HR Software for Philippines
Leave Policy
Maternity Leave
Pregnant employees who have worked 90 consecutive days are entitled to 105 days of paid leave. An additional 15 days of paid leave are granted if the employee is considered a single parent. 14 days must be taken before the birth of the child. The remaining days should be taken after the birth of the child. During this period, the employee receives 100% of his average salary and Social Security is responsible for this salary.
The employee can extend the vacation for a further 30 days without pay.
You can use the leave module in IceHrm to manage maternity leave in Philippines.
Paternity Leave
Employees are entitled to seven calendar days of paid paternity leave, which must be taken after the birth of the child. The employee receives 100% of his average salary during this period and the employer is responsible for this compensation.
The employee can extend the vacation without pay.
Parental Leave
There is no parental leave law in the Philippines. However, employees may be entitled to maternity and paternity leave. Single parents can also take advantage of the “Solo Parent Policy”.
Sick Leave
Employees in the Philippines are not entitled to sick leave in addition to their vacation pay (PTO).
Employees should submit their sick leave on the IceHrm platform using the “Time Off” feature.
If an employee has used all of their vacation and needs to take additional days to recover from illness, the additional days are unpaid vacation.
Employees can receive reimbursement through the sickness benefit of the Social Security System (SSS). This sick pay is treated similarly to maternity pay and ensures that eligible employees receive a portion of their regular wages.
Pay & Tax
Minimum Wage Requirements
In the Philippines, the applicable minimum wage is determined depending on the region. There is no national minimum wage. The applicable minimum wage is determined by the region in which the employer’s company is located.
For IceHrm, which is based in the National Capital Region (NCR), the minimum wage is PHP 13,267.50 per month.
Individual Income Tax
Personal income tax ranges from 0% to 35%. Income tax is calculated at progressive rates. Several additional factors can affect overall rates, such as: B. the household status and the number of children.
| Gross Annual Income | Tax Rate (%) |
|---|---|
| Up to PHP 250,000 | 0% |
| Up to PHP 400,000 | 20% |
| Up to PHP 800,000 | 25% |
| Up to PHP 2,000,000 | 30% |
| Up to PHP 8,000,000 | 30% |
| Over PHP 8,000,000 | 35% |
Payroll Cost
Employer costs are generally estimated at 11.07% of employee salary.
- Philippine Health Insurance Corporation (PhilHealth): 2.5%
- Social Security: 8.57%
- Home Development Fund (HDMF): PHP 200
The Philippine Health Insurance (PhilHealth) contribution is capped at PHP 1,600/month.
Social security contributions are capped at PHP 2,880/month.
Overtime Pay & Maximum Hours
The standard working hours are 8 hours per day and 40 hours per week. Standard working hours are Monday to Friday.
Pay for overtime is mandatory and cannot be counted towards salary. Hours outside of standard working hours are considered overtime. Employees receive compensation for additional hours:
- 125% of the hourly rate on working days
- 130% of the hourly rate on public holidays
Termination
Termination Requirements
Dismissals must take into account complex rules and the regulations of the country in which an employee is employed. Off-boarding is always carried out by the employer with the main participants. It may include ad hoc fees as well as required or recommended steps for specific termination cases.
An employee may be terminated for justifiable reasons in accordance with the Labor Code. The employer must give notice of termination in writing.
Notice Period
The minimum notice period is usually 30 days.
Severance for Employees
The amount of the severance payment depends on the reason for the termination of the employment relationship and is between 0.5 month’s salary and 1 month’s salary for each year of employment.
In the event of dismissal, at least 1 month’s salary or at least 1 month’s salary for each year* of the employee’s service, whichever is greater.
In case of dismissal to avoid loss, closure or illness, at least 1 month’s salary or at least 0.5 month’s salary for each year* of the employee’s service, whichever is greater.
There are no legal requirements when closing or ceasing operations.
In order to protect you from unforeseen financial risks arising from the termination of the employment relationship, IceHrm applies a severance pay provision in all employment contracts in this country. IceHrm has extensive expertise in managing litigation risk around the world and our severance provision is calculated based on prevailing common law or statutory claims and best local practices. If your employee resigns or is not entitled to severance pay, you will receive a refund of any unused amounts.
Statutory Time Off
Paid Time Off
Full-time employees are entitled to 5 days of paid vacation per year. PTO eligibility is calculated monthly at 0.42 days per month and begins on the start date. If the vacation is not taken by the end of the year, employees can receive a payout.
Part-time employees are not entitled to vacation.
Public Holidays
The Philippines observes 18 national and 3 regional holidays, depending on where the employee lives. In addition, there are 8 special holidays that are not working days.
National holidays include:
- New Year’s Day
- Araw ng Kagitingan (Day of Valor)
- Maundy Thursday
- Good Friday
- Labor Day
- Independence Day
- National Heroes Day
- Bonifacio Day
- Christmas Day
- Rizal Day
Special non-working days:
- Non-working Day (Day After New Year’s Day)
- EDSA People Power Revolution Anniversary
- Black Saturday
- Ninoy Aquino Day
- All Saints’ Day
- All Souls’ Day
- Feast of the Immaculate Conception of Mary
- Last Day of the Year
Onboarding
Onboarding
Onboarding takes 2 working days.
The employee must submit and provide the required documents before the start date. It is not optional to submit mandatory documents subsequently, only optional documents. Before the start date, the accountants will register the employee with the SSS (Social Security System) and PHIL Health.
Additional Info
Employment Contract Details
Contracts must be written in English and may be bilingual. They must be in writing and signed by both parties.
A contract must contain:
- Surname
- Start date
- Length of employment
- Job descrption
- Conditions for Termination
Probation Period
Probationary periods are not mandatory. The standard probation period is 90 days and the maximum probation period is 180 days (six months). Fixed-term contracts cannot have a trial period.