The Only Guide You'll Need For All Mandatory Employee Benefits In The Philippines

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Work comes with its perks!

For many employees, the benefits of a job are just as important as the job itself. Whilst others may offer unique perks, it’s important to know the full range of mandatory employee benefits in the Philippines. 

Mandatory Employee Benefits In The Philippines

Source: Shutterstock

Mandatory Employee Benefits In The Philippines

Mandatory Employee Benefits In The Philippines

Source: Shutterstock

As a first-time employee, you’ll need to be acquainted with the Department of Labor and Employment’s Labor Code. After all, if know your rights you can avoid any cases of not being compensated properly for your services. And we’ll run through a comprehensive list that will have you covered.

Wage and compensation benefits

First of all, it’s really important knowing your worth! The Wage Rationalization Act (Republic Act No. 6727) gives clear guidelines of the daily minimum wage set for all sectors. Here’s a table that shows exactly how much people are entitled to depending on where they work and in which industry.

Region Non-Agriculture Agriculture – Plantation Agriculture – Non-Plantation
NCR ₱454.00 – 491.00 ₱454 ₱454
CAR ₱255.00 – ₱285.00 ₱255 – ₱270 ₱255 – 270
Region I ₱213.00 – ₱253.00 ₱233 ₱227
Region II ₱260.00 – ₱300.00 ₱280 ₱280
Region III ₱238.00 – ₱357.00 ₱298 – ₱334 ₱298 – ₱334
Region IVA ₱219.00 – ₱362.50 ₱267- ₱337 ₱267 – ₱317.50
Region IVB ₱210.00 – ₱280.00 ₱230 – ₱235 ₱230 – ₱235
Region V ₱248.00 – ₱265.00 ₱248 ₱248
Region VI ₱256.50 – ₱298.50 ₱266.50 ₱266.50
Region VII ₱275.00 – ₱353.00 ₱275 – ₱335 ₱275 – ₱335
Region VIII ₱235.50 – ₱262.00 ₱241 ₱235
Region IX ₱235.00 – ₱280.00 ₱255 ₱235
Region X ₱291.00 – ₱318.00 ₱291 – ₱306 ₱291 – ₱306
Region XI ₱286.00 – ₱317.00 ₱307 ₱307
Region XII ₱255.00 – ₱275.00 ₱257 ₱257
Region XIII ₱248.00 – ₱268.00 ₱268 ₱268
ARMM ₱255.00 – ₱265.00 ₱255 ₱255

13th Month Pay

The 13th Month Pay is a monetary benefit that all employees are entitled to, as long as you’ve worked at least a month in your job. If you’ve worked for twelve months with perfect attendance (no unauthorised absences), you basically get a full month’s salary. So let’s say you earn ₱25,000 per month. 

(₱25,000 x 12)/12 = ₱25,000 13th month pay

But what if you took maternity leave for 2 months? Then it gets worked out like this:

(₱25,000 x 10)/12 = ₱20,833.33

Whilst it will be subject to how much you’ve worked, everyone is entitled to 13th month pay.

Retirement Pay

Mandatory Employee Benefits In The Philippines

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Once you hit 60, you’re entitled to Retirement Pay if you’ve worked at the same company for at least 5 years. It’s equivalent to one half-month of salary for every year you’ve served the company.

The Retirement Pay is calculated according to these terms:

  • 15 days salary based on the latest salary rate
  • Cash equivalent of 5 days of service incentive leave (SIL)
  • One-twelfth (1/12) of the 13th month pay

So a working example looks like this:

Daily rate: ₱1,000

Years of service: 10

Time calculated: 1/2 month (15 days) + SIL (5) + 1/12 13th month pay (2.5 days) = 22.5 days

Retirement Pay: ₱500

₱500 x 22.5 x 10 = ₱112,500

Overtime pay

Mandatory Employee Benefits In The Philippines

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Overtime is counted if anyone works beyond an 8 hour work day. The standard rate is 25% of your hourly pay. If anyone works on their approved leave day or on a public special holiday, they receive the standard 25% plus an additional 30% on top of that.

Night Differential

Applicable to anyone who works between 10pm and 6am. An additional 10% is added per hourly wage (e.g. normal hourly wage of ₱50 becomes ₱55 for Night Differential).

Leave benefits

Employees are entitled to a yearly Service Incentive Leave of five days with pay (applies to employees who have worked with a company for 1 year).

Maternity leave

Mandatory Employee Benefits In The Philippines

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A pregnant woman who has worked with a company for at least six months will be given six weeks total maternity leave: two weeks prior to the due date and four weeks after normal delivery or miscarriage. Full pay is given at normal salary rate.

60 days total is given for government employees, whilst employees in the private sector are granted 60-80 days maternity leave.

Maternity Leave benefit is effective for the first four deliveries of a female employee.

Paternity leave

The R.A No. 8187 (Paternity Leave Act approved in 1996) allows seven days of full-paid leave. This is also effective for the first four deliveries.

Mandatory government benefits and contributions

Every employee has government contributions regularly deducted from their salary: Social Security System, Pag-IBIG, and PhilHealth benefits.

Social Security System (SSS) benefits

SSS is an insurance program that helps protect workers against any work-related illnesses or injury resulting in disability or death. Compensation for medical equipment, appliances and supplies, rehabilitation services, and income cash benefit.

Pag-IBIG benefits

This benefit provides employees the ability to apply for loans, like Housing, Multi-Purpose and Calamity (for a full list, visit their website).

PhilHealth benefits

PhilHealth is an insurance benefit that provides financial assistance to employees who need long-term medical treatment.

For the full list of mandatory employee benefits in the Philippines, see the Department of Labor and Employment’s handbook.

 

So these are the mandatory employee benefits in the Philippines! Next time your employer neglects to mention one of these, you can claim it since you now know your rights!

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Written by

Vinnie Wong