How to Hire Remote Workers in The Philippines (2026)

The Philippines has long been a top destination for hiring remote employees, and the momentum is only growing. With over 100 million people and a 95% literacy rate, the talent supply is deep and reliable.

English proficiency here is among the highest in Asia.

Filipino professionals are well-versed in working with global teams, making cross-border collaboration smoother than in most markets. As part of your broader global expansion strategy, the Philippines consistently delivers. 

Here is what makes it stand out:

• Strong English communication skills ranked among the top in Asia
• Large pool of professionals in tech, BPO, cybersecurity, and customer success
• Cultural alignment with Western work practices and business norms
• Competitive salary expectations compared to US or European markets

This guide covers everything you need to know to hire remote workers in the Philippines, from choosing the right model to staying compliant with local employment laws in 2026.

What are the Advantages of Hiring in the Philippines?

The Philippines is one of the most strategically valuable hiring markets in Southeast Asia. Whether you are scaling a business development team in the Philippines or building a distributed tech function, the advantages are hard to ignore.

1. English-First Workforce

The Philippines ranks among the top countries in Asia for English proficiency. This reduces onboarding friction, improves documentation quality, and makes real-time collaboration with US or UK teams significantly easier.

2. Cost-Effective Talent

Salaries in the Philippines are competitive relative to Western markets. The lower cost of living allows companies to offer attractive compensation packages locally while keeping overall hiring costs for foreign workers well within budget.

3. Proven Remote Work Culture

The Philippines has a mature remote and outsourcing culture that predates the global shift to distributed work. Filipino professionals are accustomed to async communication, global tools, and offshore team structures.

4. Versatile Talent Pool

From robotics engineers and cybersecurity specialists to customer success managers and finance professionals, the Philippines offers cross-industry depth. You are not limited to one function when building your team here.

5. Time Zone Compatibility

Philippine Standard Time (PST, UTC+8) overlaps well with Australian business hours and can be structured to partially overlap with US and European teams, making it flexible for global collaboration.

How to Hire Remote Workers in the Philippines?

While hiring in the Philippines might sound difficult, it is not impossible. You can work with Filipino talent by setting up an entity, using an employer of record, or hiring contractors. Here is a breakdown of each model.

1. Setting up an Entity

If you want to establish a long-term presence in the Philippines, setting up a new entity and hiring local talent gives you complete autonomy. But this model only works in your favor if you have the budget and management bandwidth.

Hiring a large number of employees in a country demands multiple resources. You need fixed assets in the country and a multi-currency payment solution to pay your offshore employees. Consider setting up an entity in the Philippines only if you plan to expand there long term.

2. Partner with an Employer of Record (EOR) in the Philippines

You can hire and work with Filipino employees without establishing an entity. An employer of record is a legal entity that helps you hire, pay, and manage employees in the Philippines. It takes care of the legalities of hiring and helps mitigate risks. Understanding the benefits of EOR is key to deciding if this model fits your needs.

Partnering with an EOR is an excellent solution because it helps you:

• Experiment with offshore hiring strategies without long-term commitment
• Set up the workforce quickly
• Commence offshore operations without spending too much time and money on compliance and financial risk

You can also explore the best Employer Of Record(EOR) software to understand what features to look for when evaluating providers.

3. Hire Contractors

You can also hire contractors in the Philippines for specialized projects or niche skills. Since a contractor works as a self-employed individual, there are fewer legal obligations. All aspects are bound by a contract that lasts for a specific tenure.

Read More: Cost of an employee vs. cost of a contractor

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Employment Laws to Know to Hire Compliantly in the Philippines

Hiring compliantly in the Philippines means understanding the Labor Code of the Philippines, which is governed by the Department of Labor and Employment (DOLE). Here is a structured breakdown of what matters most.

1. Employment Contracts

There are several types of employment contracts in the Philippines, each with its own regulations:

• Regular: The most common type, an open-ended arrangement with no specified end date.
• Probationary: A temporary contract that converts to regular unless either party terminates the agreement during the probationary period.
• Fixed-Term / Project-Based: Covers a specific period or project. Once it ends, the contract terminates.

