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Employ Candidates Compliantly in the Philippines

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  1. Overview: Philippines
  2. Global HR Compliance
  3. Global PEO and Payroll
  4. Work Permit for Hiring Expats via PEO
  5. Expand without a company set up
  6. Contractor vs. Employee: Which Is Better?
  7. Global Payroll Calculator
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Global Employer of Record (EOR) in the Philippines

Business operations in the Philippines can pose multiple challenges for international companies hoping to expand there. Express Global Employment provides a global employment solution for businesses like yours via our Global Employer of Record (EOR) in the Philippines to alleviate HR compliance risks and help you surmount any potential obstacles to your company’s global expansion.

What Is a Global Employer of Record?

A Global Employer of Record (Global EOR) is a third-party organisation that shoulders the legal and administrative responsibilities of hiring, employing, and managing staff on behalf of a client company. Unlike a standard Employer of Record, a Global EOR can operate across multiple countries, offering a unified solution for managing international employees.

This international talent engagement model is especially advantageous for companies expanding into new markets. Typically, such expansion would require establishing a local legal entity, a time-consuming process laden with bureaucratic hurdles. Global EOR circumvents this necessity. It allows companies to deploy staff in multiple jurisdictions without navigating the complexities of local employment laws, tax structures, and compliance norms. This streamlined approach eliminates the daunting upfront investment and operational costs of establishing a foreign subsidiary or business unit.

The flexibility of a Global EOR model makes it ideal for market testing and agile operations. Companies can quickly enter and exit markets, scaling their workforce up or down based on real-time needs and market conditions. Not only does this minimise risk, but it also preserves the company’s existing tax structure and corporate governance framework. The result is a more efficient, compliant, and strategic approach to international business expansion.

5 Global Employment Challenges a Global  EOR Can Help Address in the Philippines

1. Employment Taxes

There are many different types of taxes that businesses have to pay, but employment taxes are one of the most important and ever-evolving. These taxes can vary significantly from country to country and can be a large portion of a monthly salary. Not only are the rates different in each country and state, but the tax filing methods can be highly complicated. So it can be challenging to figure out how much you need to withhold from your employees and how much you owe in taxes in the Philippines.

2. In-country Employee Registration for Payroll in the Philippines

Managing payroll in different countries can be a complex and challenging task. Employees may need to be registered and taxed differently in each country, and there may be other laws that need to be followed. This can make it very hard to keep track of everything and ensure everything is done correctly. However, it is critical to ensure that employees are appropriately registered with the local authorities before they start work. Failing to do so can result in penalties for both the employee and the employer.

3. Local Payroll Calculations in the Philippines

Some countries have different rules when it comes to employment contracts. Understanding how payroll calculations work in your new country is essential to avoid surprises. In some cases, you may be responsible for paying your employees for the entire employment contract duration even if they are not performing as expected or you want to end their employment early. This can be a financial shock to foreign employers who are not used to this practice.

3. End of Financial Year Reporting in the Philippines

The financial year for many countries ends in March, and companies that have a presence in more than one country need to produce financial reports for each country and send it to the relevant government bodies. With the end of the financial year approaching, accountants are busy at work preparing reports, some of which can be complex and difficult to navigate through as they may be on foreign websites with little or no English language support. You must get these reports lodged on time as it could result in late payment penalties.

If your company plans to do business in multiple countries, clearly understanding each jurisdiction’s local employment and tax laws is essential. Compliance with these laws can be complex and time-consuming, so many businesses outsource payroll management and other HR functions to a Global Employer of Record. A reputable Global EOR will have experts on staff who are familiar with the specific requirements in each country where you plan to operate.

4. Local Employment Contracts Compliance

As an employer, you need to have local employment contracts that comply with the law of the jurisdiction where your employees work. These contracts should be provided in both English and the local language. Do not simply copy and paste your existing contract template from your home country – this could result in non-compliance and serious legal consequences.

