- Overview: Philippines
- Global HR Compliance
- Global PEO and Payroll
- Work Permit for Hiring Expats via PEO
- Expand without a company set up
- Contractor vs. Employee: Which Is Better?
Global Employer of Record (EOR) in the Philippines
Business operations in the Philippines can pose multiple challenges for international companies hoping to expand there. Acumen International provides a global employment solution for businesses like yours via our Global Employer of Record (EOR) in the Philippines to alleviate HR compliance risks and help you surmount any potential obstacles to your company’s global expansion.
What Is a Global Employer of Record?
A global EOR (Employer of Record) is an arrangement between a company and a third-party global employment solutions provider that takes on all of the HR functions on behalf of the client and assumes 100% liability. This could include handling global payroll to employee benefits, immigration support, providing guidance on local labor and tax legislation, and HR best practices. The EOR will ultimately provide services that help you better run your business, which in turn can help you focus on the tasks at hand.
A global EOR (Employer of Record) will relieve you of many of the global employment responsibilities associated t, including
- Compliant hiring and firing of employees
- Managing the employee benefits system
- Handling payroll and benefit plans
- Reporting payroll taxes
- Any legal issues that may arise in your workplace.
5 Global Employment Challenges a Global EOR Can Help Address in the Philippines
1. Employment Taxes
There are many different types of taxes that businesses have to pay, but employment taxes are one of the most important and ever-evolving. These taxes can vary significantly from country to country and can be a large portion of a monthly salary. Not only are the rates different in each country and state, but the tax filing methods can be highly complicated. So it can be challenging to figure out how much you need to withhold from your employees and how much you owe in taxes in the Philippines.
2. In-country Employee Registration for Payroll in the Philippines
Managing payroll in different countries can be a complex and challenging task. Employees may need to be registered and taxed differently in each country, and there may be other laws that need to be followed. This can make it very hard to keep track of everything and ensure everything is done correctly. However, it is critical to ensure that employees are appropriately registered with the local authorities before they start work. Failing to do so can result in penalties for both the employee and the employer.
3. Local Payroll Calculations in the Philippines
Some countries have different rules when it comes to employment contracts. Understanding how payroll calculations work in your new country is essential to avoid surprises. In some cases, you may be responsible for paying your employees for the entire employment contract duration even if they are not performing as expected or you want to end their employment early. This can be a financial shock to foreign employers who are not used to this practice.
3. End of Financial Year Reporting in the Philippines
The financial year for many countries ends in March, and companies that have a presence in more than one country need to produce financial reports for each country and send it to the relevant government bodies. With the end of the financial year approaching, accountants are busy at work preparing reports, some of which can be complex and difficult to navigate through as they may be on foreign websites with little or no English language support. You must get these reports lodged on time as it could result in late payment penalties.
If your company plans to do business in multiple countries, clearly understanding each jurisdiction’s local employment and tax laws is essential. Compliance with these laws can be complex and time-consuming, so many businesses outsource payroll management and other HR functions to a global Professional Employer Organisation (PEO). A reputable Global PEO will have experts on staff who are familiar with the specific requirements in each country where you plan to operate.
4. Local Employment Contracts Compliance
As an employer, you need to have local employment contracts that comply with the law of the jurisdiction where your employees work. These contracts should be provided in both English and the local language. Do not simply copy and paste your existing contract template from your home country – this could result in non-compliance and serious legal consequences.
When recruiting employees for your business, it is critical to ensure their employment contract is appropriate for the country where they will be working. The language of the employment contract is a crucial detail to remember during the recruitment process, as non-compliance to target country employment laws or any mistakes with the paperwork could cost you money, time, and potentially your business’s reputation.
5. Employment Contract Termination in the Philippines
The employment termination process can be just as necessary as the hiring process. This part of employment should not be taken lightly as it can have many implications and consequences, both for the employer and the employee. Therefore, it is essential to consider all aspects of the situation before deciding.
The start of termination process begins when the employee signs the employment contract. If the termination guidelines are clear and precise from the outset, then terminating an employee will be much smoother.
When setting out the terms of employment, you must be clear about the notice period (making sure it’s aligned with the country-specific regulations) and what is expected in terms of returning company equipment, knowledge transfer, and a credit card or cash float balance. Non-compete clauses protecting your intellectual property are also important considerations. Doing so will help avoid misunderstandings and potential legal problems down the road.
Global Employment Sevices by Employer of Record in the Philippines
Acumen International is a global Employer of Record that provides international employment services to companies with employees working in multiple countries, including the Philippines. We offer our clients a comprehensive service portfolio that includes the following.
- A single point of contact for all your cross-border payroll administration. A specialized employer organization (GEO) administers a local payroll through the EOR, which gives employees the confidence they will receive statutory employment benefits and protections. Local payroll management is one of the most challenging aspects of running any business, so it’s crucial to work with an experienced global EOR having expertise in global payroll.
