Simplified Payroll Management Services in the Philippines
Navigate complex Philippine payroll regulations (BIR, SSS, PhilHealth, Pag-IBIG) with confidence. We offer expert payroll management tailored for both local Filipino businesses and international companies operating in the Philippines.
Understanding Payroll Compliance in the Philippines
Complying with payroll regulations in the Philippines ensures timely and accurate pay, avoids legal penalties, maintains employee trust, and guarantees proper remittance of taxes and social contributions.
Mandatory Contributions
Accurate calculation and timely remittance of government contributions are non-negotiable. Both you and your employee share responsibility for these funds that cover retirement, disability, health insurance, and housing.
| Social Contribution | Employee Share | Employer Share |
|---|---|---|
| SSS (Social Security System) | 5% | 10% |
| PhilHealth (National Health Insurance) | 2.5% | 2.5% |
| Pag-IBIG (Philippine Housing Fund) | 1%-2% capped at PHP 200 | 2% capped at PHP 200 |
Income Tax Withholding
As an employer, you act as a withholding agent for the Bureau of Internal Revenue (BIR). This involves:
- Correctly calculating income tax based on the graduated tax rates established by the TRAIN Law.
- Applying the PHP 250,000 annual taxable income exemption for eligible employees.
- Using the latest official BIR withholding tax tables for payroll calculations.
- Remitting withheld taxes to the BIR on time and filing the necessary forms.
Statutory Benefits and Premiums
Philippine labor law mandates several benefits that must be correctly calculated and paid. These are crucial for employee morale and legal compliance.
Overtime Pay
At least +25% on regular days, with higher rates for holidays and rest days.
Night Differential
+10% premium for work between 10 PM and 6 AM
Holiday Pay
200% for regular holidays worked; +30% for special holidays worked.
13th Month Pay
Mandatory bonus (1/12 of basic annual salary) due by Dec 24. Tax-exempt up to PHP90,000.
Payroll Cycle and Record Keeping
Maintaining accurate records and adhering to the correct payment schedule are fundamental to payroll compliance in the Philippines.
Payment Frequency
Employees must be paid at least twice a month, with no more than 16 days between paydays. Monthly payment schedules are generally prohibited
Record Retention
Payroll records must be kept for a minimum of 3 years to comply with DOLE and BIR regulations. However, a 10-year retention period is highly recommended for tax purposes.
Key Records to maintain
This includes payslips, attendance logs (timesheets), tax forms (e.g., BIR Form 2316), proof of contribution remittances, and employment contracts.
Have questions about your payroll regulations in the Philippines?
Outsourcing Your Payroll with Emerhub
Emerhub simplifies compliance with our comprehensive suite of payroll management solutions designed for businesses in the Philippines.
Accurate Salary Calculation
Correct computation of basic pay, overtime, holidays, and all deductions.
Contribution Management
Timely and accurate remittance to SSS, PhilHealth, and Pag-IBIG.
Tax Compliance
Correct withholding tax calculation, remittance, and annualization.
Payslip Generation
Professional and detailed payslips delivered to your employees.
Government Reporting
Handling all necessary reports to DOLE, BIR, and other agencies.
Employee Record Management
Secure and organized maintenance of all your payroll-related data.
Final Pay Processing
Compliant and timely calculation and release for separated employees.
Expert Advisory
Ongoing guidance on Philippine labor laws and payroll regulations.
Emerhub’s Streamlined Payroll Process
Here’s what you can expect when you partner with us
01
Initial Consultation
We start by understanding your unique business needs and current payroll setup.
02
Onboarding and Data Collection
We securely gather all necessary employee data and company documents.
03
Payroll Processing
Our experts calculate salaries, deductions, and contributions with precision.
04
Remittances and Filing
We ensure timely submission of payments and reports to all government agencies.
05
Ongoing Support
You receive payslips, reports, and continuous expert advisory as needed.
Simplify your payroll management needs with Emerhub
Our advisors can provide you with helpful information about payroll management in the Philippines.
Stay compliant with payroll regulations in the Philippines
Let Us Help You Manage Your Payroll and Compliance
Frequently Asked Questions About Payroll Management
The minimum wage in the Philippines varies by region, industry, and company size. It is set by the Regional Tripartite Wages and Productivity Boards. We ensure your payroll adheres to the latest regional wage orders applicable to your business.
13th-month pay is a mandatory benefit for all rank-and-file employees, equivalent to 1/12 of their basic salary earned during the calendar year. It must be paid no later than December 24th. Under the TRAIN Law, 13th-month pay and other benefits are tax-exempt up to a total of PHP 90,000.
According to the Labor Code, wages must be paid at least once every two weeks or twice a month, with intervals not exceeding sixteen (16) days. Monthly payments are generally not permitted.
Both employers and employees must contribute to SSS, PhilHealth, and Pag-IBIG fund. Emerhub ensures accurate calculation and timely remittance of these contributions.
Non-compliance can lead to significant penalties. This includes administrative fines from DOLE and BIR, legal interest on unpaid wages, and even criminal liabilities. For instance, minimum wage violations can result in double indemnity for affected workers.
The BIR and DOLE require payroll records to be retained for a minimum of three (3) years. However, it is strongly advised to keep records for up to ten (10) years for tax purposes.
Yes, we provide comprehensive final pay processing. This includes calculating all due amounts like unpaid salary, unused leave conversions, and pro-rated 13th-month pay, ensuring compliance with the Labor Code. Final pay is generally due within 30 days from separation.
Ready for Simplified, Compliant Payroll in the Philippines?
Schedule a free, no-obligation consultation with our team of experts. We’ll discuss your needs and how we can help you setup and manage your business in the Philippines.
Email Us
philippines@emerhub.com
Call Us
+63 945 726 2635
Visit Us
35th Floor Penthouse, Ecotower, 32nd Street, 9th Ave, Taguig, 1800 Metro Manila, Philippines