When recruiting employees for your business, it is critical to ensure their employment contract is appropriate for the country where they will be working. The language of the employment contract is a crucial detail to remember during the recruitment process, as non-compliance to target country employment laws or any mistakes with the paperwork could cost you money, time, and potentially your business’s reputation.

5. Employment Contract Termination in the Philippines

The employment termination process can be just as necessary as the hiring process. This part of employment should not be taken lightly as it can have many implications and consequences, both for the employer and the employee. Therefore, it is essential to consider all aspects of the situation before deciding.

The start of termination process begins when the employee signs the employment contract. If the termination guidelines are clear and precise from the outset, then terminating an employee will be much smoother.

When setting out the terms of employment, you must be clear about the notice period (making sure it’s aligned with the country-specific regulations) and what is expected in terms of returning company equipment, knowledge transfer, and a credit card or cash float balance. Non-compete clauses protecting your intellectual property are also important considerations. Doing so will help avoid misunderstandings and potential legal problems down the road.

Global Employment Sevices by Employer of Record in the Philippines

Express Global Employment is a global Employer of Record that provides international employment services to companies with employees working in multiple countries, including the Philippines. We offer our clients a comprehensive service portfolio that includes the following.

  1. A single point of contact for all your cross-border payroll administration. A specialized employer organization (GEO) administers a local payroll through the EOR, which gives employees the confidence they will receive statutory employment benefits and protections. Local payroll management is one of the most challenging aspects of running any business, so it’s crucial to work with an experienced global EOR having expertise in global payroll.
  2. A Global Employer of Record ensures that the employment contract meets local labor law requirements. A Global EOR also works with employers to help them understand and comply with employment laws in different countries. The Global EOR also provides resources and training to employees on their rights and responsibilities under the contract.
  3. A Global Employer of Record ensures work permits and visa sponsorship for employees from other countries coming to the Philippines. This makes it possible for these workers to come to the employer’s country and work there for a set period.
  4. A Global Employer of Record guides clients on employment law matters such as notice, severance, termination, and statutory benefits.
  5. A Global Employer of Record provides communication and coordination between the EOR staff, client company, and employees through regional account managers in the Philippines, allowing for a more efficient and effective working relationship between all parties involved.
  6. A Global Employer of Record strives to create global pay strategies and structures that are fair and competitive. They consider many factors when setting pay levels, such as internal business needs and market rates. They also examine how local taxes and regulations can impact those rates to create a cohesive global model.
  7. A Global Employer of Record ) can help align HR programs with global function and business needs.
  8. Incorporation and payroll registration at the local level are essential. However, the associated costs and time investment required for skilled accounting and legal support can be prohibitive. A Global Employer of Record is the solution that helps you skip the costly and time-consuming tasks of local incorporation and registration. A global EOR ensures compliance without sacrificing flexibility or control of your foreign workforce.

Engaging the services of a global EOR (employer of Record) lets you offload compliance-related concerns and skip the hassle of incorporation.

Skip the paperwork, and skip the hassle. Stop worrying about complex tax rules and legal issues your business faces. Let us help you enter foreign markets with just one payment.

Share your project details with us here, and we will be happy to employ your selected international workforce on your behalf in the Philippines in a fast and cost-effective way.

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Why Local Entity Establishment Isn’t the Best Way to Expand Globally

One of the most significant advantages of partnering with a Global EOR is eliminating the need for setting up a legal entity in the Philippines. This process can be costly, time-consuming, and fraught with challenges. A Global EOR allows businesses to bypass this hurdle, saving resources that can be better utilised for strategic growth and business development.

Choosing a Global EOR is a strategic imperative for businesses contemplating expansion into the Philippines. It offers a simpler, faster, and more efficient alternative to establishing a legal entity, allowing companies to focus on their core operations with the assurance that their legal, HR, and tax compliance in the Philippines is in expert hands. It’s a more intelligent choice for global expansion into the Philippines.

Cost, Time, and Capital-Consuming

Establishing a local entity involves a significant financial investment and time commitment. The process can be cumbersome and capital-intensive, from navigating regulatory approvals to setting up compliant business practices. Not to mention the additional costs that can accrue from legal advice, accounting services, and human resources management. All these commitments can strain your financial resources and divert attention from your core business operations.

