Payroll Outsourcing ensures you that payroll will be handled by experts with wide-ranging experience. This means everything is done correctly and in accordance with the latest laws and regulations. It can also save time, as there’s no need to invest in training and focus on what’s more important. Additionally, there will be an assigned dedicated team to reduce error risk and ensure that every data is accurate. On the other hand, outsourcing payroll can sometimes be expensive, especially if you have a lot of employees. It also means you have less control over the process and need coordination in order to make changes.
What are the HR/ Compensation practices in the Philippines?
A: Below are the standard/common practices though:
- Payroll is computed and employees’ salaries are released bi-monthly. Some companies release salaries on a monthly basis but this should be agreed upon by both the employer and employees and should be indicated in the employment contract. However, we strongly recommend to release salaries bi-monthly as this is what is stated in the labor code.
- Rank and file employees are entitled to overtime and holiday pay.
- Employees are entitled to mandatory/statutory benefits/contributions (SSS, Philhealth, Pagibig, 13th month pay) regardless of employment status, e.g., proby, project-based, etc.
- Statutory contributions and deductions are remitted on a monthly basis to the respective government agencies.
- Final pay for separated employees is released within 30 days from the effective date of separation or approval of clearance whichever comes later.
- Certificate of Employment (COE) is released within 3 days from request.
What is the Normal Salary Structure in the Philippines?
A: The normal salary structure in the Philippines varies depending on the industry, job level, and location. However, there are some common features of salary structures in the country.
In general, salaries in the Philippines are structured on a fixed monthly gross compensation income, and are often based on a 40-hour workweek. Employers are mandated to provide statutory benefits which form part of the payroll computation, such as the pro-rata 13th Month Pay, Social Security System (SSS), PhilHealth, and Pag-IBIG contributions.
What is the Payroll Cost of Hiring Employees in the Philippines?
A: The payroll cost of hiring employees in the Philippines can vary depending on several factors such as industry, experience level, and location. However, in general, employers in the Philippines are required to pay at least the minimum wage set by the government, which varies by region and sector. In addition to the base salary, employers are also required to provide benefits such as statutory benefits and contributions. Other costs, such as training and development expenses, healthcare, relocation package, etc. may also factor into the total payroll cost of hiring employees in the Philippines.
What are the Annual Leave Policies in the Philippines?
A: In the Philippines, the annual leave policies for employees are governed by the Labor Code and the company’s internal policies. Generally, employees who have worked for at least one year are entitled to 5 days of annual service incentive leave (SIL), which can be used for rest, relaxation, and other personal pursuits. Employers may offer paid time-offs (PTOs) in lieu of the mandated 5 days SILe, which can range from 5 to 30 days depending on the company’s policies. The exact number of PTOs can be negotiated between the employer and employee. Employers may also offer other forms of leave, such as sick leave, emergency leave, and bereavement leave. It’s important for employees to familiarize themselves with their company’s specific leave policies and to communicate with their employer regarding their planned absences.
How many Public Holidays Can Employees take? Are these Paid holidays?
A: In the Philippines, there are at least 20 public holidays per year: 12 regular holidays and 8 special non-working days. These holidays are established by law and are observed throughout the country.
Employees are entitled to take these public holidays off, and they are paid for regular holidays. However, if employees are required to work on a regular holiday, they are entitled to receive an additional 100% of their regular daily rate.
On the other hand, if employees are required to work on a special non-working holiday, they are entitled to an additional 30% of their regular daily rate.
It’s important to note that while public holidays are observed throughout the country, some businesses may be exempt from observing certain holidays and may require their employees to report for work (with additional premium pay) on holidays due to operational needs.. Employers and employees should be familiar with the applicable laws and regulations regarding public holidays to ensure compliance.
How long will the project take to completely outsource our payroll?
If you have an existing payroll provider, it would depend on how soon the provider will be able to turn over the payroll documents. For FilePino, payroll computation will be provided within 2 business days upon receipt of the payroll information from the clients.
What kind of documents do I need to provide when availing payroll services in the Philippines?
A google sheet of relevant payroll information will be provided which the client needs to accomplish. There will also be a separate google sheet to be provided to indicate the payroll information per cut-off period, e.g., a summary of overtime hours and its classification, unpaid leaves/absences, additional remunerations, etc.
What is the 13th Month Pay?
In the Philippines, the 13th-month pay is mandatory and has to be paid out on or before December 24th or prior to the contract end date, it is equivalent to 1/12th of the employee’s total basic salary for the year..
What is the Annualization Report?
This is the computation of all employees’ income for the taxable year and computing for the adjusted tax due at the end of the year.