- A Global Employer of Record ensures that the employment contract meets local labor law requirements. A Global EOR also works with employers to help them understand and comply with employment laws in different countries. The Global EOR also provides resources and training to employees on their rights and responsibilities under the contract.
- A Global Employer of Record ensures work permits and visa sponsorship for employees from other countries coming to the Philippines. This makes it possible for these workers to come to the employer’s country and work there for a set period.
- A Global Employer of Record guides clients on employment law matters such as notice, severance, termination, and statutory benefits.
- A Global Employer of Record provides communication and coordination between the EOR staff, client company, and employees through regional account managers in the Philippines, allowing for a more efficient and effective working relationship between all parties involved.
- A Global Employer of Record strives to create global pay strategies and structures that are fair and competitive. They consider many factors when setting pay levels, such as internal business needs and market rates. They also examine how local taxes and regulations can impact those rates to create a cohesive global model.
- A Global Employer of Record ) can help align HR programs with global function and business needs.
- Incorporation and payroll registration at the local level are essential. However, the associated costs and time investment required for skilled accounting and legal support can be prohibitive. A Global Employer of Record is the solution that helps you skip the costly and time-consuming tasks of local incorporation and registration. A global EOR ensures compliance without sacrificing flexibility or control of your foreign workforce.
Engaging the services of a global EOR (employer of Record) lets you offload compliance-related concerns and skip the hassle of incorporation.
Skip the paperwork, and skip the hassle. Stop worrying about complex tax rules and legal issues your business faces. Let us help you enter foreign markets with just one payment.
Share your project details with us here, and we will be happy to employ your selected international workforce on your behalf in the Philippines in a fast and cost-effective way.
Why Choose an Employer of Record Over Setting Up a Legal Entity in the Philippines
Payroll taxes and service fees can be an enormous burden for employers. Many companies use a Global EOR (Employer of Record) to help with these costs. PEOs typically charge a percentage of the total payroll, including employee insurance fees. It can be challenging to determine the actual costs for these services, especially when some employer taxes are only paid on wages up to a certain threshold.
1. Single Global Service Agreement
A global PEO can cover all your international projects within a single contract and add new employees and services as you expand your global workforce in new countries.
2. No Required Minimums
We accept projects of any length, with any number of employees.
3. Flexible Pricing
We adjust your pricing based on the project employee number, whether you need to scale up or down.
4. End-to-end Global Employment Solution
We manage all your global services, including employment, recruitment, immigration, legal and global HR consulting, saving you valuable time. And Acumen International covers the cost and saves you the effort of finding and selecting local employment-related service providers.
5. Risk Management
A professional employer organization can provide several advantages for your business, including cost savings. By hiring a PEO, you can avoid potential incidents, non-compliance, under-taxations, or worker misclassification risks that could cost your company large sums of money. The initial cost of hiring a global PEO may be less than you would otherwise spend to address a problem in the Philippines.
Global EOR (Employer of Record) Services: Save Up to 75-80% of Employee Management Cost
|Average Cost & Time||Our Solution *|
|Time to Market||10+ weeks||72 hours|
|Legal Advisors Fees||$ 10 000 +||………….|
|Official Employment & Benefits||$ 20 000 +||………….|
|Incorporation & Liquidation Costs||$ 11 000 +||………….|
|Bank Account Setup||$ 2 000 +||………….|
|Maintenance costs, in-house staff to manage the foreign entity, payroll, and administration.||$ 25 000+||………….|
|The approximate total cost of new market entry**||$ 74 000 +||$ 15 000|
* Per one Employee
** Costs vary from country to country
Global Payroll Calculator: Accurate Global Employment Cost Estimation
When hiring employees and contractors across the globe, you may not be choosing the most cost-effective and business-friendly country.
- Do you know which country is the most cost-effective place to hire employees?
- What are the costs of entity establishment and legal representation?
- What are the payroll costs and management fees?
- What are your ongoing annual tax compliance costs?
- Are you fully aware of banking implications?
- Did you know that labor laws and hidden costs could make your company less efficient when choosing a country to run your business?
- Did you know that there could be a more cost-effective country to hire employees in and save up to 50%?
Countries have different labor laws, compliance, and tax regulations. What if, instead of limiting your company’s international expansion by cutting through the jungle of local regulatory compliance, tax, labor, and immigration requirements, you could have all the information of 190 countries at your fingertips?
Acumen International offers the Global Payroll Calculator to help businesses understand the compliance requirements for conducting business in a new country. Acumen’s research team tracks developments in 190 countries around the globe. It provides up-to-date data on local regulations related to tax, payroll regulations, benefits, hiring practices, compliance requirements, and other labor-related factors that impact an employer’s bottom line. This valuable information makes the Global Payroll Calculator an invaluable tool for businesses looking to expand internationally.
Global Payroll Calculator helps companies reduce labor costs by providing up-to-date information on hiring, compensation, and tax requirements. It is also an ideal tool for quickly locating employees in any country.
