Employee benefits and leave in the Philippines

At a glance

Key figures with the official source for each, checked November 2026.

Annual leave: the statutory floor and the market norm

The only general paid leave in the Labor Code is service incentive leave (SIL) under Article 95. An employee who has completed at least one year of service gets five days with pay each year. The days can be used for vacation or sickness. Unused SIL is commuted to cash, including on resignation or separation, on a pro rata basis. Establishments that regularly employ fewer than 10 people are excluded from the SIL rule.

Five days is well below what the professional market offers. Employers in business process outsourcing, technology and multinational shared services commonly grant 12 to 15 days of vacation leave and a separate 12 to 15 days of sick leave. An employer that already gives at least five days of paid leave is treated as meeting the SIL requirement.

Points to settle in the leave policy:

• Whether leave is available from day one or after regularisation.
• How many unused days carry over and how many are paid out.
• Whether company leave is expressly credited against SIL.

Clear drafting matters because unused SIL is a money claim, and money claims can be filed for three years.

Public holidays and holiday pay

Holidays are fixed each year by presidential proclamation. Proclamation No. 1006 set ten regular holidays for 2026: New Year's Day, Maundy Thursday, Good Friday, Araw ng Kagitingan, Labor Day, Independence Day, National Heroes Day, Bonifacio Day, Christmas Day and Rizal Day. Eid'l Fitr (20 March) and Eid'l Adha (27 May) were added by separate proclamations, making 12. There are also eight special non-working days.

The two categories pay differently:

Overtime on these days adds 30% of the hourly rate for that day. Managerial employees are not covered by the holiday pay rules.

US-facing teams often work Philippine holidays and take US holidays off. That is lawful, but the premium for the Philippine holiday is still owed. Budget for it when setting the work calendar.

Sick leave and who pays

There is no statutory employer-paid sick leave beyond the five SIL days. Income protection for longer illness comes from the SSS sickness benefit.

To qualify, the employee must be unable to work and confined at home or in hospital for at least 4 days, must have at least 3 months of contributions in the 12 months before the semester of sickness, and must have used up company sick leave with pay for the year. The daily benefit is 90% of the average daily salary credit. It is payable for up to 120 days in a calendar year, and up to 240 days for the same illness.

The process runs through the employer:

• The employee notifies the employer within 5 calendar days of the start of home confinement.
• The employer notifies SSS within 5 calendar days of receiving that notice.
• The employer advances the benefit and SSS reimburses 100% where notice was on time.

Because salary credit is capped at PHP 35,000 a month, the SSS benefit replaces only part of a professional salary. That gap is why company sick leave is a standard benefit.

Maternity, paternity and family leave

The Expanded Maternity Leave Law (RA 11210) gives 105 days of leave at full pay for a live birth, regardless of civil status or the number of previous pregnancies. Solo parents get 15 more paid days. The mother may extend by 30 days without pay by giving written notice at least 45 days before the leave ends. Miscarriage or emergency termination of pregnancy carries 60 days at full pay. Up to 7 days can be allocated to the child's father or an alternate caregiver.

SSS pays a cash benefit based on salary credit. The employer pays the difference between that benefit and the employee's full pay. Small and distressed establishments can be exempt from the differential. Non-compliance carries fines of PHP 20,000 to PHP 200,000 and possible imprisonment.

Other statutory family leave:

• Paternity leave (RA 8187): 7 days at full pay for a married father, for the first four deliveries of his spouse.
• Solo parent leave: up to 7 working days a year after six months of service.
• VAWC leave (RA 9262): up to 10 days at full pay for women who are victims of violence.
• Special leave for women (RA 9710): up to 2 months at full pay after surgery for gynaecological disorders.

Mandatory insurance, pension and retirement pay

Every employee must be enrolled in three schemes funded by employer and employee contributions:

• SSS: retirement, disability, death, sickness, maternity and unemployment benefits. The unemployment benefit pays 50% of average monthly salary credit for up to 2 months after involuntary separation.
• PhilHealth: national health insurance.
• Pag-IBIG Fund: provident savings and housing loans.

The employer alone funds Employees' Compensation, which covers work-related injury, illness and death.

Separately from SSS, the Labor Code as amended by RA 7641 requires the employer to pay retirement pay where there is no retirement plan or the plan is less generous. An employee aged 60 to 65 with at least five years of service may retire and is owed at least half a month's salary for every year of service. Retirement is compulsory at 65. Half a month is defined as 22.5 days: 15 days' salary, 5 days of service incentive leave and one twelfth of the 13th month. Retail, service and agricultural establishments with 10 or fewer employees are exempt. This is a real long-term liability for employers building a permanent team.

Market-standard supplementary benefits

Statutory benefits set the floor. Offers in professional and BPO roles are judged on what sits above it. The usual package includes:

• HMO cover. Private health maintenance organisation membership for the employee, often with one or more dependants. PhilHealth alone is not seen as adequate cover, and candidates ask about HMO at offer stage.
• Vacation and sick leave. 12 to 15 days of each, in place of the five-day statutory minimum.
• Group life and accident insurance.
• Allowances. Rice, meal, transport, internet or clothing allowances. Some small benefits are tax-exempt as de minimis within BIR limits, which makes them an efficient way to deliver value.
• Night shift premium above the statutory 10%. Common for teams covering US hours.
• Performance or mid-year bonus. Bonuses share the PHP 90,000 annual tax exclusion with the 13th month.

Remote teams also need a telecommuting agreement under RA 11165, which requires that remote employees receive the same pay, leave and benefits as comparable on-site staff. Benefits written into contracts or given consistently over time can become company practice that the employer cannot withdraw unilaterally, so new benefits should be drafted with care.

Frequently asked questions

More on hiring in the Philippines

Employer of record and hiring guide for the Philippines · Payroll and taxes · Termination and notice · Contractors vs employees · Cost calculator · EOR vs PEO vs entity

Sources

• Labor Code of the Philippines (PD 442)
• Proclamation No. 1006, s. 2025: 2026 holidays
• Proclamation No. 1189, s. 2026: Eid'l Fitr
• RA 11210, Expanded Maternity Leave Law
• RA 8187, Paternity Leave Act
• Social Security System: sickness benefit
• DOLE Handbook on Workers' Statutory Monetary Benefits (2023 edition)
• RA 11199, Social Security Act of 2018

This page is general information, not legal, tax or immigration advice. Rates, thresholds and procedures change, and how they apply depends on the facts. Confirm current figures with a qualified adviser or with Dryft before acting. Checked November 2026.