Complete Guide to Payroll and Compliance for Remote Teams in the Philippines

Hiring remote talent in the Philippines presents an attractive opportunity for businesses to access skilled professionals at a competitive cost. However, managing payroll and legal compliance in a foreign country can be challenging, especially with intricate local regulations. Non-compliance can expose businesses to penalties, fines, or even disputes with employees.

This guide helps startups and global companies understand the key payroll and compliance requirements when hiring remote teams in the Philippines. It also explores EOR (Employer of Record) services as a solution to simplify the process, ensuring that businesses can hire confidently and stay compliant.

Payroll and Compliance Requirements in the Philippines

In the Philippines, both local and foreign employers must comply with several payroll and legal requirements, even if they don’t have a physical office in the country. Here's what you need to know:

13th-Month Pay

• What it is: A government-mandated bonus equal to one-twelfth of an employee’s annual salary.
• When it’s paid: The 13th-month pay must be distributed no later than December 24 each year.
• Why it matters: It’s non-negotiable and a legal obligation under Philippine labor law.

Government Contributions

Employers must register with the following government programs and contribute based on the employee’s salary bracket:

• SSS (Social Security System)
• PhilHealth (health insurance)
• Pag-IBIG Fund (housing savings program)

Employers match the employee’s contributions, and the contribution rates vary depending on the gross salary of the employee. It's essential to stay on top of these contributions to avoid penalties.

Tax Compliance for Foreign Companies

Even without a local entity, foreign employers must:

• Withhold and remit monthly income taxes
• File monthly tax reports to the BIR
• Issue annual tax certificates
• Report all contributions to SSS, PhilHealth, and Pag-IBIG

Failure to comply with these requirements could result in legal disputes or fines.

Why EOR Services Simplify Payroll and Compliance

Setting up a legal entity in the Philippines to handle payroll and compliance can be costly and time-consuming. An Employer of Record (EOR) like Simply Source can act as the legal employer on your behalf, allowing you to focus on managing daily operations while they handle payroll, taxes, and compliance.

With Simply Source, you get the following benefits:

• On-time salary payments
• Pay slip generation and clear breakdowns
• Automated tax and contribution filing
• Updates when laws change
• Local HR and legal support

How Simply Source Simplifies Payroll for Remote Teams

Managing remote team payroll doesn’t need to be complicated. Simply Source offers a global payroll system that handles everything, ensuring your remote team is paid accurately, on time, and in full compliance with local laws.

Here’s how we make payroll easy:

• Transparent salary and deduction tracking
• Compliance with bonuses, separation pay, and more
• End-to-end HR and audit support
• Fast setup for startups scaling in Southeast Asia

Get Started with Simply Source

Managing payroll and compliance in the Philippines doesn’t have to be complicated. With Simply Source's EOR and payroll services, your remote team is paid accurately, on time, and in full compliance with local laws. Visit Simply Source and start hiring smarter today.