The Philippines is a vibrant, talent-rich nation in Southeast Asia, renowned for its skilled, English-speaking workforce and strong global service presence. From Manila’s booming IT and financial services sectors to Cebu’s outsourcing hubs and Davao’s growing technology scene, the Philippines offers companies deep expertise in customer service, finance, healthcare, and software development. The country’s high English proficiency, cultural alignment with Western markets, and competitive labor costs make it one of the most sought-after hiring destinations worldwide.

At the same time, expanding into the Philippines comes with regulatory complexities. Employers must navigate stringent labor protections, payroll tax rules, and compliance with benefits mandated by agencies like SSS, PhilHealth, and Pag-IBIG. Establishing a local entity can take months and requires ongoing administrative upkeep.

For global companies, partnering with an Employer of Record (EOR) in the Philippines offers a faster, safer route. With Gloroots as your EOR, you can seamlessly hire employees in the Philippines, ensure global compliance, manage payroll, and provide competitive employee benefits — all without the burden of setting up a local subsidiary. This allows businesses to focus on growth while Gloroots manages the complexities of local employment law.

What are the key facts about the Philippines’ economy and workforce?

The Philippines is one of Southeast Asia’s fastest-growing economies, driven by strong consumer demand, digital adoption, and its position as a global hub for outsourcing. In 2024, the country’s GDP growth is among the highest in the region, supported by remittances from overseas Filipino workers and a thriving services sector that contributes more than 60% of the economy.

For employers, the Philippines’ workforce is a major draw. The country boasts a young median age of around 26, ensuring a steady pipeline of talent for both entry-level and specialized roles. It also ranks among the top nations globally for English proficiency, making Filipino professionals highly adaptable in multinational teams.

Key industries employing white-collar professionals include:

• IT and Business Process Outsourcing (BPO): A $35+ billion industry employing over 1.5 million people.
  
  
• Finance and Accounting: Skilled professionals in shared service centers and multinational firms.
  
  
• Healthcare and Life Sciences: Nurses, medical coders, and pharmaceutical experts serving both local and global needs.
  
  
• Digital and Creative Services: Marketing, design, and content creation talent thriving in remote-first work environments.
  
  

This combination of cost efficiency, English fluency, and sector-specific expertise makes the Philippines a strategic hiring destination for companies looking to expand globally. With Gloroots as your Employer of Record, businesses can tap into this market quickly while ensuring compliance with local employment laws.

What is the process of setting up an entity in the Philippines?

Setting up a legal entity in the Philippines involves several steps that vary depending on whether you choose to establish a domestic corporation, branch office, or representative office. Each structure comes with different compliance requirements, capital thresholds, and tax implications.

The general process typically includes:

1. Entity Selection – Decide whether to incorporate a domestic corporation, register a branch office, or set up a representative office.
2. Name Verification & Reservation – Reserve and verify the business name with the Securities and Exchange Commission (SEC).
3. Registration with the SEC – File Articles of Incorporation and Bylaws with the SEC.
4. Minimum Capital Requirements – Meet capitalization requirements (for foreign-owned entities, this usually starts at USD 200,000 but can be reduced under certain conditions such as employing at least 50 local employees or introducing advanced technology).
5. Obtain Local Clearances – Secure a Barangay Clearance and Mayor’s Business Permit.
6. Tax Registration – Register with the Bureau of Internal Revenue (BIR) to obtain a Tax Identification Number (TIN), register books of accounts, and apply for official receipts.
7. Social Security & Labor Registration – Enroll with the Social Security System (SSS), PhilHealth, and Pag-IBIG Fund, as well as the Department of Labor and Employment (DOLE).
8. Bank Account Setup – Open a corporate bank account in the Philippines.
9. Ongoing Compliance – Submit regular reports to the SEC, file corporate income tax returns, and comply with labor and social security laws.

This process can take 10–16 weeks, depending on the entity type and the speed of regulatory approvals. For companies eager to hire talent in the Philippines without waiting months for incorporation, partnering with an Employer of Record (EOR) like Gloroots allows you to onboard employees in a matter of days, while staying fully compliant.

