In 2025, employee benefits in the Philippines remain central to compliance, retention, and talent competitiveness. The country’s employment system is shaped by the Philippine Labor Code, mandatory contributions to government-run social insurance schemes, and additional benefits mandated by legislation such as the 13th-month pay law. For global employers, providing compliant benefits is not just attractive — it is legally required.
Philippine law sets the framework for statutory entitlements, while many employers add voluntary perks to attract top talent in industries like IT, BPO, and professional services. However, compliance can be challenging for foreign companies without a local entity. That’s where Employer of Record (EOR) services in the Philippines simplify payroll, contributions, and benefits administration.
This guide explains everything global employers need to know about employee benefits in the Philippines in 2025, including statutory entitlements, voluntary perks, compliance risks, and how an EOR can help.
Table of Contents
- What Are Employee Benefits in the Philippines?
- Types of Employee Benefits in the Philippines
- Emerging Benefit Trends for 2025
- Steps to Launch Employee Benefits in the Philippines
- Estimated Timeline to Implement Benefits
- Legal Framework Governing Benefits in the Philippines
- Key Compliance Challenges for Employers in the Philippines
- How Asanify Supports Employers in the Philippines
- FAQs on Employee Benefits in the Philippines
What Are Employee Benefits in the Philippines?
Employee benefits in the Philippines refer to non-wage compensation provided to workers, from statutory benefits mandated by law to voluntary perks that employers add to improve employee satisfaction.
For employers, these benefits ensure compliance with the Philippines’s Labor Code and government mandates. For employees, they provide financial protection, healthcare, and work-life balance.
Payroll processing plays a central role, as employers must withhold contributions and taxes accurately and remit them to government agencies.
Examples of employee benefits in the Philippines include:
- 13th-month pay (mandatory)
- Social Security System (SSS) contributions
- PhilHealth and Pag-IBIG Fund contributions
- Paid leave entitlements
Types of Employee Benefits in the Philippines
The Philippines has one of the most structured employee benefits systems in Southeast Asia, combining legally mandated entitlements with voluntary perks that employers provide to remain competitive. Below we break down the key categories.
Statutory Entitlements
By law, Philippine employers must provide a range of benefits that ensure employee financial security, health protection, and work-life balance. These include:
13th-Month Pay
Mandatory under Presidential Decree 851, employees must receive an additional one month’s salary, paid no later than December 24 each year.
Paid Leave
- Service Incentive Leave (SIL): At least 5 days annually for employees with one year of service.
- Maternity Leave: 105 days of paid leave, with an additional 15 days for solo parents.
- Paternity Leave: 7 days for married male employees.
- Parental Leave for Solo Parents: 7 additional days.
Social Security System (SSS)
Employers must contribute a share of employees’ salaries to the SSS, which covers retirement, sickness, maternity, disability, and death benefits.
PhilHealth
Employers contribute to the national health insurance system, which provides access to subsidised medical care and hospitalisation.
Pag-IBIG Fund
Employers contribute to the Pag-IBIG Fund, which offers savings programs, housing loans, and other financial support for employees.
Overtime, Night Shift, and Holiday Pay
Employees must receive premium pay rates for overtime work, night shifts, and work performed on public holidays under the Labor Code.
Compliance Reminder: Employers must register with SSS, PhilHealth, and Pag-IBIG, and remit contributions on time to avoid penalties.
Suggested Read: Employer of Record Philippines: A Comprehensive Guide 2025
Common Voluntary Perks
Beyond the statutory framework, many Philippine employers enhance their compensation packages with voluntary benefits. These perks are especially common in industries such as IT, BPO, and finance.
Some of the most common voluntary benefits include:
- Private health insurance to supplement PhilHealth coverage.
- Life and accident insurance.
- Meal and transportation allowances.
- Flexible working arrangements for hybrid and remote setups.
- Training and upskilling programs, including language and professional certifications.
- Wellness initiatives such as gym memberships, counselling, and stress management support.
- Performance bonuses and equity incentives in multinational and startup environments.
These voluntary perks help employers attract and retain talent in the Philippines’ highly competitive labour market.
Global Contractor Management and Benefits
Independent contractors in the Philippines are not covered by statutory employee benefits such as SSS, PhilHealth, or Pag-IBIG. They are responsible for making their own contributions and tax filings.
For global employers, this creates two key challenges:
- Misclassification Risks – The Department of Labor and Employment (DOLE) strictly monitors the distinction between contractors and employees. Misclassification can lead to fines, back pay, and compliance liabilities.
- Limited Benefits Offering – Contractors cannot access employer-provided perks unless they are engaged as employees.
Solution: Partnering with an Employer of Record (EOR) in the Philippines enables global companies to hire contractors as employees when necessary, ensuring fair access to statutory and voluntary benefits while mitigating compliance risks.
Emerging Benefit Trends for 2025
The Philippines is adapting its benefits landscape to global HR standards and workforce expectations. Key trends include:
- Mental health programs – Employers are offering counselling, stress management, and Employee Assistance Programs (EAPs).
