The Philippines taxes its citizens on their worldwide income, while non-resident citizens and aliens who are not residents in the Philippines are taxed only on income from sources within the Philippines.
Most companies pay their employees twice a month – usually on the 15th and 30th. Income tax is paid on every salary payment.
The Philippines uses a progressive personal income tax system based on the annual income of the employee. The tax brackets are as follows:
From January 1, 2023, the Philippines will apply new tax rates which will be slightly lower (up to five percentage points) for the middle brackets.
Fringe benefits paid to managerial and supervisory employees by the employer are subject to a final tax of 35%, payable on a quarterly basis. Managerial and supervisory employees are defined as follows:
Fringe benefits are not considered as part of the employee’s annual income and thus will not get taxed twice.
Emerhub's employer of record service allows you to hire anyone in the Philippines with minimum bureaucracy. Your employees will be formally on our payroll while working entirely for your company.
No need to set up a local company in the Philippines. You manage your employee, we take care of taxes, local HR matters, etc.