Challenging to Divest

If you’re merely testing the waters in a new market, a local entity can quickly become a liability rather than an asset. Winding down a legal entity can be as complex and time-consuming as setting one up, involving bureaucratic hurdles, asset liquidation, and potential severance pay. Plus, there are costs associated with dissolving the business, including legal fees and financial penalties for early termination of contracts or leases. The process can be draining and disruptive, with lingering financial and reputational risks.

Regulatory & Compliance Burden

Operating a local entity means continuously adhering to local laws and regulations, which can vary significantly from one jurisdiction to another. Non-compliance could result in substantial fines, legal repercussions, or irreparable damage to your brand’s reputation. Moreover, the need to continuously monitor legal changes adds a layer of complexity and risk. Keeping abreast of all these regulations often requires specialised knowledge and can consume valuable time and resources that could be better invested in growth activities.

Why Partnering with a Global EOR is a Risk-free and Lightweight Alternative to Entity Establismnent

Partnering with a Global Employer of Record (EOR) like Express Global Employment offers a streamlined, cost-effective alternative to establishing a local entity. A Global EOR absorbs the complexities of employment, from compliance to payroll, freeing you to focus on your core business activities.

Leveraging Global EOR’s established infrastructure can considerably expedite your time-to-market, allowing for agile responses to market dynamics without the risks tied to long-term investment.

The ability to rapidly scale up or down offers flexibility, which is especially valuable when testing new markets. It eliminates the need to invest heavily in an unproven market, mitigating financial risks and potential losses.

Global EOR (Employer of Record) Services: Save Up to 75-80% of Employee Management Cost

Average Cost & Time Our Solution *
Time to Market 10+ weeks 72 hours
Legal Advisors Fees $ 10 000 + ………….
Official Employment & Benefits $ 20 000 + ………….
Incorporation & Liquidation Costs $ 11 000 + ………….
Bank Account Setup $ 2 000 + ………….
Maintenance costs, in-house staff to manage the foreign entity, payroll, and administration. $ 25 000+ ………….
The approximate total cost of new market entry** $ 74 000 + $ 15 000

* Per one Employee
** Costs vary from country to country

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Global Payroll Calculator: Accurate Global Employment Cost Estimation

When hiring employees and contractors across the globe, you may not be choosing the most cost-effective and business-friendly country.

  • Do you know which country is the most cost-effective place to hire employees? 
  • What are the costs of entity establishment and legal representation?
  • What are the payroll costs and management fees?
  • What are your ongoing annual tax compliance costs?
  • Are you fully aware of banking implications?
  • Did you know that labour laws and hidden costs could make your company less efficient when choosing a country to run your business? 
  • Did you know that there could be a more cost-effective country to hire employees in and save up to 50%?

Countries have different labour laws, compliance, and tax regulations. What if, instead of limiting your company’s international expansion by cutting through the jungle of local regulatory compliance, tax, labour, and immigration requirements, you could have all the information of 190 countries at your fingertips?

Express Global Employment offers the Global Payroll Calculator to help businesses understand the compliance requirements for conducting business in a new country. Express Global Employment’s research team tracks developments in 190 countries around the globe. It provides up-to-date data on local regulations related to tax, payroll regulations, benefits, hiring practices, compliance requirements, and other labour-related factors that impact an employer’s bottom line. This valuable information makes the Global Payroll Calculator an invaluable tool for businesses looking to expand internationally.

Global Payroll Calculator helps companies reduce labour costs by providing up-to-date information on hiring, compensation, and tax requirements. It is also an ideal tool for quickly locating employees in any country.