2. Working Hours and Pay

Key working hours and pay rules to know before hiring in the Philippines:

• Standard working hours are eight hours daily, with at least one day off per week. Some industries extend to six working days.
• As of 2025, the daily minimum wage in Metro Manila (NCR) is PHP 645 for non-agricultural workers and PHP 608 for agricultural, service, and retail workers. Rates vary by region.
• Employees are entitled to mandatory 13th-month pay, equivalent to 1/12th of their annual basic salary. It can be paid in full by December 24 or split into two payments, with the second due in June.

3. Probation Periods

Probationary periods, while not mandatory, generally range from three to six months and cannot exceed 180 days.

4. Employer Taxes and Contributions

Employers in the Philippines are required to make contributions to:

• Social Security System (SSS)
• Philippine Health Insurance Corporation (PHIC / PhilHealth)
• Home Development Mutual Fund (HDMF / Pag-IBIG)

These are in addition to the employee's gross salary and form a key part of your total employer of record cost when hiring in the Philippines.

5. Termination Process and Severance Pay

Employers can terminate employees for just cause, including misconduct, theft, forgery, and substance use. For probationary employees, a minimum of seven days' notice is required. For regular employees, a minimum of 30 days' notice is required.

Employees terminated for authorized reasons, such as 

• Redundancy
• Illness
• Company closure

are entitled to severance pay. The amount ranges from half a month to one month's pay for every year of service, depending on the reason for termination.

6. Work Permits

If you are considering work permits in the Philippines for foreign nationals working locally, additional requirements apply. Foreign employees typically need an Alien Employment Permit (AEP) issued by DOLE before they can legally work in the country.

What our clients are saying

"Seeing Gloroots' highly detailed invoice breakdowns, payroll reports gave us complete assurance that we were fully compliant."

Julio Arias

Co-founder, Sketchnote

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How to Pay Remote Workers in the Philippines

When paying a Filipino employee, sound payroll management requires accounting for mandatory contributions and statutory benefits beyond base salary. Proper payroll risk management starts with understanding all required deductions and employer costs upfront.

The key components to account for include:

1. 13th-month salary
2. Home Development Mutual Fund (HDMF / Pag-IBIG)
3. Health Insurance (PHIC / PhilHealth)
4. Social Security (SSS)

Here is a sample cost breakdown for an employee with a gross monthly salary of PHP 55,259 (approximately USD 1,169):

In addition to the employee's monthly salary, employer costs accrue to approximately 14% of the employee's gross salary.

Some companies are also exploring crypto payroll options for globally distributed teams, though this remains less common in the Philippines. If you are looking to optimize spend, reviewing strategies for reducing payroll costs is worthwhile before finalizing your compensation structure.

Common Hiring Challenges in the Philippines for Remote Teams

Hiring international employees in the Philippines comes with unique operational hurdles. Here are the four most common ones and how to address them.

1. Compliance Without a Local Entity

Setting up a compliant hire in the Philippines without a legal entity is complex. Philippine labor law covers contracts, contributions, and termination, and getting any of it wrong creates liability.

• Misclassifying workers as contractors instead of employees carries back payment risk
• Statutory contributions to SSS, PHIC, and HDMF must be set up correctly from day one
• Termination procedures have strict notice requirements that vary by contract type
• An EOR assumes legal employer responsibility, removing entity setup as a prerequisite

Using an EOR is the most direct path to compliant hiring without the overhead of establishing a local entity.

2. Payroll Complexity Across Currencies

Philippine payroll involves multiple mandatory deductions, 13th-month obligations, and currency conversion that can create costly errors.

• Salary must be processed in Philippine Peso (PHP), requiring accurate FX conversion
• SSS, PHIC, and HDMF contributions follow tiered schedules that change periodically
• 13th-month pay timing and calculation must align with DOLE requirements
• Payroll errors can result in regulatory penalties and damage employee trust

A centralized payroll platform with built-in Philippine compliance logic reduces this risk significantly.

3. Employee vs. Contractor Misclassification

The distinction between employees and independent contractors in the Philippines is clearly defined by law. Getting it wrong is an expensive mistake.