What are the main benefits of using Gloroots as an Employer of Record in the Philippines vs. setting up your own entity?

Expanding into the Philippines opens access to one of Asia’s most competitive and English-proficient workforces. But setting up a local entity is far from simple. The process can take months and requires ongoing compliance with multiple layers of labor, tax, and corporate regulations.

Challenges of Setting Up an Entity in the Philippines

• Complex incorporation process: Companies must register with several government bodies including the Securities and Exchange Commission (SEC), Bureau of Internal Revenue (BIR), Social Security System (SSS), PhilHealth, and Pag-IBIG Fund. Each registration has unique documentation and processing timelines.
  
  
• Capital requirements: Certain entity types require a minimum paid-up capital, particularly if hiring foreign workers or serving the domestic market.
  
  
• Local representation rules: Entities often require resident directors or representatives, adding governance and administrative overhead.
  
  
• Labor law compliance: Employers must follow strict rules on working hours, holiday pay, overtime, mandatory benefits, and employee terminations—any misstep can lead to penalties or disputes.
  
  
• Tax complexity: Multiple tax filings, withholding obligations, and city/municipality-level permits create ongoing compliance risks.
  
  
• Time to hire: Entity setup may take 3–6 months, delaying your ability to onboard Filipino talent quickly.
  
  

Why an Employer of Record (EOR) is a Smarter Alternative

An Employer of Record (EOR) like Gloroots eliminates these hurdles by acting as the legal employer on your behalf. The EOR handles all employment contracts, payroll, statutory contributions, and tax filings, while you retain full control of the employee’s day-to-day responsibilities. This means you can hire within days—not months—while avoiding capital commitments and compliance risks. With Gloroots, you can:

• Hire within days instead of months — leveraging our existing infrastructure.
• Stay fully compliant — Gloroots manages contracts, payroll, benefits, and taxes in line with Philippine laws.
• Minimize risk — avoiding the pitfalls of employee misclassification and non-compliance.
• Scale with ease — expand into other countries through Gloroots’ global network without repeating entity setup.
• Focus on growth — while we handle administrative complexities, your teams can focus on building business outcomes.

In essence, using Gloroots as your EOR helps you unlock the Philippines’ talent pool quickly and compliantly, without the heavy cost and effort of entity incorporation.

Direct Entity vs. Employer of Record in the Philippines

By choosing Gloroots as your EOR in the Philippines, you can minimize risks, save time, and focus on building strong, high-performing teams instead of dealing with bureaucracy.

What is the work culture and talent pool like in the Philippines?

The Philippines offers a dynamic workforce that blends technical expertise with cultural adaptability. The country has long been a leading global outsourcing hub, which has cultivated a workforce adept at cross-border collaboration, customer engagement, and project delivery for international clients. This global exposure makes Filipino professionals particularly well-suited for companies seeking remote-ready and client-facing talent.

Work culture in the Philippines is generally hierarchical yet collaborative. Respect for authority and seniority is deeply ingrained, but employees also value teamwork and collective decision-making. Managers are often seen as mentors, and open communication is encouraged in many modern workplaces, especially within multinational and BPO sectors.

The white-collar talent pool is especially strong in sectors such as business process outsourcing (BPO), finance and accounting, IT, healthcare, and creative industries. With more than half a million graduates annually — many trained in STEM fields — the Philippines provides a steady supply of young professionals with both technical skills and strong English communication abilities.

Key hiring hubs include Metro Manila (Quezon City, Makati, Taguig), which houses the country’s financial district and IT centers; Cebu City, a fast-growing hub for IT and digital services; and Davao City, which is emerging as a secondary outsourcing destination. These cities offer employers access to specialized talent pools while maintaining cost advantages compared to other global markets.

