As soon as a company starts a new location and acquires various products in the Philippines they must do the following: organize the employees' payroll and provide the benefit package. The main points of the joint Philippine legal structures are the salary and social security and employee benefits healthcare and retirement among others, which are the most comprehensive regulatory and the essay the law and tax and the social security and employee benefits healthcare and retirement among another services. Moreover, the issue could not be directly resolved; i.e. it might be a rather complicated procedure that the foreign companies, which are not always familiar with the law in the country, may be facing. For the last few years, even for the purpose of having new law-enforcement measures to organizations, governments throughout the world have been providing greater support to the umbrella companies.

 

Payroll Management: A Key Responsibility of the EOR

What labor laws do you follow as a payroll manager in the Philippines? What are your priorities regarding these laws? How do all these affect compensation of employees, legal deductions, and filing of taxes? Imprudent payroll means that companies have to face fines, legal problems, or even the loss of employees from their people. A  Philippine Employer of Record fully deals with payroll management, thus ensuring local regulations are observed by businesses.

 

1. Timely and Accurate Salary Payments

The country of the Philippines is politically controlled by laws that define the payroll management process, which besides the existing labor laws of the country are very detailed in the matters of salary payment, deductions, and taxes. For example, the extortion of these company payroll policies like timely payment means that businesses have to pay fines, they are lured into legal battles, and/or their workers show distrust in the management. An Employer of Record provides a wholly-casted payroll management plan with strict compliance with local rules.

Not to mention that an EOR’s major role is the most precise and timely payment of salaries which causes immediate positive differentiation. As per Labor Laws of the Philippines, all the government agencies should decide the form of payment for all employees. For one, a company can draw a payroll plan on whether employees decide to be paid by the week, bi-weekly, or monthly. The Philippine Labor Code also dictates the payroll periods that should be not more than forty-five days, the failing of which a fine would be paid.

Due to this new arrangement and the rather frequent payment errors, the company has been relieved of the task and the EOR is now responsible. It also includes issues of overtime pay, bonuses, and deductions. While the EOR is in charge of the payroll management, companies will not encounter problems such as delayed payments or discrepancies in the payment amounts that might lead to dissatisfied employees.

 

2. Handling Tax Withholding and Filing

The Philippines is the country that has laws in the payroll management policy. A part of it is the labor laws of the country that are very strict and specific about salary payment, deductions, and taxes regulation. Irresponsible payroll management of policies like on-time payment means that companies have to pay fines, they are forced into legal battles, and/or their workers show distrust in the management. An Employer of Record supplies payroll management plan complying with the local regulations.

Mostly, the task of an EOR is to pay salaries most precisely and on time, and because of this, their performance stands out. Token forms are both determined by the Filipino labor laws. Such as, a company can opt whether to pay its workers weekly, bi-weekly, or monthly which most employers prefer. The Philippine Labor Code prescribes that payroll periods shall comprise days of pay for which settlements must be done failing which the penalty will be charged to the perpetrator.

Processing and payroll problems that arise from staff overpayment or tardiness will belong to the EOR, not the company. The staff during their work and payment receive services of this company. Nevertheless, the EOR will only be responsible for the direction of payroll management, and the firms will not have to worry about issues such as late payments or differences in payment amounts that might lead to employee dissatisfaction.

 

Benefits Management: Ensuring Compliance with Local Requirements

Speaking of payroll management, as per the Philippine labor laws

 The prescribed duty of employers is that they make available to the employees certain statutory benefits, which are usual Social Security System (SSS), PhilHealth, and Pag-IBIG Fund, as well as paid leave and the 13th-month pay. Carrying out these benefits is a complicated process that may be particularly problematic for companies that are not familiar with the local requirements.

The EOR makes certain that the extensive employee benefits program is effectively functioning and is up to the legal requirements.

A Social Security Contribution is mandatory.

Employers in the Philippines are by the law taxed by giving SSS (Social Security System) equal to their employees' contributions and their own contributions. This is a reliable government program that provides assurance to the labor force in case of sickness, disability, maternity, and retirement to enlist benefits over the period.

The EOR deciphers the exact contributions to SSS for the employer and the employee, deducts the latter's share from their salary, and then gives the entire sum to the SSS. Consequently, these measures written above could be used so that all workers will have social security to a certain extent, and at the same time, the business people will have to follow legal regulations.

 

2. PhilHealth Contributions

PhilHealth is a health insurance that is obligatory for all the citizens of the Philippines to subscribe to pay their employers who thus become responsible for their employees. Outpatient health care, surgical treatment, and housing care are some of the health care services that PhilHealth ensures for its employees.

The employers make a point that the employees pay the exact contributions to PhilHealth that will allow them to get the services the government orders the hospitals to provide. The EOR (Employer of Record) permits for the Administrator to pay the fees and contributions on behalf of the employees, therefore the work of the employees is cut down on.

3. Pag-IBIG Fund Contributions

The Pag-IBIG Fund is a government program, which offers the loans for the workers with the guarantee of the Penitentiary for the security of the loans. Also, the employees pay their contributions to the fund. The contribution rate is calculated based on the employee's income.

The EOR is in charge of the Pag-IBIG fund, which is the fund for which employees are entitled to housing loans and other benefits offered in the specific program by the government. Through the inspection of the funds, the EOR keeps the businesses on the right side of the law in the Philippines.

Managing Other Employee Benefits

Moreover, apart from the mandatory payments, the labor code of the Philippines grants the employee the right to many other benefits like paid leaves, 13th month pay, and bonuses. The EOR manages these loans, headquarters, employees, and whose respective duties to ensure receipt of the dues prescribed by law.

 

1. Thirteenth Month Pay

Even though the US law has one distinct rule which is quite remarkable and very rare, that of giving out every employee, apart from other things, their extra month's income each year, or 13th salary, which has to be duly made offline, by the year's end, by every employer, is not normal in other countries. Failure will incur consequences for the workers and the company will be burdened with legal issues.

The EOR takes charge of the 13-month pay distribution and the proper disbursement of it, which is drawn from the collected accounting records for a small business in the Philippines. The EOR also deals with other bonuses and incentive programs and is responsible for controlling, accounting, and proper disbursement processes.

2. Paid Time-Off

Employees in the Philippines may take their paid leave benefits such as the following:

 Sick leave: Paid leave when an employee is sick or having other medical reasons and needs to be off work.

 Vacation leave: Paid time off for an employees' travel or other personal needs.

 Maternity and paternity leave: Paid leave for the new parents.

The Philippine Employer of Record

 shall establish the company that oversees the leaves of the employees and complies with the Philippine Employer of Record. The company is able to do it because of its quality and accuracy in record keeping of available leave balances, leave application reviews, and the payment of the due arrears of personnel on leave.

Conclusion

In the Philippines, employers have the Herculean task of being the manager for both their payroll and their employee benefits which is where the EORs of the Philippines come into the frame. This is such a good cause for those who want to deal with the labor laws with minimal knowledge. An Employer of Record (EOR) is, in fact, a chief manager of a business that will do all the payroll work, like submissions of the raised wage and deductions that the management will deduct to pay taxes. Expectant women can claim health benefits for some months at work if they are qualified to do so; this is in addition to the various holidays owed to employees. However, more time is demanded to execute this plan and as a result, employers will face higher tax rates. This, hence, raises the issue of the men's working conditions who cannot find job opportunities to sustain their families.