What it costs to employ someone in the Philippines: a worked example, holiday pay and night shifts

On a sample basic salary of ₱30,000 a month, the extras Philippine law requires add ₱6,480 a month, taking the employer's cost to ₱36,480 before any night, holiday or overtime pay. Those extras are the 13th-month pay accrual and the employer's share of SSS, PhilHealth and Pag-IBIG. This guide shows the working, the holiday pay rates, the 2027 holiday list, and what New Zealand or Australian hours mean for night pay. Rates are as at October 2026.

What does one employee cost each month? A worked example

The example is one full-time, rank-and-file employee on a basic salary of ₱30,000 a month, working Monday to Friday during the day. The salary is a sample to show the maths, not a market rate for any role.

Item	How it is worked out	Employer pays a month
Basic salary	Sample figure	₱30,000
13th-month pay, accrued	₱30,000 ÷ 12, under Presidential Decree No. 851	₱2,500
SSS, employer share	₱30,000 falls in the ₱29,750 to ₱30,249.99 bracket of SSS Circular No. 2024-006: ₱2,000 regular social security, ₱1,000 provident fund and ₱30 Employees' Compensation	₱3,030
PhilHealth, employer share	5% of ₱30,000 is ₱1,500 (Advisory No. 2025-0002), shared equally with the employee (Circular No. 2020-0005)	₱750
Pag-IBIG, employer share	2% of the ₱10,000 maximum fund salary set by Pag-IBIG Circular No. 460 (as summarised by the Department of Budget and Management)	₱200
Total	₱6,480 on top of salary, or 21.6%	₱36,480

The percentage falls as salaries rise, because SSS stops at a ₱35,000 salary credit and Pag-IBIG at a ₱10,000 fund salary, while PhilHealth keeps rising to a ₱100,000 ceiling. On a ₱60,000 basic salary the same items come to ₱10,230, or about 17%.

The employee pays a share too, deducted from their pay: ₱1,500 SSS, ₱750 PhilHealth and ₱200 Pag-IBIG, ₱2,450 in all, plus income tax the employer withholds (the BIR's withholding tax calculator shows how much). Keep that in mind when you compare a salary with a freelancer's rate: a freelancer funds their own contributions, leave and any 13th month out of what you pay them.

The example leaves out night, holiday and overtime premiums (below), private health cover, equipment and any provider's fee. To see what a quote does and does not include, use the checklist for comparing offshore hiring quotes.

What are SSS, PhilHealth and Pag-IBIG, and how often do the rates change?

Every employer must register its employees with three government schemes, pay its own share of each contribution, deduct the employee's share from their pay and send both in every month.

• SSS (Social Security System) covers retirement, sickness, maternity, disability and death benefits, under Republic Act No. 11199. The employer alone also pays the Employees' Compensation contribution, which covers work-related injury and illness. The contribution is 15% of the monthly salary credit (10% employer, 5% employee), and the credit runs from ₱5,000 to ₱35,000. The part of the credit above ₱20,000 goes to the member's own provident fund account.
• PhilHealth is national health insurance, under the Universal Health Care Act (Republic Act No. 11223). The premium is 5% of monthly basic salary, with a floor of ₱10,000 and a ceiling of ₱100,000. It is worked out on basic salary only, without overtime, allowances or 13th-month pay.
• Pag-IBIG (the Home Development Mutual Fund) is a savings and housing loan fund, under Republic Act No. 9679. Employer and employee each pay 2% of a fund salary capped at ₱10,000.

All three have changed in recent years: the SSS table above took effect in January 2025, PhilHealth reached 5% in 2024, and Pag-IBIG's cap doubled in February 2024. PhilHealth reconfirmed the 5% rate in Advisory No. 2026-0042. Check each agency's current table before you budget, and ask any provider which tables its quote uses.

How does 13th-month pay work?

13th-month pay comes from Presidential Decree No. 851. It is not a bonus and it does not depend on performance.

• Who gets it. Every rank-and-file employee in the private sector who has worked at least one month in the calendar year, whatever their job title or how they are paid. Someone who resigns or is let go during the year is owed a pro-rated amount.
• How much. At least one-twelfth of the basic salary the employee earned in the calendar year. Overtime, night differential, holiday premiums and allowances are left out unless the employer's own policy includes them.
• When. On or before 24 December. Some employers pay half mid-year and half in December.

In practice, accrue one-twelfth of basic salary every month, as in the example above, so December is not a surprise.

What do rest days, holidays and overtime pay?

Under the Labor Code, normal hours are no more than eight a day, and every employee gets at least 24 consecutive hours of rest after six working days. Most office roles work five days with an unpaid hour for meals, so a day shift runs 9am to 6pm.

The Philippines has two kinds of public holiday, and they pay differently:

• Regular holidays are paid days off. An employee who does not work still gets their normal day's pay, provided they worked, or were on paid leave, the working day before. A monthly salary already covers this, so the extra cost only arises when someone works the holiday.
• Special non-working days are "no work, no pay" unless company policy, practice or the contract says otherwise.
• Special working days are commemorations that are ordinary working days for pay.

The rates for someone who works, from the Department of Labor and Employment's Labor Advisory No. 12-25 for the 2026 holidays (it issues one each year), are:

Day worked	First eight hours	Each hour after eight
Ordinary working day	100%	125%
Rest day	130%	169%
Special non-working day	130%	169%
Special non-working day on a rest day	150%	195%
Regular holiday	200%	260%
Regular holiday on a rest day	260%	338%
Special working day	100%	125%

Overtime is the day's hourly rate plus 30% on a rest day or holiday, or plus 25% on an ordinary day, which is where the second column comes from. Night differential, below, is paid on top.