The Filipino workforce is also known for its resilience and loyalty. Employees tend to build long-term relationships with employers that offer fair compensation, job stability, and benefits such as healthcare and retirement savings. Companies that prioritize employee well-being and invest in professional development often enjoy lower turnover and higher engagement.

Snapshot of the Philippine Workforce

What are the key employment laws in the Philippines that employers should know?

Employment in the Philippines is governed by the Labor Code of the Philippines and reinforced by mandatory employee entitlements. Employers must carefully comply with these rules to avoid legal disputes and penalties. Below are the most important requirements for global employers:

• Employment Contracts: While verbal agreements are valid, written contracts are strongly recommended. Contracts must specify job responsibilities, pay, benefits, probation (up to 6 months), and termination grounds.
• Working Hours: The standard is 8 hours per day, 40–48 hours per week, with at least one hour for meals. Night shift workers (10 p.m.–6 a.m.) are entitled to a night differential of at least 10% of their hourly rate.
• Overtime Pay: Hours beyond the daily limit must be compensated at 125% of the hourly rate. Work on rest days or holidays commands 130%–200% pay.
• Minimum Wage: Determined by region and industry. In Metro Manila, the minimum daily wage (2025) is PHP 610 (~USD 10.75). Other regions may set lower rates.
• 13th Month Pay: A statutory benefit. All rank-and-file employees must receive a 13th month salary, equivalent to one-twelfth of their annual basic salary, paid no later than December 24.
• Mandatory Government Contributions: Employers must contribute to:
  • Social Security System (SSS) – retirement, disability, and sickness benefits.
  • PhilHealth – public healthcare insurance.
  • Pag-IBIG Fund (HDMF) – housing and savings fund.
• Maternity and Paternity Leave: Female employees get 105 days of paid maternity leave (120 for solo mothers), while fathers are entitled to 7 days of paid paternity leave. Additional parental leave rights exist for solo parents and women workers.
• Annual Leave: Employees with at least one year of service receive 5 days of paid service incentive leave. Employers often provide more as part of competitive packages.
• Sick Leave: Not mandated by law, but covered by SSS for qualifying employees. Many employers voluntarily offer additional sick leave days to attract and retain talent.

These requirements create a complex compliance environment. An Employer of Record (EOR) like Gloroots ensures payroll, benefits, and contracts align with local law — helping companies avoid fines, disputes, or reputational damage.

Direct Entity vs. EOR Compliance in the Philippines

What are the risks of misclassification in the Philippines?

The Philippines has clear distinctions between employees and independent contractors under the Labor Code. However, many international companies risk misclassifying workers when hiring remotely, which can lead to heavy financial and legal consequences.

Key Criteria for Classification

• Control: Employees work under the direct control and supervision of the employer (work hours, processes, tools). Contractors operate independently and control how work is performed.
• Integration: If a worker’s tasks are integral to the business, they are likely an employee. Contractors typically provide peripheral or project-based services.
• Exclusivity: Employees generally work for one employer. Contractors are free to work with multiple clients.
• Benefits & Pay: Employees are entitled to minimum wage, 13th month pay, and statutory benefits (SSS, PhilHealth, Pag-IBIG). Contractors are paid fees for services and cover their own taxes and benefits.

Risks and Penalties for Misclassification

• Back Payments: Employers may be forced to pay retroactive benefits (13th month, social security contributions, paid leave).
• Fines & Penalties: The Department of Labor and Employment (DOLE) can impose significant fines for violations of labor law.
• Legal Disputes: Misclassified workers may file complaints for illegal dismissal, underpayment, or benefit denial, leading to litigation and reputational damage.
• Tax Liabilities: Employers may face back taxes, interest, and penalties if workers are not correctly classified for income tax withholding.

Because the Philippines has strong employee protections, the risks of misclassification are particularly high. Partnering with Gloroots as your Employer of Record (EOR) minimizes these risks by ensuring compliant hiring structures.

Misclassification Risk: Direct Entity vs. EOR in the Philippines

How does an EOR help you run payroll in the Philippines?

