Employer of Record Philippines – How to Hire Legally Without a Local Entity

The Philippines is one of the world’s top destinations for outsourcing and remote staffing — thanks to its highly skilled, English-speaking workforce and cost-efficient labor market.

But if your company doesn’t have a legal entity in the Philippines, hiring full-time employees directly can expose you to serious legal and tax risks.

That’s where an Employer of Record (EOR) comes in.

An Employer of Record in the Philippines allows you to:

• Hire employees legally
• Stay compliant with labor laws and tax codes
• Offer benefits like SSS, PhilHealth, PAG-IBIG, and 13th-month pay
• Onboard staff in days — without opening a local office

In this guide, we’ll explain:

• What an EOR is and how it works in the Philippines
• Why companies use EORs instead of contractors or subsidiaries
• Legal requirements, benefits, and costs
• Why Simply Source is the trusted EOR partner in the Philippines

What Is an Employer of Record (EOR) in the Philippines?

An Employer of Record (EOR) is a third-party organization that legally employs your workers in the Philippines on your behalf.

While you manage the day-to-day work, the EOR is responsible for:

• Drafting and issuing compliant employment contracts
• Processing payroll and withholding taxes
• Providing statutory benefits (SSS, PhilHealth, PAG-IBIG)
• Ensuring full compliance with Philippine labor laws
• Handling terminations, final pay, and legal protections

With an EOR, you can hire Filipino talent without opening a local corporation or PEZA-registered entity.

Key Roles of an EOR in the Philippines

Result: You stay in control of your remote team while the EOR takes care of all legal, tax, and HR obligations.

Why Use an EOR Instead of Direct Hiring or Contractors?

Hiring talent in the Philippines without an entity can be risky — especially if you misclassify employees as independent contractors or fail to comply with local laws.

Here’s why using an EOR in the Philippines is the smarter, safer option:

Avoid Contractor Misclassification

If you:

• Assign set work hours
• Require daily reporting or tool usage
• Provide consistent, ongoing work
• Expect exclusivity or long-term service

Then under Philippine labor law, your “contractor” may legally be an employee — even if you signed a freelance agreement. This exposes you to:

• Back payment of benefits and taxes
• Labor complaints or penalties
• Risk of contract invalidation or IP loss

EOR = Legal employment without legal risk.

Eliminate the Need for a Local Entity

Setting up a Philippine corporation or PEZA-registered office can take 3–6 months and cost $10,000+ in legal, admin, and setup fees.

An EOR removes that barrier:

• No local registration needed
• No in-house HR or legal team required
• Hire in 7–10 days, not months

Offer Competitive Benefits and Retain Talent

Filipino professionals expect:

• 13th-month pay
• SSS, PhilHealth, and PAG-IBIG contributions
• Paid leaves and official holidays
• Statutory termination protection and severance (if applicable)

Only an EOR can legally and efficiently manage this on your behalf.

Stay Compliant with DOLE and Tax Rules

The Department of Labor and Employment (DOLE) enforces strict labor rules. Violations can lead to:

• Labor disputes and mediation
• Back wages and fines
• Suspension of local operations

An EOR ensures every hire meets DOLE and BIR compliance from day one.

What an EOR in the Philippines Actually Handles

A legitimate Employer of Record in the Philippines does far more than just issue paychecks. It functions as your fully legal local employer, assuming all risk and responsibility so you can focus on managing your remote team.

Here’s what’s included:

Employment Contracts & Legal Registration

The EOR:

• Drafts country-specific, DOLE-compliant contracts
• Ensures language, terms, and benefits follow Philippine labor law
• Manages contract amendments, renewals, or terminations
• Registers your employees with relevant government agencies

Payroll, Taxes, and Government Contributions

Each month, the EOR:

• Processes salaries in Philippine Peso (PHP)
• Calculates and withholds correct income taxes
• Remits contributions to:
  
  • SSS (Social Security System)
  • PhilHealth (Health Insurance)
  • PAG-IBIG (Housing Fund)
• Provides payslips and tax forms

Fully BIR-compliant — with end-of-year income reporting handled for you.

