Employee Benefits in the Philippines: What Global Employers Need to Know in 2025
Hiring in the Philippines gives employers access to a large, English-speaking workforce with strong service and tech capabilities. However, to stay compliant and competitive, employers need to understand the mandatory employee benefits in the Philippines—and what additional perks and programs help retain top talent.
From government-mandated healthcare and retirement systems like PhilHealth, SSS, and Pag-IBIG, to cultural expectations like 13th month pay, the Filipino employee benefits landscape is deeply shaped by national labor laws and collective norms.
In this guide, we’ll cover:
- Who qualifies for mandatory benefits in the Philippines
- Statutory employee benefits every employer must provide
- Paid time off and leave entitlements under labor law
- Popular additional benefits and perks
- What benefits attract and retain Filipino workers
- How to set up and manage benefits locally or through an EOR
Whether you're setting up a local entity or working with an Employer of Record, this guide will help you deliver a competitive and compliant benefits package.
Who Qualifies for Statutory Benefits in the Philippines
Employee classification in the Philippines directly affects eligibility for benefits under the Labor Code of the Philippines. Most benefits apply to:
Eligible Workers
- Full-time employees (private sector)
- Regular and probationary employees
- Part-time workers (with pro-rated benefits)
- Female employees (including maternity protections)
Workers Not Covered
- Independent contractors and freelancers
- Short-term casual hires under 6 months
- Self-employed individuals (unless voluntarily contributing to systems like SSS or PhilHealth)
In the Philippines, many benefits are handled by state-run systems. It’s vital to determine employment status early to ensure correct enrolment and contributions.
Statutory Employee Benefits in the Philippines
Employers in the Philippines must provide a set of mandatory employee benefits governed by the Labor Code of the Philippines, along with contributions to government-run insurance and retirement systems. These statutory benefits apply across industries and are critical for compliance.
Social Security System (SSS)
SSS is the Philippines' public retirement and disability fund. It covers retirement benefits, disability benefits, funeral assistance, sickness benefits, and more. Employers contribute 8.5% of the employee’s monthly salary, while employees contribute 4.5%. These rates are updated periodically and remitted monthly.
PhilHealth
The Philippine Health Insurance Corporation (PhilHealth) provides universal health coverage, including inpatient and outpatient care. The standard contribution rate is 4% of the employee's monthly salary, shared equally between employer and employee. Benefits include room and board, medicines, and professional fees.
Pag-IBIG Fund (HDMF)
The Home Development Mutual Fund (Pag-IBIG) provides savings, housing loans, and provident benefits. Employers and employees typically contribute 2% of the employee’s monthly salary. Employees can apply for low-interest housing or calamity loans through the fund.
13th Month Pay
All rank-and-file employees who have worked at least one month during the calendar year are entitled to a 13th month salary, equal to 1/12 of their total basic salary earned within the year. This must be paid no later than December 24 each year.
Employees’ Compensation (EC) Program
This provides additional compensation to employees or their beneficiaries in case of work-related sickness, injury, disability, or death. The employer contributes PHP 10–30 monthly per employee, depending on salary bracket.
Maternity and Paternity Leave
Female employees are entitled to 105 days of paid maternity leave with an optional 30-day extension (unpaid). Solo mothers get an additional 15 days. Fathers are entitled to 7 days of paid paternity leave under current law.
Employers sometimes underestimate the importance of contributions to Pag-IBIG or PhilHealth, but these aren’t optional. Failure to contribute correctly can result in penalties and issues for the employee accessing healthcare or housing support.
Leave Entitlements in the Philippines
The Labor Code of the Philippines outlines several leave entitlements designed to support employee wellbeing, health, and family obligations. These leave benefits are widely expected and must be administered properly to remain compliant.
Service Incentive Leave (SIL)
Employees who have rendered at least one year of service are entitled to five days of paid Service Incentive Leave annually. This applies to most employees in the private sector and can be used for vacation or sick leave purposes.
Sick Leave
There is no mandated number of sick leave days beyond the five-day SIL. However, many companies voluntarily offer additional paid sick leave as part of their benefits package, especially to promote employee wellness and minimize presenteeism.
Vacation Leave
Again, while not mandated beyond the five-day SIL, many employers in the Philippines provide additional paid vacation leave to attract and retain employees. This can range from 10 to 20 days per year, often increasing based on tenure or level.
Maternity Leave
As mandated by the Expanded Maternity Leave Law, female employees are entitled to 105 days of paid maternity leave, with an additional 15 days for solo parents and an optional 30-day extension without pay. This benefit is funded through the SSS and administered by employers.
Paternity Leave
Fathers are entitled to seven days of paid paternity leave for the first four deliveries of their legitimate spouse. Employers pay the full amount.
Special Leave for Women
Female employees may also apply for up to 60 days of paid special leave for gynecological surgery under RA 9710 (Magna Carta of Women).
Parental Leave for Solo Parents
Solo parents are entitled to an additional seven days of paid parental leave each year, under the Solo Parents’ Welfare Act.
Bereavement Leave
Bereavement or compassionate leave is not mandated by law, but many Filipino companies offer 3–5 days of paid leave for the death of an immediate family member as part of their standard benefits program.
