For the three Manila scenarios below, complete recurring employer cost runs from ₱59,147 to ₱136,230 a month on an annualized basis. The estimate includes 12 months of basic salary, 13th-month pay, employer SSS and Employees' Compensation, PhilHealth, and Pag-IBIG.
It excludes optional benefits, payroll or EOR fees, one-time setup, and event-driven costs such as overtime, special leave, separation, or retirement. The key budgeting point is that SSS and Pag-IBIG are already capped at these salaries, while PhilHealth stops rising once monthly basic salary reaches ₱100,000.
The cost snapshot
These are illustrative role examples, not salary benchmarks. Each assumes a locally work-authorized, age-30, rank-and-file employee in a private non-agricultural business-services company in Manila with more than 15 workers. The employee receives fixed monthly basic salary for a full year, works a normal daytime schedule, and does not work overtime, nights, rest days, or holidays.
Scope and date: Complete recurring estimate under the assumptions above, effective September 4, 2026. Amounts are in PHP and rounded to the nearest peso. Illustrative estimate, not a quote.
The declining burden rate is not a discount. It results from contribution caps: salary keeps rising, but some statutory lines stop rising with it.
What the recurring estimate includes
The model starts with 12 months of fixed basic salary and adds four employer-side layers.
The current SSS schedule sets the employer share at 10% of the applicable Monthly Salary Credit, which tops out at ₱35,000. At the maximum row, that is ₱3,500 a month, plus ₱30 for the employer-funded Employees' Compensation program.
The PhilHealth advisory uses a 5% premium on monthly basic salary from ₱10,000 to ₱100,000. Employer and employee split it equally, so the employer pays 2.5%. The salary base excludes items such as overtime, allowances, bonuses, and 13th-month pay.
Pag-IBIG requires a 2% employer counterpart. Its current payment guide uses a maximum fund salary of ₱10,000, making the employer amount ₱200 a month at all three salary levels.
For covered rank-and-file employees, 13th-month pay equals one-twelfth of basic salary earned during the calendar year and is due by December 24. That rule was reaffirmed in current DOLE guidance.
Three worked Philippines hiring-cost examples
Customer support specialist at ₱50,000 a month
Assumptions that travel with this result: ₱50,000 fixed monthly basic salary; Manila/NCR; age 30; private non-agricultural employer with more than 15 workers; monthly-paid, rank-and-file, normal daytime work; full year. Effective September 4, 2026. The five service incentive leave days are assumed taken when eligible, so no unused-leave cash payout is added. Optional benefits, premium work, service fees, setup, and event-driven costs are excluded. Illustrative estimate, not a quote.
Senior accountant at ₱75,000 a month
Assumptions that travel with this result: ₱75,000 fixed monthly basic salary; Manila/NCR; age 30; private non-agricultural employer with more than 15 workers; monthly-paid, rank-and-file, normal daytime work; full year. Effective September 4, 2026. The five service incentive leave days are assumed taken when eligible, so no unused-leave cash payout is added. Optional benefits, premium work, service fees, setup, and event-driven costs are excluded. Illustrative estimate, not a quote.
Software engineer at ₱120,000 a month
Assumptions that travel with this result: ₱120,000 fixed monthly basic salary; Manila/NCR; age 30; private non-agricultural employer with more than 15 workers; monthly-paid, rank-and-file, normal daytime work; full year. Effective September 4, 2026. The five service incentive leave days are assumed taken when eligible, so no unused-leave cash payout is added. Optional benefits, premium work, service fees, setup, and event-driven costs are excluded. Illustrative estimate, not a quote.
Why one flat employer percentage fails
Three Philippines mechanics move differently as salary rises:
- 13th-month pay keeps rising with basic salary. For a full-year covered employee, it adds 8.33% of 12-month basic salary.
- SSS flattens before these examples begin. Monthly compensation of ₱34,750 or more is already in the maximum contribution row. A ₱35,000 Monthly Salary Credit is a contribution cap, not a sudden change at a ₱35,000 cash salary.
- PhilHealth stops rising at ₱100,000 in monthly basic salary. The employer share is ₱2,475 at ₱99,000, ₱2,500 at ₱100,000, and still ₱2,500 at ₱101,000.
- Pag-IBIG is capped at ₱200 a month for the employer under the ₱10,000 maximum fund salary used here.
For every ₱100 of 12-month basic salary, the recurring employer cost in these examples is about ₱118.29 at the ₱50,000 salary, ₱115.81 at ₱75,000, and ₱113.53 at ₱120,000. Those figures apply only to the stated assumptions.