How Global Payroll Calculator Can Help You Gauge Cost-of-Hire Worldwide
- Quickly estimate global employment & payroll costs from your desk in real-time.
- Empower your teams with advanced functionality to make better and faster hiring decisions.
- Determine the most cost-effective countries and adjust your employment budget accordingly.
- Budget your global expansion moves accurately in real-time. GPC has done the global payroll and tax math and compliance for you.
- Calculate and compare total employment costs in 190 countries.
- Estimate costs for a local and foreign workforce.
- Remove inaccurate manual calculations from your payroll, and cut payroll budgeting time.
- Get instant detailed breakdowns of in-country taxes, contributions, and statutory benefits.
- Eliminate inaccuracies, and save time and money that would otherwise be spent on manual calculations or waiting for quotes from local providers.
- Get complete quotes for a comparison of 190 countries in one click.
- Achieve 100% global employment compliance.
Spotlight on the Philippines
- Location: The Republic of the Philippines is an archipelago of over 7000 islands located in Southeast Asia. The country shares maritime borders with Japan, Taiwan, Indonesia, Vietnam, and China.
- Capital: Manilla, the capital of the Philippines, is one of the most densely populated cities in the world.
- Population: As of 2020, the population of the Philippines was around 109,000,000, making it the 12th most populous nation in the world. About 43% of the population is under age 20, making the Philippines population among the youngest in the world.
- Language: The official languages of the Philippine Republic are Filipino and English. Filipino, a version of Tagalog, is mostly spoken in Manilla. Both languages are used in business and government, making the Philippines an ideal location in Southeast Asia for English-speaking enterprises.
- Labor Force: The labor force in the Philippines is currently estimated to be around 44 million.
- Currency: The official currency of the Philippines is the peso (PHP), currently worth about 0.02 USD. Filipino workers are paid in PHP.
- Minimum Wage: The minimum wage in the Philippines varies by region and is set by regional wage boards. The current annual minimum wage is USD 2,053, ranking the Philippines 75th out of 197 nations globally. Failure of businesses to comply with minimum wage standards can result in severe penalties.
- World Bank Ease of Doing Business Rating: The most recent Ease of Doing Business Report ranks the Philippines at 95th out of 190 global economies.
- Global Marketplace Position: Since 2012, the Philippines has had one of the world’s fastest-growing economies, with a projected 2021 GDP of more than one trillion dollars, elevating the country’s position to 27th in the world.
- Developing Industries: The most promising growth industries in the Philippines are manufacturing, mining and mineral processing, pharmaceuticals, shipbuilding, electronics, and semiconductors.
- Prime Trading Partners: The main trading partners of the Philippines Republic are the United States, Japan, China, Singapore, South Korea, the Netherlands, Hong Kong, Germany, Taiwan, and Thailand.
Employ your Selected Workforce via Acumen Employer of Record (EOR) in the Philippines
As an Employer of Record services provider, Acumen International helps businesses legally engage and pay their selected highly skilled professionals in the Philippines. Businesses hiring locally should consider offering competitive salaries to acquire and retain top local talent.
As a global employment organization, we serve end employers and service companies representing international clients.
With Acumen’s Global employment services, we provide our clients with professional assistance to meet their global HR needs, such as:
- global talent acquisition and retention
- global expansion, to help you quickly enter new global markets without legal and HR compliance risks
- local support for international clients and their ex-pat employees
In the Philippines, acumen’s Employer of Record (EOR) offers an efficient and inexpensive alternative to direct hire. Our solution allows companies to operate in the country and 190 international markets where we serve our clients without registering as a local business entity.
Acumen International offers a global PEO and payroll solution to handle all payroll details while ensuring full compliance with in-country labor and taxation laws. For more information about Acumen’s Global PEO and payroll service in the Philippines click here.
Legally onboard and payroll your employees in the Philippines with EOR
In developing countries, local legislation constantly evolves, challenging international companies to keep pace with legal updates. Acumen’s solid global employment solution helps businesses overcome these challenges by hiring and compensating your local and ex-pat workforce in the Philippines on your behalf risk-free and cost-effectively.
Acumen’s Global Employer of Record (EOR) was designed to help international companies like yours expand their international reach and engage the brightest global talent for your projects.
If you are looking to reinforce your internal team with the expertise of Philippines-based global talent, or if you have already selected a local candidate to work for you remotely from the Philippines in full legal compliance, our global employment solution is a great choice.
In addition to legally onboarding local citizens, we can organize work permits and business visa sponsorship for your expatriate team via our Employer of Record and employ them on your behalf once legal permissions have been attained.
Partner with Acumen International, and let us help you handle your global employment and HR needs. With Acumen, you can rest assured that all legal requirements are met for compliant hiring and compensating your local and expatriate employees in the Philippines and 190 countries worldwide where we serve our international clients.