Regular Holidays and Special Non-Working Days
Employees are entitled to 12 regular holidays per year and several special non-working days. Workers receive 100% of their daily rate on regular holidays, and up to 130% if they work on those days.
Employers who provide expanded sick leave or special parental leave tend to see lower attrition and higher employee satisfaction—especially among young families.
Common and Additional Employee Benefits in the Philippines
To remain competitive in the Philippine job market, leading employers often offer optional competitive benefits beyond legal requirements. These perks enhance employee satisfaction, boost retention, and reflect a people-first workplace culture.
Private Health Insurance
Although PhilHealth offers basic national health insurance, many companies provide private health insurance to cover more extensive inpatient, outpatient, and dental services. This often includes coverage for dependents, faster access to care, and higher benefit ceilings.
Life Insurance & Group Coverage
Many companies offer group life insurance plans that provide lump sum payouts in the event of death or total disability. This helps employees secure their families’ future and is viewed as a top-tier retention benefit.
Rice Subsidies or Grocery Allowances
Rice subsidies or grocery cards are culturally significant perks in the Philippines. These monthly allowances, often valued at PHP 1,000–2,000, offer tangible support for daily needs.
Transportation & Night Shift Allowances
Night shift differentials are legally mandated for employees working between 10 PM and 6 AM. Many companies also provide transportation support or shuttle services, especially in BPO and healthcare sectors.
Wellness & Mental Health Support
Perks such as wellness stipends, mental health consultations, EAPs (Employee Assistance Programs), or gym subsidies are gaining traction. These support employee wellbeing and help reduce burnout.
Education & Tuition Assistance
Some employers offer scholarships, tuition reimbursement, or educational loans for employees or their dependents. These are especially common in multinational firms and are linked to long-term career growth.
Offering medical insurance for dependents, wellness programs, and lifestyle perks makes a significant difference in recruitment—especially when salaries are near market average.
Benefits That Attract Top Talent in the Philippines
In a market where top talent is increasingly discerning, offering additional, human-centered benefits can help employers stand out. Filipino workers value stability, healthcare access, and work-life balance—so the best benefits packages reflect these needs.
Flexible Work Arrangements
Remote work, hybrid setups, and flexible hours are increasingly popular—especially in IT, BPO, and creative industries. Offering flexibility improves employee wellbeing and expands access to talent outside urban centers.
Wellness Programs
Programs that promote mental and physical wellness—such as counseling, meditation apps, or gym memberships—are seen as essential by many Filipino professionals. These support productivity and reduce absenteeism.
Financial Assistance & Emergency Loans
Some companies offer short-term loans or salary advances to help employees manage emergencies. Others provide access to low-interest credit unions or financial literacy workshops.
Career Development Opportunities
Top employers invest in training, certifications, and cross-training programs. Career mobility is highly valued by Filipino employees, especially younger professionals.
Incentives & Retention Bonuses
Retention incentives, milestone rewards, and performance bonuses can help companies reduce attrition and show appreciation.
Dependents' Benefits
Extending health or education benefits to family members—including children or spouses—can differentiate a company from others that only cover employees.
What keeps Filipino talent long-term isn’t just salary—it’s the full package: good leadership, clear growth plans, and benefits that take care of their families.
How to Set Up and Manage Benefits Effectively in the Philippines
Whether you’re opening an office in Manila or hiring remote Filipino employees, you’ll need to navigate employee expectations around benefits. Here’s some local challenges and compliance tips on how to manage benefits locally or through an Employer of Record (EOR).
1. Learn the Local Labor Code
Familiarize yourself with the Labor Code of the Philippines, which outlines mandatory benefits, minimum wage laws, and termination protocols. You’ll also need to stay current with contribution rate changes for SSS, PhilHealth, and Pag-IBIG.
2. Register With Government Agencies
Before you can onboard employees, you’ll need to register your company with:
- SSS: for social security and disability
- PhilHealth: for national health insurance
- Pag-IBIG: for housing and provident fund contributions
3. Set Up Payroll and Monthly Contributions
Employers must calculate, deduct, and remit government contributions each month. This includes both employee and employer shares for SSS, PhilHealth, and Pag-IBIG.
4. Create Clear Leave and Benefits Policies
Document your leave policies and additional benefits clearly. Share these policies in your employee handbook or offer letters, ensuring transparency and compliance with labor standards.
5. Consider an Employer of Record (EOR)
If you’re hiring Filipino employees without a local entity, an Employer of Record in the Philippines can manage payroll, taxes, and benefits on your behalf—ensuring compliance while accelerating market entry.
One of the most common mistakes I see is underestimating the administrative burden of statutory benefits in the Philippines. Working with a local payroll provider or EOR is often the most efficient path for compliance.
Get Support Setting Up Employee Benefits in the Philippines
Navigating Filipino labor laws, payroll deductions, and leave entitlements can be complex—but getting employee benefits right is a powerful way to support your team, improve retention, and grow your business in the Philippines.
Explore our guide to top Employer of Record (EOR) services in the Philippines to start building your benefits program with confidence.
10 Best Filipino Employer of Record Services Shortlist
Here's my pick of the 10 best software from the 10 tools reviewed.
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