Contracts and Probation
Employees may be hired on regular, probationary or fixed-term terms. Probation may last up to six months. An employee who continues working after probation becomes a regular employee. Employees have security of tenure; there is no at-will employment.
Minimum Wage
Minimum wages are set by region and apply according to workplace location. The Metro Manila non-agricultural minimum is PHP 755 per day since 26 September 2026 under Wage Order No. NCR-28. Other regions set lower rates. Wage orders change, so check the current workplace rate. An employment contract cannot pay below the applicable minimum.
13th-Month Pay
Presidential Decree No. 851 requires a 13th-month salary of at least 1/12 of basic salary earned during the calendar year, due by December 24. Employees who joined or left during the year receive a pro rata amount if they worked at least one month.
Leave and Holidays
- Service Incentive Leave: 5 paid days after one year of service.
- Maternity leave: 105 days with full pay under RA 11210, plus 15 additional days for solo parents.
- Paternity leave: 7 days.
- Solo-parent parental leave: 7 days after six months of service.
- Special leave for gynecological surgery: two months under the Magna Carta of Women for employees with at least six months of service.
- Work on a regular holiday: 200% of the daily rate.
- Work on a special non-working day: 130% of the daily rate.
Working Hours and Overtime
The normal working day is eight hours. Ordinary-day overtime is paid at a premium of at least 125% of the hourly rate. Higher premiums apply on rest days and holidays. Managerial employees are generally exempt from overtime rules.
Termination and Separation Pay
Dismissal requires a just cause or an authorized cause, with due process. Authorized-cause termination requires 30 days' written notice to both the employee and DOLE.
Separation pay is generally one month's pay per year of service for redundancy and labor-saving devices, and one-half month per year for retrenchment or closure. Final pay must be released within 30 days of separation. Mutual separation by agreement is also possible.
Statutory Contributions
| Item | Employer | Employee | Basis |
|---|---|---|---|
| SSS | 10% plus a small Employees’ Compensation contribution | 5% | Monthly salary credit between PHP 5,000 and PHP 35,000. |
| PhilHealth | 2.5% | 2.5% | 5% split equally; income floor PHP 10,000 and ceiling PHP 100,000. |
| Pag-IBIG | 2% | 2% | Compensation up to PHP 10,000, maximum PHP 200 each. |
| Income tax | Withholds income tax | Progressive rates from 0% to 35% | Withheld by the employer. |
Payroll and Records
Salaries are usually paid twice a month, on the 15th and the last day of the month. Provide itemized payslips and keep payroll records.