Payroll in Philippines

Payroll in the Philippines is the process of calculating, managing, and disbursing salaries and wages to employees. It is an important part of organizational operations because it ensures financial accuracy and regulatory compliance. While payroll itself may not be the primary focus of company registration in the Philippines, it’s an essential component of running a business with employees. As part of our services, we offer assistance with payroll management for accurate and timely compensation for your employees.

Calculating payroll in Philippines

The process of calculating payroll in the Philippines begins by determining the employee’s gross pay, which includes their basic salary and any additional earnings. The employers also have the obligation to cover other various payroll taxes, such as contributions to social security, health insurance, and the Home Development Mutual Fund (Pag-IBIG Fund).

There is also the statutory requirement that employers must include in their calculations the 13th-month pay. This mandatory bonus is equivalent to one-twelfth of the total basic salary earned by the employee within the calendar year, payable by 24 December, and must be included when calculating the payroll in the Philippines. Moreover, employers are required to contribute to the Employees’ Compensation Program (EC) to provide benefits for work-related injuries or disabilities suffered by their employees.  

If you just opened a company in the Philippines and hired employees, we can help you with payroll services.

Minimum wage in Philippines

Employers must ensure that they comply with minimum wage laws when determining the salaries and wages of their employees. Payroll in Philippines involves calculating employee compensation, including ensuring that all employees are paid at least the minimum wage.

As of 26 September 2026 (Wage Order NCR-28), the minimum wage in Metro Manila (NCR) is the following:

• For the agriculture sector, it is 718 PHP/day (also applicable to retail/service establishments with up to 15 workers and manufacturers with fewer than 10 workers);
• For the non-agriculture sector, it is 755 PHP/day; lower rates apply in the other regions.

Please note the minimum wage varies based on region and may suffer modifications in the future. Our partner accountants in Philippines can give you more details and updates on the minimum wage.

A typical payroll cycle in the Philippines is monthly, with employees being paid on the last working day of the month.

We offer assistance with managing your employees when you start a business in Philippines.

Overtime in Philippines

Overtime is a key aspect of payroll in the Philippines. Employers must accurately track and record overtime hours worked by employees and calculate the corresponding overtime pay according to the applicable rates. A standard workday in the Philippines generally consists of 8 hours, and employees may work either 5 or 6 days per week. Work performed beyond eight hours a day is considered overtime.

Overtime is generally paid at a rate of 125% of the regular pay. On regular holidays, employees are entitled to double their regular salary. On special holidays, employees must receive a minimum of 30% additional pay. Our payroll services in Philippines will take into account the overtime hours.

There is no specific limit to the number of overtime hours an employee can work. Senior managers do not receive overtime pay.

Once you begin the process of company registration in Philippines, it is important to respect the labor laws and regulations if you hire employees.

Statistics about employment in Philippines

Employment in the Philippines appears to be relatively strong. The country has a high employment rate and a moderate level of unemployment, as per the latest statistics provided by the Philippine Statistics Authority for the year 2025 (preliminary annual averages):

• The employment rate stood at 95.8%;
• The underemployment rate was 11.9%;
• The unemployment rate was 4.2%;
• The percentage of the population that is economically active or engaged in the labor market (the labor force participation rate) was 64.1%.

If you need payroll services in Philippines, you can contact our team. We can also assist you if you wish to immigrate to Philippines.