Manila is an assumption, not a national wage answer
The contribution formulas above are national, but minimum wages are regional and category-specific. The NCR wage page lists a ₱755 daily non-agricultural floor effective July 25, 2026. A current Caraga comparison is ₱475 a day, subject to the applicable wage order and category.
All three illustrative salaries are above the NCR floor. That does not make them market salaries, and it does not make Manila's floor portable to Cebu, Davao, or another location. Check the employee's city or municipality, sector, employer size, and current wage-order tranche before issuing an offer.
Costs that sit outside the three totals
The recurring totals are complete for the normal-work scenario, not a universal price for every employment fact.
Event-driven statutory costs
The Philippines can create additional employer-funded costs when a trigger occurs. The current benefits handbook covers these obligations in detail.
- Overtime, night work, rest-day work, and holiday work can create premium pay.
- Unused service incentive leave can become a cash liability. These examples assume the five days are taken when eligible.
- Maternity leave can require an employer salary differential above the SSS benefit. Paternity, solo-parent, VAWC, and special leave for women also depend on employee facts and qualifying events.
- Authorized-cause termination can require notice and separation pay. Retirement can create a statutory floor based on age, tenure, and any employer plan.
These are real obligations. They stay outside the arithmetic because no trigger, employee profile, or probability has been established for the illustrative scenarios.
Optional benefits and practical hiring costs
Private health insurance, life or accident cover, equipment, internet allowances, bonuses, enhanced leave, recruiting, background checks, and onboarding are not included. Add them from the actual plan, policy, or vendor quote rather than forcing a generic percentage into the statutory model.
Payroll, entity, and EOR fees
A payroll provider or Employer of Record charges for a service route. That fee is not a statutory contribution and is not included above. Entity formation, local permits, payroll setup, and professional support can also create one-time or recurring costs.
If you use an EOR, ask for the service fee, setup and offboarding fees, benefits, foreign-exchange treatment, and any contingency funding as separate lines. Borderless explains the broader route on its Philippines EOR page and in the country hiring guide.
Employee deductions
Employee SSS, PhilHealth, Pag-IBIG, and income-tax withholding reduce take-home pay. They are not extra employer costs, so they do not appear in the employer burden above. Keep the net-pay calculation separate from the employer budget.
Turn the estimate into a quote
Give your payroll provider, local entity team, or EOR these inputs:
- The employee's fixed basic salary, allowances, bonus, and commission terms.
- Work location, sector, employer size, worker class, age, and work schedule.
- Start date, pay frequency, leave policy, and whether the salary already includes any supplemental pay.
- Expected overtime, night, rest-day, or holiday work.
- Optional benefits, equipment, and allowances.
- The chosen hiring route and every service, setup, foreign-exchange, and offboarding fee.
- Any known leave, retirement-plan, or termination facts that require a reserve.
Then ask for one itemized view of recurring employment cost, a separate first-year cost, and the employee's net-pay statement. That keeps salary, statutory employer costs, employee deductions, one-time costs, and service fees from being mixed together.
Questions employers ask
What does “cost to hire” include in these examples?
It includes 12 months of assumed fixed basic salary, 13th-month pay, employer SSS and MPF, Employees' Compensation, PhilHealth, and Pag-IBIG. It does not include recruiting, optional benefits, equipment, service fees, setup, or event-driven obligations.
Why does the included employer burden fall at higher salaries?
SSS and Pag-IBIG have already reached their caps in all three examples. PhilHealth reaches its ceiling at ₱100,000 of monthly basic salary. As salary rises above those limits, capped contributions make up a smaller share of the total, while 13th-month pay continues to track basic salary.
Does the estimate include employee income tax?
No. Income-tax withholding and the employee shares of SSS, PhilHealth, and Pag-IBIG come from employee pay. They belong in a net-pay calculation, not in employer burden.
Does the estimate include an Employer of Record fee?
No. An EOR fee depends on the provider and service scope. It should appear as a separate line beside salary and statutory employment costs.
Do the same numbers apply across the Philippines?
The contribution formulas are national, but wage floors vary by region, sector, employer size, and effective tranche. Salary structure, schedule, employee classification, leave events, benefits, and the hiring route can also change the budget.
Get a Philippines hiring quote
The worked examples give Finance and People teams a defensible starting point. A quote should confirm the employee's facts, show every statutory line, and keep the Borderless service fee separate.
Get a Philippines hiring quote or book a demo to review the role, salary, benefits, and hiring route.