What are the Philippines' public holidays in 2027?

Holiday dates are set each year by presidential proclamation. For 2027 that is Proclamation No. 1427, signed on 8 September 2026, as reported by GMA News.

Date	Day	Holiday	Type
1 January	Friday	New Year's Day	Regular
6 February	Saturday	Chinese New Year	Special non-working
25 February	Thursday	EDSA People Power Revolution anniversary	Special working day (not a holiday)
25 March	Thursday	Maundy Thursday	Regular
26 March	Friday	Good Friday	Regular
27 March	Saturday	Black Saturday	Special non-working
9 April	Friday	Araw ng Kagitingan	Regular
1 May	Saturday	Labor Day	Regular
12 June	Saturday	Independence Day	Regular
21 August	Saturday	Ninoy Aquino Day	Special non-working
30 August	Monday	National Heroes Day	Regular
1 November	Monday	All Saints' Day	Special non-working
2 November	Tuesday	All Souls' Day	Special non-working
30 November	Tuesday	Bonifacio Day	Regular
8 December	Wednesday	Feast of the Immaculate Conception	Special non-working
24 December	Friday	Christmas Eve	Special non-working
25 December	Saturday	Christmas Day	Regular
30 December	Thursday	Rizal Day	Regular
31 December	Friday	Last day of the year	Special non-working

Eid'l Fitr and Eid'l Adha are also regular holidays, but their dates follow the Islamic calendar and are proclaimed separately. The President can declare extra holidays during the year, and some cities and provinces have local holidays, so check the official proclamations before you plan around a date.

For a Monday-to-Friday employee, seven of the regular holidays above fall on weekdays (plus the two Eid holidays once dated), and three fall on a Saturday. Five special non-working days fall on weekdays. Apart from New Year's Day and Good Friday, those weekday holidays are working days in New Zealand and most of Australia, so decide early whether your person works them. On the sample salary the daily rate is about ₱1,379 (₱30,000 × 12 ÷ 261, a common factor for a five-day week; check the one your payroll uses). Working all seven weekday regular holidays adds about ₱9,655 over the year, because each adds a further 100% of the daily rate. Working the five weekday special days adds about ₱2,069 at 30% each.

What do New Zealand or Australian hours mean for night pay?

Under the Labor Code, every hour worked between 10pm and 6am earns night differential of at least 10% of the regular hourly rate. The Philippines is on UTC+8 all year, with no daylight saving, so 9am in your office is:

Your office	9am there is, in Manila
New Zealand, winter (NZST)	5am
New Zealand, summer (NZDT)	4am
Sydney, Melbourne, Canberra, Hobart, winter	7am
Sydney, Melbourne, Canberra, Hobart, summer	6am
Brisbane	7am all year
Adelaide, winter / summer	7:30am / 6:30am
Perth	9am all year

So a full Australian business day rarely reaches the night window, while a full New Zealand day starts inside it: the first hour in winter, the first two in summer.

Worked example. The same ₱30,000 employee covers a New Zealand winter day, 9am to 6pm in Auckland, which is 5am to 2pm in Manila with an unpaid lunch hour in the late morning. One hour a day, 5am to 6am, falls in the night window.

• Hourly rate: ₱30,000 × 12 ÷ 261 ÷ 8 = about ₱172.41.
• Night differential: 10% × ₱172.41 = ₱17.24 for each night hour.
• A month: ₱17.24 × 1 hour × 21.75 working days (261 ÷ 12) = about ₱375.
• In New Zealand summer the shift starts at 4am, so two night hours a day: about ₱750 a month.

Night pay is not part of 13th-month pay or PhilHealth's basic salary, but it is compensation for SSS, so it can move someone up a bracket. ₱30,375 lands on a ₱30,500 salary credit, raising the employer's SSS share from ₱3,030 to ₱3,080; ₱30,750 lands on ₱31,000 and ₱3,130.

Across the people we employ for New Zealand and Australian clients, early starts are normal but night hours are a small share of the work. Of the 32 with at least 20 weekday shifts on record between 29 June and 27 September 2026 (1,942 shifts, during the New Zealand and Australian winter), the median usual start was about 6:45am Manila time. Ten usually started before 6am, 18 between 6am and 8am, and four at 8am or later. Hours between 10pm and 6am were 4.5% of their paid time. In summer, anyone whose shift follows New Zealand time starts an hour earlier.

Two practical points. First, a role that needs only a few hours' overlap can start later and avoid the night window, while a role that needs your whole day should be priced for it. Second, decide whether the shift moves with New Zealand or Australian daylight saving or stays fixed in Manila time, and write that into the contract, because it changes the start time, and possibly the night pay, twice a year.

What paid leave does the law require?

The Labor Code's minimum is service incentive leave: five days of paid leave a year once an employee has worked for a year. Unused days can be converted to cash at the end of the year. It does not apply where the employer already gives at least five days of paid vacation leave, or to businesses that regularly employ fewer than ten people. Maternity, paternity and some other leave come from separate laws.

That is a low floor. Most employers of office staff in the Philippines give more vacation and sick leave, and candidates compare it when choosing between offers.

Ramp Remote is one way to have all of this run for you: our registered company in the Philippines is the legal employer and handles payroll, contributions, 13th-month pay, and holiday and night pay. See what that costs, or read how to tell whether a contractor is really an employee.

Last checked 17 October 2026. This guide is general information, not legal or payroll advice. Rates and dates change; check them with the official sources before you rely on them.