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Do You Want To Hire Remote Staff in the Philippines? How Do You Make Sure You Pay Them Legally?

By
Stephen Watts
Director
Published:
May 6, 2025

As more businesses turn to global talent to scale efficiently, the Philippines has become a go-to destination for remote hiring. The country offers a skilled, English-speaking workforce, efficiency advantages, and strong cultural compatibility with Western businesses.

However, if you're planning to hire remote staff in the Philippines, it's crucial to understand the legal and financial landscape. From compliance with local labor laws to navigating payroll and government contributions, there are a few key factors to get right especially if you don’t have a legal presence in the country.

Key Legal and Compliance Considerations

Hiring Filipino employees means following local employment regulations. Here’s what you need to be aware of:

1. Payroll and Tax Responsibilities

Like many countries, there are specific local laws that employers are required to meet. In the Philippines, these include:

  • Withholding income tax from salaries

  • Filing and remitting taxes to the Bureau of Internal Revenue (BIR)

  • Ensuring government-mandated contributions are deducted and submitted

Managing this correctly is essential for legal and operational peace of mind.

2. Philippine Labor Law Compliance

Employers must adhere to employment laws that cover:

  • Regional minimum wage requirements

  • Overtime pay and holiday compensation

  • Statutory benefits such as Social Security (SSS), PhilHealth, and Pag-IBIG

  • 13th-month pay (a legally required annual bonus)

  • Accurate classification of workers (employee vs. contractor)

Failure to comply can result in penalties and potential legal disputes.

3. Government Contributions and Employee Benefits

For full-time employees, employers are expected to handle:

  • SSS: Provides retirement, sickness, maternity, and disability benefits

  • PhilHealth: Covers national health insurance

  • Pag-IBIG Fund: A government savings and housing loan program

Managing these deductions without a local HR team or infrastructure can become a significant administrative challenge.

Common Payment Options for Remote Filipino Employees

Let’s look at the typical ways businesses pay remote workers in the Philippines—and the pros and cons of each.

1. Payment Platforms (e.g., Wise, PayPal, Payoneer)

These platforms are user-friendly and fast but:

  • Are better suited for freelance or short-term work

  • Don’t provide government benefit coverage

  • Can lead to misclassification risks if used for full-time roles

2. Direct Bank Transfers via SWIFT

While this seems straightforward, it comes with drawbacks:

  • High fees for both sender and recipient

  • No automatic tax or benefits deductions

  • Exchange rate volatility

  • Doesn’t fulfill local compliance requirements

3. Setting Up a Legal Entity

Creating a local business entity allows full legal employment, but:

  • It’s expensive and time-consuming to set up

  • You’ll need local legal, HR, and finance support

  • There are ongoing compliance, tax, and reporting obligations

For small teams or fast-scaling companies, this can be an inefficient path.

A Smarter Alternative: Work with a Local Employer of Record (EOR)

If you want to legally employ and pay staff in the Philippines without establishing a business there, partnering with an Employer of Record (EOR) is often the simplest option.

What an EOR Does:

  • Hires employees on your behalf under their local entity

  • Ensures full compliance with labor and tax laws

  • Manages payroll, benefits, and deductions

  • Reduces your legal exposure and administrative burden

You maintain full control over the employees’ day-to-day work, but the EOR takes care of legal and operational complexities.

Why Choose BASE Global Solutions as Your Hiring Partner?

At BASE Global Solutions, we help growing businesses build high performing remote teams in the Philippines without the complexity, cost, or compliance risks of setting up a local entity.

Here’s why businesses choose BASE Global:

  • End-to-End Compliance: From payroll taxes to mandatory benefits like SSS, PhilHealth, and Pag-IBIG, we handle it all accurately and on time.

  • Transparent Payroll Management: Your team members receive their full government-mandated benefits, and you receive a clear breakdown of every cost.

  • Flexible Hiring Options: Whether you're hiring one key staff member or building a full remote department, we offer scalable solutions to match your pace.

  • Retention-Focused Culture: We go beyond compliance providing HR support, local employee engagement strategies, and a strong focus on retention and performance.

  • Local Expertise, Global Standards: With on the ground experience in the Philippines and a global mindset, we bridge the gap between your business goals and local realities.

We don’t just help you hire we help you build a thriving, compliant, and loyal team.

What to Look for in an EOR Partner

When choosing a partner to help you hire in the Philippines, consider these factors:

  • Compliance Expertise: Do they understand local labor law and tax regulations?

  • Transparent Payroll Management: Can they provide detailed breakdowns of salary, deductions, and contributions?

  • Talent Retention Support: Do they offer workspaces, benefits, and other perks to keep employees engaged?

  • Scalability: Can they support your growth as your team expands?

  • Proven Track Record: Look for experience, testimonials, or case studies that show success in the region.

Final Thoughts

The Philippines offers a deep pool of qualified talent, but paying remote employees legally and efficiently requires local knowledge and infrastructure. Whether you’re hiring one employee or building a full offshore team, understanding your options—from payment platforms to setting up an entity to working with an EOR—will help you make the right decision for your business.

If your business is exploring remote hiring in the Philippines and you want a, compliant, and efficient process, BASE Global Solutions is here to help. Let us handle the compliance and logistics—so you can focus on what matters most: growing your business.