How Global Payroll Calculator Can Help You Gauge Cost-of-Hire Worldwide

  • Quickly estimate global employment & payroll costs from your desk in real-time.​​
  • Empower your teams with advanced functionality to make better and faster hiring decisions.​​
  • Determine the most cost-effective countries and adjust your employment budget accordingly.​​
  • Budget your global expansion moves accurately in real-time. GPC has done the global payroll and tax math and compliance for you.​​
  • Calculate and compare total employment costs in 190 countries.​​
  • Estimate costs for a local and foreign workforce.​​
  • Remove inaccurate manual calculations from your payroll, and cut payroll budgeting time.​​
  • Get instant detailed breakdowns of in-country taxes, contributions, and statutory benefits.​​
  • Eliminate inaccuracies, and save time and money that would otherwise be spent on manual calculations or waiting for quotes from local providers. ​​
  • Get complete quotes for a comparison of 190 countries in one click.​​
  • Achieve 100% global employment compliance.​​

Spotlight on the Philippines

  • Location: The Republic of the Philippines is an archipelago of over 7000 Southeast Asian islands. The country shares maritime borders with Japan, Taiwan, Indonesia, Vietnam, and China.
  • Capital: Manilla, the capital of the Philippines, is one of the most densely populated cities in the world.
  • Population: As of 2020, the population of the Philippines was around 109,000,000, making it the 12th most populous nation in the world. About 43% of the population is under age 20, making the Philippines population among the youngest in the world.
  • Language: The official languages of the Philippine Republic are Filipino and English. Filipino, a version of Tagalog, is mostly spoken in Manilla. Both languages are used in business and government, making the Philippines an ideal location in Southeast Asia for English-speaking enterprises.
  • Labour Force: The labour force in the Philippines is currently estimated to be around 44 million.
  • Currency: The official currency of the Philippines is the peso (PHP), currently worth about 0.02 USD. Filipino workers are paid in PHP.
  • Minimum Wage: The minimum wage in the Philippines varies by region and is set by regional wage boards. The current annual minimum wage is USD 2,053, ranking the Philippines 75th out of 197 nations globally. Failure of businesses to comply with minimum wage standards can result in severe penalties.
  • World Bank Ease of Doing Business Rating: The most recent Ease of Doing Business Report ranks the Philippines at 95th out of 190 global economies.
  • Global Marketplace Position: Since 2012, the Philippines has had one of the world’s fastest-growing economies, with a projected 2021 GDP of more than one trillion dollars, elevating the country’s position to 27th in the world.
  • Developing Industries: The most promising growth industries in the Philippines are manufacturing, mining and mineral processing, pharmaceuticals, shipbuilding, electronics, and semiconductors.
  • Prime Trading Partners: The main trading partners of the Philippines Republic are the United States, Japan, China, Singapore, South Korea, the Netherlands, Hong Kong, Germany, Taiwan, and Thailand.

All-In-One Global Employment Solution in the Philippines

Employing globally is no longer a maze of local setups and legal hurdles. With Express Global Employment, you can build a global team seamlessly. Benefit from our comprehensive, compliant, and efficient global employment solutions that eliminate the complexity of international hiring. From contract generation to seamless integration, we ensure that your expansion is as limitless as your ambition.

Global Mobility Support

Our global mobility support is about turning complexity into simplicity. We expedite onboarding and immigration procedures, ensuring your global talent is ready to engage and deliver results swiftly. By eliminating red tape and administrative burdens, your team can focus on what they do best, propelling your business forward in every corner of the globe.

Global Payroll & Benefits, Handled

Financial well-being is critical to employee satisfaction. That’s why we navigate the intricacies of international payroll and benefits with expertise. Our solutions offer your workforce a competitive and fully compliant financial package, wherever they may be. With Express Global Employment, you can assure your team that their compensation is globally competitive wherever they are.

Borderless Expansion, No Entity Needed

Launch your workforce in 190 countries without the burden of establishing local entities. Our all-in-one global employment solution allows quick, compliant onboarding and talent management. You can immediately scale up your operations and seize international opportunities with Express Global Employment as your guide.

New Markets. Zero Risks.

Expanding your business’s horizons should not multiply its risks. Protect your global ventures from compliance pitfalls with our expert guidance. We manage the complexities of employee classification and permanent establishment risks, ensuring that your expansion is secure and strategically sound. With us, new markets mean new opportunities, not new worries.

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