Statutory Benefits Administration

The EOR ensures employees receive:

• 13th-month pay
• Paid vacation and sick leave
• Maternity/Paternity leave (as mandated)
• Access to social benefit claims through SSS, PhilHealth, etc.

This keeps your team motivated and retention high.

Local HR and Termination Support

The EOR also manages:

• Performance-related documentation
• HR inquiries and employee relations
• Legal offboarding, final pay, and exit interviews
• Compliance with termination notice periods and severance

You stay protected, even if things don’t go as planned.

How to Choose the Right EOR in the Philippines

Not all EOR providers are equal. To hire safely and build long-term success in the Philippines, you need an EOR partner that combines legal accuracy, transparent pricing, and local HR expertise.

Here’s how to evaluate them:

Ask These Questions

• Are you registered to operate in the Philippines legally?
• How do you ensure compliance with DOLE and BIR requirements?
• What’s included in your monthly fee (payroll, benefits, onboarding, etc.)?
• Can I see a sample employment contract?
• Do you handle final pay and offboarding in case of termination?
• How fast can you onboard a new hire?

What to Look For

Red Flags to Avoid

🚫 Vague contracts with no mention of SSS/PhilHealth/PAG-IBIG
🚫 Unlicensed subcontractors posing as EORs
🚫 “Freelancer-style” setups that leave you liable
🚫 Poor response times or no dedicated HR contact
🚫 Price-percentage models with unclear cost breakdowns

Choose a provider like Simply Source, which delivers a fully compliant EOR solution — with payroll, contracts, and benefits all in one monthly invoice.

Why Simply Source Is the Trusted EOR Partner in the Philippines

At Simply Source, we specialize in helping global companies hire remote employees in the Philippines — legally, quickly, and without the hassle of setting up a local entity.

Here’s what makes our EOR service different:

Full Legal Compliance from Day One

We handle:

• Government registration (SSS, PhilHealth, PAG-IBIG)
• DOLE-compliant contracts
• Monthly payroll and tax withholdings
• 13th-month pay and statutory benefits
• Offboarding and termination documentation

All employees are legally employed under Philippine law — with zero misclassification risk to you.

Fast Onboarding and Scalable Hiring

• Onboard in 7–10 business days
• Hire as few as 1 employee, or scale a full team
• Ready-to-deploy templates and workflows
• Pre-vetted candidate support (if needed)

Transparent, All-Inclusive Pricing

• No hidden fees
• No percentage markups
• One flat monthly rate that includes:
  
  • Employee salary
  • All government contributions
  • Payroll, contracts, and HR support

Predictable costs, with full legal peace of mind.

Dedicated HR Support in the Philippines

• Employees have access to local HR contacts
• Guidance on leave, benefits, and compliance
• You get a dedicated account manager to coordinate everything

Hire Legally in the Philippines — Without the Red Tape

If you’re ready to grow your team and need a fast, compliant hiring solution, Simply Source is your trusted Employer of Record in the Philippines.

• Legally hire full-time staff
• Stay 100% compliant with DOLE and BIR
• Scale without setting up a local entity
• Flat pricing with full-service support

Book your free consultation and start hiring in the Philippines the smart, compliant way — with Simply Source.

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References

Labor Code and Legal Employment in the Philippines

• Department of Labor and Employment (DOLE)
  https://www.dole.gov.ph

13th-Month Pay and Statutory Labor Benefits

• Presidential Decree No. 851 – 13th Month Pay Law
  https://www.officialgazette.gov.ph/1975/12/16/presidential-decree-no-851-s-1975/

Government-Mandated Contributions

• Social Security System (SSS): https://www.sss.gov.ph
• PhilHealth: https://www.philhealth.gov.ph
• PAG-IBIG Fund: https://www.pagibigfund.gov.ph

Employer of Record Explained

• Papaya Global – What Is an EOR?
  https://www.papayaglobal.com/blog/employer-of-record-in-the-philippines

Contractor Misclassification Risks

• Velocity Global – Contractor vs. Employee Compliance Risks
  https://velocityglobal.com/resources/contractor-vs-employee

Hiring and Onboarding Speed Benchmarks

• Hubstaff – Remote Team Hiring Trends
  https://blog.hubstaff.com/remote-hiring-statistics/

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