- Remote work allowances – Stipends for internet, electricity, and home office equipment for hybrid workers.
- Enhanced parental support – Some employers extend paternity leave, offer childcare stipends, or provide flexible hours for parents.
- Financial wellbeing programs – Companies are adding voluntary retirement savings, investment workshops, and emergency loan support.
- Flexible cafeteria-style perks – Employees can choose between health insurance upgrades, extra leave, or training support.
- Digital HR and benefits platforms – Employers use HR tech to personalise benefits and improve compliance tracking.
Partnering with an EOR in the Philippines enables global companies to roll out these perks quickly and compliantly.
Steps to Launch Employee Benefits in the Philippines
Rolling out benefits in the Philippines requires careful planning and compliance with national labour laws and government agency rules.
Define Your Benefits Strategy
- Align with company goals and Philippine workforce needs.
- Benchmark against industry standards, especially in BPO and IT.
- Balance statutory entitlements with attractive voluntary perks.
Understand Compliance Rules
- Register with SSS, PhilHealth, and Pag-IBIG.
- Ensure correct payroll deductions and timely remittances.
- Avoid penalties for late payments or incorrect filings.
Partner with Local Experts
- Work with an EOR in the Philippines or HR outsourcing firm.
- Guarantee compliant onboarding, payroll, and benefits delivery.
- Reduce risks of contractor misclassification.
Estimated Timeline to Implement Benefits
| Implementation Step | In-House (Local Entity) | With EOR in the Philippines |
| Entity setup & registrations | 3–6 months | Not required |
| Payroll & contributions setup | 4–8 weeks | Immediate |
| Insurance & benefit enrolments | 4–8 weeks | 1–2 weeks |
| Full benefits rollout | 3–6 months | 2–3 weeks |
Partnering with an EOR in the Philippines significantly reduces setup time while ensuring compliance.
Legal Framework Governing Benefits in the Philippines
The Philippines’ benefit system is regulated through a combination of national labour laws and mandatory social security schemes.
Core Labour Framework and Institutions
- Labor Code of the Philippines – Governs working hours, wages, leave entitlements, and termination.
- Presidential Decree 851 – Mandates 13th-month pay.
- Social Security Act – Establishes SSS contributions and benefits.
- National Health Insurance Act – Establishes PhilHealth coverage.
- Home Development Mutual Fund Law – Creates the Pag-IBIG Fund for housing and savings.
- Department of Labor and Employment (DOLE) – Enforces compliance with labour laws.
Together, these laws and institutions create the foundation for statutory benefits like leave, 13th-month pay, and social insurance.
Key Compliance Challenges for Employers in the Philippines
Employers face several compliance risks when managing benefits in the Philippines:
- Misclassification of contractors and freelancers
- Errors in payroll and contribution remittances to SSS, PhilHealth, and Pag-IBIG
- Delays in paying 13th-month salary
- Incomplete overtime, holiday, or premium pay calculations
- Non-compliance with DOLE inspections and reporting
Partnering with an EOR in the Philippines reduces these risks by handling payroll, benefits, and reporting requirements.
Suggested Read: Understanding Labour Laws in the Philippines: Complete Guide
How Asanify Supports Employers in the Philippines
Managing employee benefits and compliance in the Philippines can be complex, but Asanify makes it simple. Through its EOR services in the Philippines, global companies can expand quickly while ensuring compliance with local laws and agency rules.
With Asanify, employers can:
- Onboard employees compliantly under Philippine labour law.
- Handle payroll and filings with SSS, PhilHealth, and Pag-IBIG.
- Guarantee statutory benefits including 13th-month pay, social security, and paid leave.
- Offer voluntary perks such as private health insurance, allowances, and wellness programs.
- Administer modern benefits like remote work stipends and flexible perks.
- Provide bilingual payslips in English and Filipino.
- Maintain compliance with DOLE rules and wage orders.
- Manage contractors compliantly by converting them into employees when needed.
By partnering with Asanify, global employers reduce compliance risks, accelerate hiring, and deliver a seamless benefits experience in the Philippines.
FAQs
13th-month pay, SSS, PhilHealth, Pag-IBIG, and service incentive leave.
It equals one-twelfth (1/12) of an employee’s total basic salary within a calendar year.
At least 5 service incentive leave days, plus maternity, paternity, and parental leave under various laws.
Around 8.5% of an employee’s monthly salary.
Employers and employees jointly contribute, and the scheme covers hospitalisation and medical expenses.
A mandatory savings and housing program funded through joint contributions by employers and employees.
No, but they may voluntarily enrol in SSS, PhilHealth, and Pag-IBIG. An EOR can reclassify them as employees to provide benefits.
Employers must file and remit monthly contributions to SSS, PhilHealth, and Pag-IBIG.
No, but many employers offer performance or holiday bonuses voluntarily.
An EOR ensures compliance with labour laws, manages payroll and benefits, and enables hiring without a local entity.
Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant or Labour Law expert for specific guidance.
