Offshore Compass

Philippines

Philippines employer cost calculator: what an employee costs you each month

Last checked: October 28, 2026

General information only, not legal, tax or payroll advice. Rates and wage orders change; check the official source before you run payroll. Legal, licensing, tax and company-secretary work goes through licensed providers.

The short version

  • On top of salary, a Philippine employer pays its share of three contributions: SSS (10% of the monthly salary credit, plus a ₱10 or ₱30 EC contribution), PhilHealth (2.5% of monthly basic salary, within a ₱10,000 floor and ₱100,000 ceiling) and Pag-IBIG (2% of the monthly Fund Salary, up to ₱200 a month). [S1][S2][S3][S4]
  • Employers also owe rank-and-file employees who worked at least one month in the calendar year a 13th-month pay of at least one-twelfth of the total basic salary earned in that year. Spread over 12 months, that adds about 8.3% to the basic salary. [S5]
  • Rule of thumb from our worked examples below: for a Metro Manila minimum-wage employee on a 6-day week (monthly floor = daily rate × 313 ÷ 12), the employer's monthly cost is about 22% above the salary. (Our arithmetic from the worked examples below.)
  • This page covers mandatory items only. It leaves out HMO/health cards, rice or meal allowances, night-shift differential, overtime, holiday pay, equipment and any EOR or agency fee.

Calculator

Monthly basic salary₱40,000.00
SSS employer share (10% of MSC ₱35,000.00)₱3,500.00
EC (employer)₱30.00
PhilHealth employer share (2.5%)₱1,000.00
Pag-IBIG employer share₱200.00
13th-month accrual (÷ 12)₱3,333.33
Total monthly employer cost₱48,063.33
Total annual cost (monthly × 12, 13th month counted once)₱576,759.96
Employee deductions (withheld from pay, not an employer cost): SSS / PhilHealth / Pag-IBIG₱1,750.00 / ₱1,000.00 / ₱200.00

Mandatory items only. Our arithmetic, not payroll, tax or legal advice.

How each item is calculated

SSS (Social Security System)

  • Total contribution rate is 15% of the monthly salary credit (MSC): 10% employer, 5% employee. [S1][S2]
  • The MSC runs from ₱5,000 to ₱35,000 in ₱500 steps. Your MSC is the bracket your monthly compensation falls in (for example, ₱19,250–₱19,749.99 maps to an MSC of ₱19,500). [S1]
  • The part of the MSC above ₱20,000 goes to the Mandatory Provident Fund (MPF), at the same 10%/5% split. [S1]
  • Employers also pay the Employees' Compensation (EC) contribution: ₱10 when compensation is below ₱14,750 and ₱30 at ₱14,750 and above. [S1]
  • Top bracket (compensation of ₱34,750 and up): employer pays ₱3,530 (including EC); employee pays ₱1,750. [S1]

PhilHealth

  • Premium is 5% of monthly basic salary, shared equally: 2.5% employer, 2.5% employee. For daily-paid employees, monthly basic salary is the DOLE equivalent monthly rate, which for a 6-day week is daily rate × 313 ÷ 12. [S3][S5]
  • Salary floor ₱10,000 (minimum total premium ₱500) and ceiling ₱100,000 (maximum total premium ₱5,000). [S3][S3b]

Pag-IBIG (HDMF)

  • Employer pays 2% of the monthly Fund Salary (basic salary plus other allowances), capped at ₱10,000, so the employer share is at most ₱200 a month. The employee also pays 2% (1% if earning ₱1,500 or less), up to ₱200. [S4]

13th-month pay

  • At least one-twelfth of the total basic salary earned in the calendar year, for rank-and-file employees who worked at least one month in that year, paid no later than December 24 (an employer may pay half before the school year opens and the rest by December 24). [S5] The calculator shows it as a monthly accrual (basic salary ÷ 12).

Minimum wage (the salary floor)

Daily minimum wages for private-sector workers (Metro Manila and Davao: non-agriculture rate; Cebu: Class A rate for Expanded Metro Cebu), converted to a monthly floor with daily rate × 313 ÷ 12, assuming a 6-day work week (313 paid days a year, DOLE's factor for daily-paid employees who don't work and aren't paid on rest days). DOLE uses a 261-day factor for a 5-day week, which gives a lower monthly figure. [S5]

City (wage region)Daily minimumMonthly floor (× 313 ÷ 12, 6-day week)Source
Metro Manila (NCR)₱755₱19,692.92Wage Order NCR-28, effective Sep 26, 2026 [S6]
Cebu City (Region VII, Class A)₱582₱15,180.50Wage Order ROVII-27, effective Oct 14, 2026 [S7]
Davao City (Region XI)₱540₱14,085.00Wage Order RB XI-24, second tranche effective Sep 1, 2026 [S8]

Rates as listed on NWPC's regional pages on October 28, 2026. Wage orders change; check the NWPC page for your region before you set pay. [S6][S7][S8]

Worked examples (employer cost per month)

Our arithmetic from the rates above, rounded to the centavo; actual payroll may round differently. The three minimum-wage columns use the 6-day-week monthly floor (daily rate × 313 ÷ 12).

Manila minimum (6-day week)Cebu minimum (6-day week)Davao minimum (6-day week)₱40,000 salary
Monthly basic salary₱19,692.92₱15,180.50₱14,085.00₱40,000.00
SSS MSC used₱19,500₱15,000₱14,000₱35,000 (max)
SSS employer share (10%)₱1,950₱1,500₱1,400₱3,500
EC (employer)₱30₱30₱10₱30
PhilHealth employer share (2.5%)₱492.32₱379.51₱352.13₱1,000.00
Pag-IBIG employer share₱200₱200₱200₱200
13th-month accrual (÷ 12)₱1,641.08₱1,265.04₱1,173.75₱3,333.33
Total monthly employer cost₱24,006.32₱18,555.05₱17,220.88₱48,063.33
Cost above salary+21.9%+22.2%+22.3%+20.2%

Employee-side deductions, for reference (withheld from pay, not an employer cost): SSS ₱975 / ₱750 / ₱700 / ₱1,750; PhilHealth same as the employer share; Pag-IBIG ₱200 each. [S1][S3][S4] Withholding on compensation is out of scope for this page.

What's not included

HMO, allowances, overtime, night shift differential (an extra 10% of the regular wage for each hour worked between 10 PM and 6 AM, under Labor Code Art. 86) [S5], holiday and rest-day premiums, service incentive leave, separation pay, equipment, office or EOR/agency fees. These can add materially to the real cost.

Next steps

Sources