Hiring Your First Staff Member in the Philippines
Step-by-step overview of how to legally hire your first employee in the Philippines, including employer registrations, DOLE compliance, recruitment, contracts, payroll, and mandatory contributions.
What you’ll learn in this first staff hiring guide
This first staff hiring guide for small businesses in the Philippines explains employer registrations, DOLE compliance, recruitment, contracts, payroll setup, and mandatory SSS, PhilHealth, and Pag-IBIG contributions.
To prepare your documents and systems, see our Step-by-Step Guide to Essential Government IDs, SSS, PhilHealth, Pag-IBIG Employer Registration Guide, and Basic Bookkeeping and Accounting Guide.
To budget your total staff cost, you can also use our 13th Month Calculator to plan compliant bonuses, together with our Budget Calculator to estimate monthly salary plus SSS, PhilHealth, and Pag-IBIG contributions.
Quick Overview
To hire your first staff in a small business in the Philippines, you need to handle legal registrations, labor compliance, recruitment, and onboarding. Key government agencies include the Bureau of Internal Revenue (BIR), Social Security System (SSS), PhilHealth, Pag-IBIG, and the Department of Labor and Employment (DOLE). You must also prepare compliant employment contracts, payroll setup, and benefits remittance.
Register as an employer with BIR, SSS, PhilHealth, and Pag-IBIG
BIR (Income tax and withholding)
- Update your BIR registration to reflect that you now have employees.
- Secure or update employee TINs and link them to your business, typically via Form 2305 or similar forms.
- Prepare to withhold and remit compensation tax and file the corresponding BIR returns.
SSS, PhilHealth, Pag-IBIG (Social benefits)
- Register as an employer with SSS (e.g. Forms R1, R1A).
- Register with PhilHealth (e.g. ER1 and PMRF for employees).
- Register with Pag-IBIG (e.g. Employer Data Form and Member Data Forms).
Comply with DOLE and prepare the employment contract
- File the required DOLE Establishment Report, if applicable in your region/industry.
- Draft an employment contract that clearly states job title, duties, salary, work hours, probation period, benefits, and termination conditions.
- Ensure the contract is consistent with minimum wage rules, work hours, and benefits required by law.
Recruit and select the right candidate
- Define the role clearly: responsibilities, required skills, experience, and expected schedule.
- Post the job or tap your network and social media to find candidates.
- Screen resumes, conduct interviews, and run basic background checks where appropriate.
- Issue a written job offer with salary, benefits, and start date once you select a candidate.
Set up payroll, contributions, and remittances
Once hired, you need a simple payroll process that correctly computes salary, tax withholding, and mandatory contributions, then remits them on time.
- Compute gross pay, less SSS, PhilHealth, Pag-IBIG, and withholding tax based on current tables.
- Remit employer and employee shares to SSS, PhilHealth, and Pag-IBIG using their official forms and payment channels.
- Pay BIR withholding taxes and file corresponding returns.
Onboard your staff and prepare their workspace
- Prepare their workstation, tools, and access to systems before day one.
- Conduct orientation on company policies, schedules, break times, and communication channels.
- Introduce them to their manager and teammates and clarify expectations for the first 30–90 days.
- Plan initial training and check-ins to support their adjustment and performance.
Key Requirements
Documents and registrations
- BIR: updates via forms such as 1905 and 2305 for employee details.
- SSS: R1 (Employer Registration) and R1A (list of employees).
- PhilHealth: ER1 (Employer Data) and PMRF (Member Registration Forms).
- Pag-IBIG: Employer Data Form (EDF) and Member Data Forms (MDF).
Compliance and contracts
- Compliance with DOLE labor standards on wages, hours, and benefits.
- Written employment contract with job title, salary, probation, benefits, and schedule.
Fees and Typical Costs
- Employer contributions are roughly around 9.5% of salary for SSS, around 5% for PhilHealth, and about 2% for Pag-IBIG (rates and brackets change over time).
- Entry-level salaries commonly range from around ₱15,000 to ₱30,000 per month, depending on role and location.
- If you use a recruitment agency, fees can be around 15–25% of the employee's annual salary.
- Expect additional costs for onboarding, tools, software, and training.
Always verify the latest contribution tables and wage rules from official SSS, PhilHealth, Pag-IBIG, BIR, and DOLE sources.
Final Reminders
- Register properly as an employer before or as you hire your first staff member.
- Use clear, written contracts and follow DOLE labor standards.
- Set up a simple but consistent payroll and remittance process.
For complex cases, unique compensation structures, or questions on exact forms and amounts, consider consulting a tax or HR professional or coordinating directly with your BIR RDO and local DOLE office.