Running payroll in the Philippines requires close attention to statutory rules, government-mandated contributions, and region-specific wage orders. Employers must not only calculate wages but also manage compliance with the 13th month pay, night shift differentials, and mandatory contributions to SSS, PhilHealth, and Pag-IBIG. In addition, employers need to file tax withholdings with the Bureau of Internal Revenue (BIR) and submit regular reports to multiple agencies.

For global companies without a local HR and payroll team, this can quickly become complex and error-prone. Mistakes in payroll processing can lead to government penalties, employee dissatisfaction, and reputational risk.

With Gloroots as your Employer of Record (EOR), payroll becomes seamless. Gloroots:

• Calculates and administers wages in compliance with regional minimum wage boards.
• Ensures timely payment of the 13th month salary and any overtime or night differential pay.
• Handles deductions and employer contributions to SSS, PhilHealth, and Pag-IBIG.
• Files tax withholdings with the BIR accurately and on schedule.
• Provides transparent reporting, making it easy for finance teams to forecast costs and manage compliance.

This means employees are paid correctly and on time, while employers avoid the administrative and legal risks associated with payroll errors.

Compare Payroll Management: Direct Entity vs. Gloroots EOR in the Philippines

How does tax compliance work in the Philippines?

Tax compliance in the Philippines is multi-layered, involving income taxes, payroll taxes, and mandatory social contributions. Employers must not only withhold and remit employee income tax to the Bureau of Internal Revenue (BIR) but also contribute to three major government funds: SSS (Social Security System), PhilHealth (healthcare), and Pag-IBIG Fund (housing and savings).

For international employers, this requires ongoing monitoring of regulatory changes, filing requirements, and region-specific wage boards. Non-compliance can result in financial penalties, legal disputes, or reputational damage.

Gloroots, as an Employer of Record (EOR), simplifies this complexity by handling tax calculations, withholdings, remittances, and filings. This ensures employees receive accurate pay while employers remain fully compliant with Philippine tax law.

What are the Individual Income Tax Brackets (2025, TRAIN Law Schedule)?

What are the Employer & Employee Contributions (2025)?

Compare Direct Entity vs. EOR Tax Compliance in the Philippines

What benefits and entitlements do employees in the Philippines receive?

Employee entitlements in the Philippines are a mix of statutory benefits mandated by law and voluntary benefits that employers often provide to attract and retain top talent. Understanding these obligations is crucial, as failure to provide them can expose companies to disputes, penalties, and reputational risks.

Statutory Benefits (Mandatory)

• 13th Month Pay: Equivalent to one month’s basic salary (calculated as 1/12 of annual salary), payable no later than December 24. Mandatory for all rank-and-file employees.
• Social Security System (SSS): Covers retirement, disability, sickness, and death benefits. Contributions are shared between employer and employee.
• PhilHealth: Government health insurance program providing hospitalization and medical expense coverage, with contributions shared equally.
• Pag-IBIG Fund (HDMF): A mandatory savings and housing fund, also jointly contributed by employer and employee.
• Maternity Leave: 105 days paid leave for female employees (120 days for solo mothers), funded in part by SSS.
• Paternity Leave: 7 days of paid leave for married male employees.
• Service Incentive Leave (SIL): Minimum of 5 paid leave days annually for employees with at least one year of service.
• Other Leaves: Solo parent leave (7 days), special leave for women (2 months for gynecological conditions), and leave for victims of violence against women and children.

Voluntary / Supplemental Benefits (Commonly Offered)

Many companies in the Philippines provide benefits that go beyond statutory requirements to remain competitive in a talent-driven market:

• Private Health Insurance: Comprehensive medical, dental, and vision coverage.
• Life & Accident Insurance: Often bundled with healthcare packages.
• Performance Bonuses: Beyond the 13th month pay, employers frequently offer quarterly or annual bonuses.
• Meal and Transportation Allowances: Stipends or allowances to cover daily commuting and meals.
• Wellness Programs: Gym memberships, wellness allowances, or mental health support.
• Flexible Work Arrangements: Remote work, hybrid setups, or flexible hours are increasingly valued post-pandemic.
• Learning & Development: Professional certifications, training budgets, and education allowances.