• Employees are entitled to statutory benefits that contractors are not
• Misclassification can trigger DOLE investigations and back payments
• Contract structure and nature of work both factor into classification
• Define the engagement type before onboarding and use the right contract from the start

Clear documentation and proper contract templates prevent misclassification issues before they arise.

4. Time Zone and Communication Gaps

Philippine Standard Time (UTC+8) creates overlap challenges, especially for US-based teams working standard business hours.

• Core US business hours have limited real-time overlap with Philippine daytime
• Async handoffs can slow down approvals, feedback cycles, and issue resolution
• Without structured workflows, remote Filipino hires may feel disconnected from the team
• Designating a few shared overlap hours each day creates alignment without requiring shift changes

Building async-first processes and documenting decisions thoroughly makes time zone gaps manageable over time.

Building async-first processes and documenting decisions thoroughly makes time zone gaps manageable over time.

Hire Filipino Employees Compliantly With Gloroots

Hiring in the Philippines involves navigating labor law, mandatory contributions, contract structures, and ongoing payroll obligations. For companies without a local entity, this complexity can slow down expansion significantly.

Gloroots simplifies the entire process. As a global employer of record, Gloroots acts as the legal employer of your Filipino hires, handling contracts, payroll, tax filings, and statutory compliance, while you retain full control over day-to-day work.

Here is what sets Gloroots apart:

• End-to-end compliance: Gloroots keeps your hiring aligned with the Labor Code of the Philippines, so you are never exposed to legal or regulatory risk.
• Fast onboarding: Hire and onboard talent in the Philippines in days, not weeks, without setting up a local entity.
• Transparent pricing: Understand your full employer of record cost upfront with no hidden fees.
• Payroll accuracy: Mandatory contributions, 13th-month pay, and tax deductions are handled automatically.
• Scalable for any team size: Whether you are hiring one specialist or building a full team, Gloroots scales with your needs.

Schedule a call with Gloroots to start hiring in the Philippines compliantly and efficiently.

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FAQ

1. Why the Philippines Is a Global Leader in Remote Work?

The Philippines has decades of BPO and outsourcing experience, a large English-proficient workforce, and over 1.5 million IT-BPM professionals. Its strong remote work infrastructure makes it one of Asia's top distributed work hubs.

2. What Remote Work Looks Like in the Philippines?

Most remote workers in the Philippines are based in Metro Manila, Cebu, or Davao, working in tech, customer support, and finance for global companies, often in shifts that overlap with US or Australian hours.

3. What is the Process for Hiring Remote Workers in the Philippines?

Post your job on LinkedIn, Jobstreet, or Kalibrr, shortlist and interview candidates online, send an offer letter, then run a structured onboarding covering tools, workflows, and team expectations. Use net salary figures in all communications.

Read More: Work Permits and Visas in the Philippines

4. What payroll deductions are employers required to make in the Philippines?

Employers must withhold income tax and remit mandatory contributions to SSS, PhilHealth (PHIC), and Pag-IBIG (HDMF). The exact amounts depend on the employee's salary bracket and each agency's current contribution schedule.

5. What is the minimum wage in the Philippines?

As of 2026, the daily minimum wage in Metro Manila is PHP 645 for non-agricultural workers and PHP 608 for agricultural and retail workers. Rates vary by region and are set by Regional Tripartite Boards.

6. In what currency do companies pay remote workers in the Philippines?

Remote workers in the Philippines are typically paid in Philippine Peso (PHP). Foreign companies convert from their home currency and deposit into local bank accounts, often using multi-currency payroll platforms to manage the process.

7. Which parts of salary in the Philippines are taxable?

Basic salary and most allowances are subject to income tax. The 13th-month pay is tax-exempt up to PHP 90,000. De minimis benefits within DOLE-prescribed limits, such as meal and uniform allowances, are also exempt.

8. Is there a difference between allowance and reimbursement in the Philippines?

An allowance is a fixed recurring amount and is generally taxable. A reimbursement covers actual documented work expenses and is typically tax-exempt, provided it is supported by valid receipts and tied to business activity.

9. How much is overtime pay in the Philippines?

Overtime on regular working days is 125% of the hourly rate. Rest day or special holiday overtime is 169%, while overtime on regular holidays is 260%, as mandated by the Labor Code of the Philippines.