and the Department of Labor and Employment. Severance pay varies by termination reason: one month's salary per year of service for redundancy, and half a month's salary per year of service for retrenchment or business closure. The EOR helps ensure proper handling of terminations, including due process requirements, severance calculations, and required documentation.

Visas & Work Permits

In the Philippines, foreign nationals must obtain appropriate work permits such as an Alien Employment Permit (AEP), Special Work Permit (SWP), or Provisional Work Permit (PWP) depending on their assignment duration and circumstances.

EOR providers, including Atlas HXM, can assist with work permit applications and coordinate with the Department of Labor and Employment and Bureau of Immigration. The AEP is the most common permit for long-term employment (1 year, renewable), while SWP covers short-term assignments up to 6 months. Once authorization is in place, Atlas HXM can employ the individual under the EOR model and manage payroll, social security contributions, benefits, and compliant employment administration.

5 Things to Look for in an EOR Provider in Philippines

  1. Local expertise and knowledge of Labor Code, SSS, PhilHealth, and Pag-IBIG requirements, plus Department of Labor and Employment regulations.

  2. Advanced technology for payroll, reporting, and HR system integration with real-time PHP processing capabilities.

  3. Experience in your industry and handling work permit management for foreign nationals.

  4. Strong compliance track record and relationships with government agencies including DOLE, BIR, and social security institutions.

  5. Global presence to support multi-country expansion, with verified security and compliance standards (ISO 27001/27017/27018, GDPR).

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Atlas HXM provides direct EOR services, managing payroll, compliance and benefits efficiently. Atlas HXM’s unified platform automates HR, payroll, and compliance tasks, while offering premium employee support, global benefits, and access to 9,000+ learning courses. Recognized by Everest Group PEAK Matrix 2025 and NelsonHall NEAT Assessment 2025, Atlas HXM combines compliance, technology, and global expertise.

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FAQs

How quickly can I hire employees in the Philippines through an EOR?

With Atlas HXM, you can typically hire employees within 1-2 weeks once candidate selection is complete, including contract preparation and work permit processing if needed.

What is the minimum wage in the Philippines?

Minimum wage varies by region, with Metro Manila rates at PHP 695 per day for non-agricultural businesses and PHP 658 per day for agriculture, retail, service, small manufacturing. Each region sets specific rates for agricultural and non-agricultural workers.

Are foreign employees required to pay Philippine taxes?

Yes. Residents pay progressive rates of 20-35% on worldwide income, while non-residents pay a flat 15% on Philippine-source income.

What social security benefits are mandatory?

All employees must be enrolled in SSS (retirement/disability), PhilHealth (health insurance), and Pag-IBIG Fund (housing loans/savings).

How is the 13th month pay calculated?

The 13th month pay equals one-twelfth of the employee's total basic salary earned during the calendar year, paid by December 24th.

What are the working hour limits in the Philippines?

Regular working hours are limited to 8 hours per day. Overtime requires premium pay of 25% above regular rates for ordinary days, with higher premiums for holidays and rest days.

         

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