Gloroots helps employers not only meet mandatory entitlements but also design competitive global employee benefits packages that resonate with Filipino professionals. This ensures compliance while supporting retention and employee satisfaction.

Direct Entity vs. EOR in Employee Benefits

What’s involved in hiring and onboarding employees in the Philippines?

Hiring in the Philippines requires compliance with both labor laws and local administrative requirements. For foreign employers, this can be a lengthy process, as it often involves establishing a legal entity, registering with multiple government agencies, and drafting compliant employment contracts.

Direct Entity Hiring Process

When hiring through a locally incorporated entity, employers must:

1. Register the Entity with the Securities and Exchange Commission (SEC) and Bureau of Internal Revenue (BIR).
2. Enroll with SSS, PhilHealth, and Pag-IBIG to manage employee benefits.
3. Draft Employment Contracts in compliance with the Labor Code, including probationary terms (up to 6 months), benefits, and grounds for termination.
4. Recruit Talent — typically through job boards, recruitment agencies, or referrals.
5. Onboard Employees by enrolling them in statutory schemes, setting up payroll, and communicating company policies.

This process can take several months, delaying hiring timelines and market entry.

Hiring with Gloroots EOR

Gloroots eliminates these barriers by allowing you to hire and onboard employees in the Philippines within days. Here’s how:

• Fast Market Entry: Hire without setting up a local entity.
• Compliant Contracts: Gloroots issues employment contracts aligned with Philippine labor law.
• Payroll & Benefits Enrollment: Employees are automatically registered with SSS, PhilHealth, and Pag-IBIG, while Gloroots also administers 13th month pay, overtime, and leave.
• Streamlined Onboarding: Employees receive a smooth onboarding experience with access to company tools, benefits, and clear communication of employment terms.
• Scalability: Add or reduce headcount easily without the administrative burdens of entity ownership.

This allows employers to focus on sourcing the right talent while Gloroots manages compliance and administration.

Compare Direct Entity vs. EOR in Hiring & Onboarding

How do you successfully manage a workforce in the Philippines?

Managing employees in the Philippines requires a balance of cultural awareness, structured HR processes, and strict compliance with local labor laws. Employers who understand both the professional values and legal framework of the country enjoy higher engagement and retention.

1. Cultural Considerations

Filipino professionals are known for being hardworking, adaptable, and collaborative. Respect for hierarchy is valued, but modern workplaces are increasingly open and participatory, especially in IT, BPO, and multinational companies. Employers who foster mentorship-based leadership and encourage team collaboration often build stronger employee loyalty.

Communication is also key. Since the Philippines is one of the world’s largest English-speaking nations, language barriers are minimal. However, managers should remain sensitive to indirect communication styles — employees may avoid confrontation or hesitate to challenge authority openly. Creating a safe space for feedback can improve engagement.

2. HR Practices

• Recognition & Rewards: Filipino employees value both monetary and non-monetary recognition. Beyond the mandatory 13th month pay, performance bonuses and career development opportunities are strong motivators.
• Work-Life Balance: Flexible schedules and hybrid work arrangements are increasingly popular. Employers offering wellness programs, mental health support, and family-friendly policies see higher retention.
• Training & Development: With a young workforce, investment in skills development (technical and leadership) is essential for retention and productivity.

3. Compliance & Administration

Employers must comply with statutory obligations such as SSS, PhilHealth, Pag-IBIG, and wage orders. Employee relations must also follow due process for probation, discipline, and termination to avoid disputes. Payroll accuracy and timely delivery of benefits are essential to maintain trust.

With Gloroots as your Employer of Record (EOR), managing a workforce becomes simpler. We handle payroll, compliance, benefits, and HR administration, allowing you to focus on performance management, engagement, and business outcomes.

