As the demand for skilled labor grows, the Philippines has become an increasingly attractive resource for companies seeking to hire employees overseas. The country’s robust educational system produces qualified candidates in high-demand fields like engineering, technology, and manufacturing, and extensive training in English as a Second Language (ESL) leads to more effective workplace communication with US-based teams.
Because hiring candidates directly requires extensive time and effort, most employers opt to work with an Agent of Record (EOR) to ensure a seamless onboarding process. Reputable EORs like Skuad utilize employee management software platforms to address administrative burdens such as onboarding, maintaining legal and regulatory compliance, and making accurate payments.
We’ve higlighted some of the most significant differences between hiring directly and using an EOR partner in the table below.
| Concern |
Hiring Directly |
Hiring via Skuad EOR |
| Risk of misclassifying workers |
To comply with the labor laws of the Philippines, you will need to consult an in-house legal team. |
Skuad’s legal experts ensure you avoid the risk of worker misclassification. |
| Tax and Compliance |
Understanding the different tax regulations in the Philippines can get confusing at times. |
Skuad handles all administrative burdens on your behalf (e.g., invoicing and expense approvals). |
| Currency Management |
You may need to hire professionals to guide you through the complex, expensive process of managing multi-currency payments. |
Skuad runs payroll in 100+ currencies and provides multi-currency accounts to streamline payments. |
Hiring Employees Through Skuad EOR
Skuad’s employer of record (EOR) platform offers employers a vast amount of resources that allow for an easier hiring and onboarding process. For starters, it provides a significantly more extensive global reach:
| # Countries Supported |
160+ |
| # Currencies Supported |
100+ |
| IP Protection |
An ironclad IP protection and transfer system that retains exclusive rights to copyright, trademarks, and completed work |
| Record-Keeping Services |
Skuad’s all-in-one accounting software is designed to handle onboarding, employee contracts, and payroll |
| Employee Management |
Manage benefits, deductions, attendance, and expenses with an all-in-one suite designed for a growing workforce |
In addition, Skuad provides a team of legal specialists who monitor and adjust our tools to the changing local laws and regulations in the Philippines. Because we do the heavy lifting, Skuad helps simplify the process of bringing on the best talent for any company.
How To Pay Employees in the Philippines
Typically, paying employees in the Philippines involves direct deposits, checks, or PayPal, which can be an exhaustive and time-consuming manual task, especially when employers already have an in-house team of employees to keep up with. Taking a manual approach leaves the door open for miscommunication, missed payments, and poor working relationships.
Partnering with Skuad, on the other hand, provides employers with the ability to pay employees in the Philippines while managing a growing workforce. Automated tasks include the following:
| Name |
Description |
| Multi-Currency Accounts |
Depending on where your business is located, it’s likely that you’ll need to convert your currency to pesos. If you don’t have a multi-currency account like the one provided by Skuad, you may face extensive currency conversion fees that cut into your bottom line. |
| Data Consolidation |
Skuad provides employers with options for automated payments, expense approvals, and reimbursements – all through an easy-to-use payment portal. |
| Bulk Payments |
Having an EOR like Skuad on your side allows you to automate mass payments and schedule them to ensure timeliness and positive employee relations in the future. |
Having these options allows business owners to pay employees confidently while you grow your workforce. Skuad’s platform provides added functionalities for more efficient employee management than ever before. Click the link below to learn more.
The Cost of Hiring Employees in the Philippines
The specifics of your project, the employees’ experience, and differing industry standards all make it difficult to provide a specific number for the cost of hiring employees in the Philippines.
What we can answer definitively, however, is the typical fee structure for paying on your own vs. through an EOR like Skuad:
| Fee Type |
Direct |
Skuad EOR |
| International Processing Fee |
N/A |
$20/month |
| Currency Conversion |
The exchange rate in the Philippines is “free-floating,” which means it can change by the minute. Using a multi-currency account like Skuad’s, however, is either free or below market rates. |
| Beneficiary Bank Fee |
Typically $40-$50 |
None |
| Foreign Transaction Fees |
N/A |
None |
It’s important to note that certain instances can position direct hiring as the cheaper option. Small, non-recurring payments, for example, typically have a smaller associated cost when paying directly.
In general, for business owners – especially those trying to grow their business and establish lasting connections with employees in the Philippines – working with an EOR offers the most cost-effective options.
Challenges of Hiring Employees in the Philippines
There are two main challenges associated with hiring employees in the Philippines:
1. Employee Regulations
The labor code is the primary legislation that sets guidelines for hiring employees in the Philippines. It outlines basic hiring conditions, including:
- A workweek of 8 hours per day, and 48 total hours per week.
- Establishing overtime pay for employees working past these hours.
- Establishes the minimum wage, which varies by region.
- Establishes anti-discrimination laws on the basis of sex, age, and marital status, pregnancy, disability, etc.
Having an EOR solution like Skuad on your team makes managing employee regulations much easier, since it allows you to draft employment contracts that are compliant with said laws, even as they change and evolve over time.
2. Ensuring Registration and Tax Compliance
Employees in the Philippines must remit payroll taxes on a monthly basis, due on either the 10th or the 15th of each month, which is the responsibility of the employer. Income tax brackets change accordingly:
- 0 to 250,000: 0%
- 250,001 to 400,000: 15%
- 400,001 to 800,000: 20%
- 800,001 to 2,000,000: 25%
- 2,00,001 to 8,000,000: 30%
- 8,000,000+: 35%
However, these are examples of just a few provisions. If businesses fail to comply with the remainder of various tax obligations in place, they could face direct legal consequences. This makes it essential to have the right employee management software.
As an employer, understanding and ensuring adherence to tax regulations can get messy.This is why so many businesses deploy employee management software to handle their international employee payroll process.
Read more here
Hire Employees in the Philippines With Skuad
As this page suggests, hiring employees in the Philippines can be complicated. Even after you do the math to ensure that it complements your bottom line, the onboarding process can pose a difficult challenge, even for experienced employers.
That’s why more and more business owners turn to employee management solutions like Skuad to handle the hard work for them. We provide you with tools for onboarding, payment, and project management as well as a team of legal specialists to ensure your project maintains compliance. Contact us to see how a partnership with Skuad might benefit your company.
FAQs
How do you hire employees in the Philippines?
There are two ways of hiring employees in the Philippines. You can hire directly, which is usually time-consuming and carries a high risk of misclassifying workers. Alternatively, you can seek the services of employee management software or an EOR, such as Skuad, that will facilitate the entire hiring process.
How do you pay an employee in the Philippines?
One of the best ways to pay a employee in the Philippines is to partner with an EOR, such as Skuad. It provides a unified platform that boasts robust payroll solutions, such as multi-currency payments, automated employee invoicing, and regulatory compliance.
Who pays the employee’s taxes in the Philippines?
The Philippines’ PAYE (Pay as You Earn) system automatically deducts tax from an employee’s salary, which is the employer's responsibility. This process is made exceptionally easier when using an EOR solution to automate tax withholdings and exceptions for employees.
Can a US company hire an employee in the Philippines?
Yes, US companies can hire employees in the Philippines. However, every such organization must take care to understand the country’s labor laws and other relevant regulations to minimize the risk of non-compliance.
How does Skuad help with hiring and paying employees in the Philippines?
Skuad is a global hiring platform with expertise in over 160+ countries, including the Philippines. It features various capabilities that ensure a simplified hiring journey, like payroll in 100+ currencies, an in-house legal team to deal with all compliance issues, bulk payment and multi-currency options, and more.
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