Employer of Record in the Philippines: A US Buyer's Guide

An employer of record (EOR) in the Philippines is a local company that becomes the legal employer of your Filipino hire. It signs the contract, runs payroll, pays statutory contributions and handles compliance. You direct the daily work. You do not need to register a Philippine entity to do it. For most US companies hiring their first one to ten people there, it is the fastest compliant route.

This guide covers how the model works, what you pay for, how it compares with an entity or contractors, and the Philippine termination rules that catch foreign employers out.

TL;DR

• An EOR employs your Philippine staff on your behalf. You manage the work, and the EOR carries the contracts, payroll, benefits and legal liability.

• Entity setup can take 2 to 6 months and cost $50,000 to $150,000 or more upfront, while EOR onboarding takes days.

• Ask every provider whether the quote includes salary, statutory benefits, the 13th month, equipment and support, or only the provider’s fee.

• Termination in the Philippines needs a just or authorized cause and a two-notice process. “At will” does not exist there.

• Ramp EOR is our managed option for US, Australian and New Zealand businesses hiring in the Philippines.

What an employer of record does in the Philippines

The Philippines does not let a foreign company simply put a person on its US payroll and ignore local law. A Filipino employee working in the country is covered by Philippine labor standards, social contributions and tax withholding, whoever pays them. An EOR solves this by employing the person under its own local registration.

In practice the EOR:

• Issues a compliant Philippine employment contract.

• Runs payroll and withholds income tax.

• Pays the government-mandated contributions to SSS, PhilHealth and Pag-IBIG, and the mandatory 13th month pay.

• Keeps employment records and handles leave, benefits and statutory filings.

• Handles the legal process if employment ends.

You keep control of what matters to the business: who you hire, what they work on, how they are managed and how they perform. The EOR is the employer on paper. You are the employer in day-to-day reality.

That split is why the model is popular for administrative, finance, support and technical roles. You get someone who works as a member of your team without taking on a foreign legal footprint.

EOR, entity or contractor: the three routes

Foreign companies hiring in the Philippines have three main options: a local entity, independent contractors, or an EOR. They trade off cost, speed, control and risk differently.

When an entity makes sense

If you expect a large team in the Philippines for years, an entity can eventually pay off. Industry analysts make the same point: an EOR is ideal for testing a market or scaling quickly, while large long-term operations may justify the upfront costs of owning an entity. Until you reach that scale, you carry fixed legal and accounting costs for a team that an EOR would handle for a monthly fee.

Why contractors are the risky shortcut

Hiring a full-time, supervised person as a “contractor” is tempting because it is cheap and fast. The problem is classification. If someone works set hours, uses your tools, reports to your manager and works only for you, they look like an employee, whatever the paperwork says. That exposes you to claims for unpaid benefits and to security of tenure arguments. We cover the practical test in our piece on contractor or employee in the Philippines.

What an EOR really costs

This is where buyers get surprised. Many EOR quotes show only the provider’s fee. Salary, SSS, PhilHealth, Pag-IBIG and the 13th month come on top, and some providers list them as separate lines. A cheap headline fee can end up the more expensive option.

When you compare quotes, build the full monthly cost for one hire:

1. Gross salary for the role.

2. Employer share of SSS, PhilHealth and Pag-IBIG.

3. One-twelfth of the 13th month pay.

4. Paid leave and other mandated benefits.

5. Equipment, software and workspace if the provider supplies them.

6. The provider’s management or service fee.

7. Any onboarding, deposit or termination fee.

If a quote cannot be turned into one monthly figure per person, ask for that figure before you sign.

What our pricing looks like

We sell offshore staff as one monthly fee per full-time hire. It covers salary, compliance, equipment, support and onboarding. Published starting rates per person per month include:

The full list is on our roles page, and what a quote includes is spelled out there too. Ramp EOR itself has no published price, so we quote it for your situation.

Philippine employment rules foreign employers underestimate

The model is simple. The law behind it is not, and it is stricter than most US managers expect.

Probationary staff have full statutory benefits

A probationary period does not reduce statutory entitlements. Commentary from Philippine practitioners confirms that probationary employees are covered by labor standards and enjoy the same mandatory benefits as regular employees. Budget for the 13th month and contributions from day one.

Termination needs a cause and a process

The Philippines protects security of tenure. Under the implementing rules of the Labor Code, no employee may be terminated except for a just or authorized cause and with due process. The Bureau of Labor Relations explains the right to security of tenure in plain terms.

The causes fall into two groups:

• Just causes relate to the employee’s conduct: serious misconduct, willful disobedience, gross and habitual neglect, fraud or breach of trust.

• Authorized causes relate to the business: redundancy, retrenchment to prevent losses, or closure. Retrenchment is a recognized route, but it has to be genuine and follow the rules.

The process is a two-notice requirement. For a just cause, the employee gets a first notice stating the grounds and at least five days to explain. For an authorized cause, the notice period is at least 30 days. A hearing is mandatory only in certain circumstances, such as when the employee asks for one in writing. Immediate termination without this process is not permitted.

For a US manager used to at-will employment, this is the biggest culture shift. It is also the best reason to let an experienced local employer run the process. A mishandled dismissal can cost far more than a year of EOR fees.

Final pay has limits too

Even when employment ends, you cannot deduct what you like. Philippine practitioners note that final pay is still wages, so only statutory or validly authorized deductions apply. Equipment not returned or training costs need a proper legal basis before they come out of a final paycheck.