Direct Entity vs. Workforce Management with Gloroots

What are the key steps and requirements in terminating employees in the Philippines?

Employee termination in the Philippines is highly regulated under the Labor Code, designed to protect employees from unfair dismissal. Employers must strictly follow due process to avoid legal disputes and liability for illegal dismissal claims.

Termination Process

• Just Causes: Termination may occur due to misconduct, gross neglect, fraud, commission of a crime, or other serious infractions.
• Authorized Causes: Employers may also terminate employees for redundancy, retrenchment to prevent losses, closure of business, or employee illness.
• Due Process: Employers must issue a Notice to Explain (NTE), allow the employee to respond, and conduct a hearing or conference before deciding. A Notice of Termination must then be issued, clearly stating the grounds.

Notice Period

• Standard: At least 30 days’ written notice for terminations due to authorized causes.
• Immediate termination may apply for just causes, but due process still requires notice and opportunity to be heard.

Severance Pay

• For Authorized Causes: Employees are entitled to severance pay of 1 month’s pay or ½ month’s pay per year of service, whichever is higher.
• For Just Causes: No severance pay is required if termination is due to employee fault (e.g., serious misconduct).

Probationary Period

• Maximum of 6 months.
• Employers may terminate probationary employees for just cause or failure to meet agreed performance standards, provided due process is followed.

Because of the stringent protections, terminating employees in the Philippines requires careful documentation and compliance. With Gloroots as your EOR, employers gain local HR expertise to ensure all terminations are handled fairly and legally.

Direct Entity vs. EOR in Employee Termination

Q. What is the offboarding process in the Philippines?

Narrative Overview

The offboarding process in the Philippines is a deliberate, compliant, and respectful procedure that formally concludes the employment relationship. Governed by the Labor Code of the Philippines and reinforced through Department of Labor and Employment (DOLE) advisories, it ensures legal compliance, secure knowledge transfer, and asset protection. Companies typically require a clearance process that confirms return of company property, settlement of financial accounts, and proper handover of tasks—culminating in issuance of final pay and a Certificate of Employment (COE). With an EOR like Gloroots, businesses benefit from a fully managed offboarding experience that ensures every legal, administrative, and cultural nuance of the Philippines is handled carefully and promptly—without compromising on compliance or employee goodwill.

Key Phases of the Offboarding Process in the Philippines

Here’s a detailed breakdown of how offboarding generally unfolds:

• Notice of Resignation / Termination
  Employees voluntarily resigning are typically required to provide at least 30 days’ written notice, aligned with the Labor Code.
• Clearance Process (Exit Clearance)
  Employers issue a clearance form, often department-based, requiring sign-offs confirming that the employee has:
  • Returned company property (laptops, IDs, equipment)
  • Settled any debts, advances, or financial obligations
  • Properly handed over tasks and responsibilities
• Final Pay & Benefits Release
  Upon completion of the clearance, final compensation must be issued, which includes unpaid salary, pro-rated 13th-month pay, unused leave conversions, and other entitlements—within 30 days of separation. The clearance requirement is legally valid, but final pay cannot be unduly or arbitrarily withheld.
• Certificate of Employment (COE)
  Employees have a statutory right to request a COE. Employers are obliged to issue it—typically within three working days of request.
• Exit Interview & Communication
  Although not mandated, conducting an exit interview and communicating the departure to relevant stakeholders helps uphold organizational learning, maintain employer brand, and facilitate internal transition.

Offboarding: Direct Entity vs Gloroots EOR (Philippines)

Why This Matters

Each step—notice, clearance, final pay, COE—is legally grounded in Philippine labor standards. An offboarding process that is compliant, transparent, and respectful not only avoids legal disputes but also cultivates goodwill among departing employees. This can yield positive referrals, preserve institutional knowledge, and reflect favorably on your employer brand.

With Gloroots, you delegate this entire trusted offboarding workflow to a partner that is on the ground in the Philippines, ensuring consistency, legal adherence, and a humane experience for outgoing employees.

