Country file

What it costs an employer to hire in Philippines

An employer in the Philippines pays ₱1,374,761 on a gross salary of ₱1,200,000. That is 14.6% more than the salary.

At ₱2,400,000 the employer adds 11.4%, because the contribution ceilings start to bite.

Every rate below comes from a statutory source with the date it was read. The figures are for 2026.

A mid salary of ₱1,200,000

Employer-side statutory contributions on a gross salary of ₱1,200,000 a year. Each line is capped at the range shown, so the amount is the rate applied to the part of the salary that falls inside that range.
Contribution	Rate	Annual base charged	Amount	Source
SSS, employer share	10.00%	₱420,000	₱42,000	source checked 2026-08-21
PhilHealth, employer share, half of the 5% premium	2.50%	₱1,200,000	₱30,000	source checked 2026-08-21
Pag-IBIG, housing fund, employer share	2.00%	₱120,000	₱2,400	source checked 2026-08-21
SSS Employees' Compensation, employer-paid	0.09%	₱420,000	₱361	source checked 2026-08-21
Statutory employer contributions			₱74,761

Scroll sideways on a phone.

Everything the law obliges the employer to pay. It excludes anything discretionary, anything an EOR charges, and any insurance premium that is set per employer rather than by statute.
Gross salary	₱1,200,000
Statutory employer contributions	₱74,761
Mandatory extra pay (1 months)	₱100,000
Total employer cost	₱1,374,761
Added on top of the salary	14.6%

A senior salary of ₱2,400,000

Employer-side statutory contributions on a gross salary of ₱2,400,000 a year. Each line is capped at the range shown, so the amount is the rate applied to the part of the salary that falls inside that range.
Contribution	Rate	Annual base charged	Amount	Source
SSS, employer share	10.00%	₱420,000	₱42,000	source checked 2026-08-21
PhilHealth, employer share, half of the 5% premium	2.50%	₱1,200,000	₱30,000	source checked 2026-08-21
Pag-IBIG, housing fund, employer share	2.00%	₱120,000	₱2,400	source checked 2026-08-21
SSS Employees' Compensation, employer-paid	0.09%	₱420,000	₱361	source checked 2026-08-21
Statutory employer contributions			₱74,761

Scroll sideways on a phone.

Everything the law obliges the employer to pay. It excludes anything discretionary, anything an EOR charges, and any insurance premium that is set per employer rather than by statute.
Gross salary	₱2,400,000
Statutory employer contributions	₱74,761
Mandatory extra pay (1 months)	₱200,000
Total employer cost	₱2,674,761
Added on top of the salary	11.4%

The formula

total employer cost = gross salary + sum over each statutory contribution of rate x max(0, min(salary, ceiling) - band floor) (zero if the contribution applies only below a wage the salary exceeds) + gross salary x (mandatory extra months / 12) + gross salary x mandatory severance accrual rate

Each ceiling above applies only to its own line, which is why the employer percentage for Philippines is not the same at both salaries. Employer contribution ceilings, country by country lists where every ceiling on this site sits.

Time off, extra pay and leaving

Statutory paid leave	5 days
Public holidays	12
Mandatory extra pay	1 months
Minimum employer notice	4 weeks

Service Incentive Leave is five paid days a year after one year of service, under Article 95 of the Labor Code. There are 12 regular holidays, paid even when not worked, plus special non-working days proclaimed each year.

13th month pay is statutory under Presidential Decree 851 for every rank-and-file employee with at least one month of service, equal to the total basic salary earned in the year divided by twelve.

Termination for an authorized cause such as redundancy is one month's pay or one month per year of service, whichever is higher. Retrenchment or closure due to losses is half a month per year of service (Article 298).

What the percentage hides

Every one of the four employer charges is capped, and the caps are low: the SSS monthly salary credit tops out at 35,000 pesos and Pag-IBIG at 10,000 pesos a month. Above those levels the marginal statutory cost is zero, so the employer burden on a senior salary is very small in percentage terms.

The Pag-IBIG monthly compensation ceiling of 10,000 pesos means the 2% employer rate yields at most 200 pesos a month whatever the salary.

PhilHealth's 5% premium for 2026 is described by the Philippine Information Agency as the final scheduled adjustment under the Universal Health Care Act.

Not confirmed on a statutory source, and therefore not in any figure above: a machine-readable SSS circular from sss.gov.ph (the table is an image); the count of special non-working days, set by proclamation each year.

Using an employer of record in the Philippines

Everything above is what the state takes. An employer of record adds its own fee on top, and that fee is a flat monthly amount rather than a percentage, so it weighs far more on a junior salary than a senior one. The published prices are here, and the calculator will add one to the figures on this page.

Compare with another country

Written by Kaz, independent publisher. No commercial relationship with the providers named unless it is listed on the disclosure page.

Page last updated 2026-08-30. Sources: statutory bodies only, listed per figure. Rates last verified 2026-08-21. This is not legal, tax or payroll advice and we do not file anyone's payroll.

Every formula on this site is written out in full on Method. Ordering is by computed cost, never by what a provider pays us.

Corrections: contact form.