If you are weighing a specific dismissal, talk to a Philippine labor lawyer or your EOR’s compliance team before you act. Do not rely on a general guide.

How to choose an EOR in the Philippines

Providers look alike on their websites. These questions separate them.

Who is the actual employer? Some providers hold their own Philippine entity. Others subcontract to a local partner. Ask which entity signs your employee’s contract.

What is in the monthly price? Ask for a sample invoice for one hire, with salary, statutory contributions, the 13th month accrual, equipment and fees on separate lines.

Do you meet the candidates? Some models assign you a person. Better ones let you interview and select. You will work with this person daily.

Who sources and vets? Many EORs only employ people you find yourself. If you do not already have a candidate, recruitment is a second cost and a second vendor. A provider that recruits, vets and employs removes that handoff.

What happens at exit? Ask how termination, resignation and final pay are handled, and whether there are exit fees.

Can you convert later? If you grow, you may want to move the team to your own entity. Ask whether the provider supports that transition and whether it charges for it.

Where is support based? A provider in your time zone, or with a named relationship manager, resolves payroll questions faster than a ticket queue.

Our perspective: an EOR is the legal layer, not the whole job

We see the same pattern with US, Australian and New Zealand owners. They start by searching for an EOR, because that is the term they have heard. Then they discover the legal structure is the easy part. The harder parts are finding the right person, onboarding them, giving them equipment and keeping them engaged for years.

A pure EOR solves the first problem. It does not find you a bookkeeper, check their references or make sure their laptop and internet work. That is why we built Ramp Remote around a full-service model: we recruit and vet, you meet and choose the candidate, and we employ and support them. You see one monthly price up front, covering employment, payroll, equipment and ongoing support, with a relationship manager rather than a ticket queue.

Our advice, in short:

1. Decide the role first, then the legal structure. A clear job description saves more money than a cheaper EOR fee.

2. Start with one or two hires. Learn how the working relationship runs before you scale.

3. Treat your offshore hire as a team member, with proper onboarding, goals and feedback. Retention is where the real savings are.

4. Compare total monthly cost per person, not provider fees.

5. Do not use contractor agreements as a workaround for full-time staff.

We claim savings of up to 40% on staffing costs for the companies we work with, but your figure depends on the role and what you pay locally today. Run your own numbers.

— Josh

Roles US companies commonly hire through an EOR

The roles that work best offshore are structured, process-driven and measurable. The most common requests include:

• Finance and accounting: an offshore bookkeeper, an accounts payable and receivable officer, a payroll officer or a tax accountant.

• Administration: a virtual assistant or an executive assistant to take on inbox, calendar, scheduling and reporting.

• People operations: an HR and recruitment coordinator to screen candidates and run onboarding.

• Marketing: a digital marketing specialist, a social media manager or a paid ads specialist.

The common thread is that you can write down what good looks like. If you can, the person can be managed remotely. If you cannot, fix that first.

A realistic timeline for your first hire

With an EOR, the legal side moves in days rather than the 2 to 6 months an entity can take. The slower part is usually yours: agreeing the role, interviewing and preparing onboarding.

1. Define the role. Write the tasks, tools, hours and the outcomes you expect in the first 90 days.

2. Get a quote. Ask for the all-in monthly figure per person.

3. Meet the candidates. Interview a shortlist and pick the person you would want on your team.

4. Sign and onboard. The EOR issues the local contract and sets up payroll and equipment.

5. Run the first 90 days properly. Weekly check-ins, documented processes and clear priorities.

Our how it works page walks through this sequence, and our guide to planning your first offshore hire covers the preparation in more depth.

Ramp EOR: when you already have your people

Some companies already have a candidate or an existing contractor they want to employ properly. For that, Ramp EOR lets us act as the Philippine employer of record while you manage the work. If instead you want us to recruit, vet and employ from scratch, browse the available roles and start with one hire.

FAQ

Is an employer of record legal in the Philippines?

Yes. Using an EOR means a locally registered company employs your staff under Philippine law, which is exactly what the law requires of any employer. The risk is not the model but the provider, so confirm which entity signs the contract and that it handles contributions and tax withholding correctly.

How much does an EOR in the Philippines cost?

It depends on what the quote includes. Some providers quote only their fee, with salary, social contributions and the 13th month added on top. Ask for the all-in monthly cost per person. Our published role rates start at 1300 USD per person per month and include salary, compliance, equipment and support.

Can I fire an EOR employee immediately?

No. Philippine law allows termination only for a just or authorized cause, after a two-notice process. For a just cause the employee gets at least five days to explain, and authorized causes need at least 30 days’ notice. Involve your EOR before any dismissal conversation.

Should I use an EOR or open a Philippine entity?

For a small or growing team, an EOR is usually faster and cheaper to start. An entity can make sense when you have a large, stable operation and want full control. Many companies begin with an EOR and revisit the decision once the team is established.

Sources

• Employer of Record in the Philippines: Complete Guide 2026 (Payoneer)

• BLR Department Order No. 147-15 (Supreme Court E-Library)

• Termination of Employment (Bureau of Labor Relations)

• Are probationary employees entitled to benefits (Respicio & Co.)

• Statutory deductions from final pay in the Philippines (Respicio & Co.)

• A quick look at retrenchment, redundancy and the rights of laid-off workers (Philstar)

Recommended

• Hire in the Philippines: NZ & Australia guide

• Ramp EOR

• Contractor or employee in the Philippines?

Written with BabyLoveGrowth’s content tools