What costs and financial planning do you need with an Employer of Record in the Philippines?

When expanding into the Philippines, employers must plan for both direct employment costs (wages, taxes, benefits) and administrative costs (entity setup, legal compliance, HR systems). For companies establishing their own entity, these costs can quickly add up.

Costs with Direct Entity Setup

• Entity Setup Fees: Incorporation with the Securities and Exchange Commission (SEC), Bureau of Internal Revenue (BIR) registration, and permits can cost thousands of USD.
• Ongoing Administrative Costs: Accounting, audits, legal counsel, HR staff, payroll software, and compliance filings.
• Employee Costs: Wages, 13th month pay, overtime, night shift pay, social contributions (SSS, PhilHealth, Pag-IBIG).
• Hidden Risks: Penalties for non-compliance, back pay for misclassification, and litigation costs in case of disputes.

Costs with Gloroots EOR

• Transparent EOR Fees: A predictable monthly fee per employee, covering HR, payroll, compliance, and benefits administration.
• No Entity Setup: Save months of time and thousands in upfront incorporation and legal costs.
• Bundled Compliance: Contributions to SSS, PhilHealth, and Pag-IBIG, plus 13th month pay, are managed within payroll.
• Scalable Pricing: Pay only for active employees, with no overhead of maintaining an entity when scaling down.

By using Gloroots, employers gain cost predictability and compliance assurance, avoiding the significant hidden costs of running their own entity in the Philippines.

Direct Entity vs. EOR Costs in the Philippines

What challenges might you face, and how do you solve them using EOR in the Philippines?

Expanding into the Philippines offers access to a young, skilled workforce, but employers often encounter challenges tied to compliance, administration, and workforce management. Without local expertise, these challenges can delay hiring, increase costs, and expose companies to risks.

Key Challenges Employers Face

1. Complex Compliance: The Philippines has region-specific wage orders, mandatory benefits (SSS, PhilHealth, Pag-IBIG), and a required 13th month pay. Staying updated with regulatory changes is time-consuming and high-risk.
2. Entity Setup Delays: Incorporating a local entity can take 3–6 months, slowing down market entry.
3. Payroll Administration: Multi-agency reporting (BIR, SSS, PhilHealth, Pag-IBIG) creates room for costly payroll errors.
4. Misclassification Risks: Companies hiring contractors risk reclassification as employees, leading to back pay and penalties.
5. Termination Complexity: The Labor Code provides strong employee protections; errors in notice or severance can lead to illegal dismissal claims.
6. Talent Retention: Filipino professionals expect competitive benefits beyond statutory requirements. Companies without localized packages risk higher attrition.

How Gloroots EOR Solves These Challenges

• Fast Market Entry: Start hiring in days, without waiting months for incorporation.
• Guaranteed Compliance: Gloroots manages contracts, payroll, benefits, and taxes in line with Philippine law.
• Seamless Payroll: Contributions to SSS, PhilHealth, and Pag-IBIG, plus 13th month pay, are handled automatically.
• Risk Mitigation: Avoid misclassification penalties with compliant contracts and HR structures.
• Employee-Centric Benefits: Access to global employee benefits tailored to the Philippine market.
• Scalable Growth: Expand or reduce headcount across markets with Gloroots’ global infrastructure.

Compare Challenges Direct Entity vs. EOR Solutions in the Philippines

Conclusion

The Philippines offers global companies access to a young, English-proficient, and highly skilled workforce, making it one of the most attractive destinations for international hiring. However, navigating its employment laws, payroll rules, and statutory benefits can be daunting without local expertise.

With Gloroots as your Employer of Record (EOR), you can hire in the Philippines quickly, stay fully compliant, and provide competitive benefits — all without the burden of setting up and managing a local entity. From payroll management and benefits administration to misclassification protection and global compliance, Gloroots enables you to focus on scaling your teams and driving business outcomes.

For companies seeking a compliant, scalable, and cost-efficient way to expand into the Philippines, Gloroots makes global hiring simple.