What Philippines employee benefits must you provide in 2026?

1. Enrol every employee in all three social insurance schemes from day one

   Register each new hire with SSS, PhilHealth, and Pag-IBIG before their first working day. Each fund runs a separate contribution table and benefit set. Missing any one registration is a compliance failure from the outset.

2. Set up monthly contribution remittance for SSS, PhilHealth, and Pag-IBIG

   Remit the employer share each month: SSS at the applicable employer rate on monthly salary credit up to the wage ceiling, PhilHealth at the employer rate on monthly basic salary, and Pag-IBIG at the employer rate for employees earning over PHP 1,500 per month. Accurate salary credit reporting to SSS is the employer's key obligation for sickness and maternity benefits.

3. Track Service Incentive Leave entitlement from month one

   Employees become entitled to five days of paid Service Incentive Leave after one year of service under Labor Code Article 95. Begin tracking service from the start date. Unused SIL must be converted to cash at the employee's option at separation.

4. Calculate and pay 13th month pay by 24 December each year

   Every rank-and-file employee who has worked at least one month in the calendar year is entitled to 13th month pay equal to one full month of basic salary, prorated if they have not completed the year. The formula is total basic salary earned in the calendar year divided by twelve. Pay no later than 24 December. Failure to pay is a DOLE-enforceable violation.

5. Administer maternity and paternity leave in line with statutory requirements

   Maternity leave for live childbirth runs for the full statutory period with full pay under Republic Act No. 11210. The benefit is funded by SSS: the employer advances the pay and is reimbursed by SSS provided contributions are current. Paternity leave covers the statutory period with full pay for married male employees for the first four deliveries of the legitimate spouse, funded directly by the employer.

6. Apply the correct public holiday pay rules for regular holidays and special non-working days

   The Philippines distinguishes between regular paid holidays and special non-working days, each with different pay rates and computation rules. Compute holiday pay correctly based on whether the employee worked or was absent, and whether the day falls on a rest day. Verify the current proclamation for the full list of holidays each year.

Model your loaded benefit cost on the Employer Cost Calculator to see the full picture for a specific salary and package.

The three mandatory social insurance schemes and their 2026 employer rates:

• SSS (Social Security System). 10.5% employer + 4.5% employee on monthly salary credit, capped at PHP 30,000/month. Covers sickness, maternity, disability, retirement, and death benefits. Funded by Republic Act No. 11199.
• PhilHealth (National Health Insurance). 2.5% employer + 2.5% employee of monthly basic salary. Covers inpatient and outpatient care. Funded by Republic Act No. 7875 as amended.
• Pag-IBIG (HDMF, Home Development Mutual Fund). 2% employer + 2% employee of monthly salary for employees earning over PHP 1,500 per month. Covers housing loans and a savings-style provident fund. Funded by Republic Act No. 9679.

What employees actually receive

The SSS sickness benefit pays 90% of the employee's average daily salary credit, for up to 120 days per calendar year. It is state-funded: the employer does not pay sick days from payroll. The employer's job is timely SSS remittance and accurate monthly salary credit reporting.

Competitive top-ups

Many employers in tech and BPO add an HMO (private health maintenance organisation) on top of PhilHealth. HMO costs typically run 15,000 to 50,000 PHP per employee per year, depending on coverage tier. This is a strong retention signal in a market where PhilHealth coverage alone is considered minimal.

Presidential Decree No. 851 mandates 13th month pay for all rank-and-file employees who have worked at least one month in the calendar year. The amount is prorated if the employee has not completed the full year.

How the amount is calculated

The formula is: total basic salary earned in the calendar year, divided by 12. Only basic salary counts. Overtime pay, allowances, profit-sharing, and other monetary benefits are excluded from the base.

Tax treatment

13th month pay is tax-exempt up to a combined ceiling with other bonuses. The tax-exempt ceiling was reported in market sources but could not be confirmed from a tier-1 BIR circular in this research run. Verify the current ceiling with your payroll provider or a Philippine tax adviser before payroll processing.

What competitive employers add

Tech and BPO employers routinely add a 14th month or a mid-year performance bonus, separate from the mandatory 13th month payment. A 14th month bonus at 1 full month basic salary is common in competitive Metro Manila hiring. Some firms grant 15th month for long-tenure employees.

These extra bonuses are discretionary. Once they appear in employment contracts they can become contractual obligations. Write them carefully.

Specific elements competitive Philippines employers now include:

• Internet or connectivity allowance. PHP 1,000 to 2,000 per month. Common since the pandemic era. Employees in provincial locations especially value it.
• Equipment or home-office setup budget. PHP 10,000 to 30,000 one-off or per laptop cycle. Covers monitor, desk chair, and peripherals.
• Mental wellness support. Employee Assistance Programme (EAP) access or wellness app subscriptions. Growing fast among BPO and tech firms post-2023. Cost: PHP 1,500 to 5,000 per employee per year.
• Flexible leave policies. Many tech employers now offer flexible or unlimited leave on top of the statutory 5 days SIL. Candidate surveys consistently rank leave generosity as a top-three differentiator in the Philippines.
• Birthday leave. One paid day on or near the employee's birthday. Widely practised; not mandated by law.
• Bereavement leave. Three to five paid days for immediate family death. Not statutory; common in most Philippine employment contracts.

The cost of this stack is modest: roughly PHP 30,000 to 80,000 per employee per year for the full remote-work and wellness bundle. The impact on offer acceptance and retention is significant in a market where candidates routinely compare total packages across three or four offers.

Real HR and legal experts handle SSS, PhilHealth, and Pag-IBIG registration and monthly remittance, administer 13th month pay, and process maternity and paternity leave claims. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee. Employer cost passes through at cost, itemised on every invoice.

What is included in Teamed's standard EOR fee:

• SSS, PhilHealth, and Pag-IBIG enrolment and monthly contribution remittance
• 13th month pay calculation, processing, and DOLE reporting
• Service Incentive Leave tracking
• Maternity leave coordination with SSS reimbursement process
• Paternity leave administration
• Public holiday pay computation (regular holidays vs. special non-working days)
• BIR Form 1601-C payroll tax filing

What clients pass through at cost on the invoice:

• SSS, PhilHealth, and Pag-IBIG employer contributions (computed from actual salary)
• HMO or private health insurance premiums
• Supplemental allowances (rice, transportation, meal)
• Performance bonuses and discretionary additional months
• Learning and development budgets

The benefits package is bespoke to the client's hiring positioning. Teamed's job is to make the compliance mechanics frictionless and the contribution stack accurate, not to set the package.

Key sources: Department of Labor and Employment (DOLE), Social Security System (SSS), and Republic Act No. 11210 (Expanded Maternity Leave Law).