Hiring in the Philippines from Australia

On this page (7 sections)

Overview
Australia and the Philippines at a glance
The differences that matter most
Common compliance traps
How an EOR works in the Philippines
FAQs
Sources

PHPLocal currency

ManilaCapital

PHT (UTC+8), 2 to 3 hours behind SydneyTime difference

Overview and why companies expand from Australia to the Philippines

The Philippines has a large, English-speaking workforce experienced in customer support, operations, accounting and creative services.
A two to three hour time difference means Filipino teams can work Australian business hours without night shifts in many cases.
Labour costs are lower than in Australia, which makes it attractive for support and back-office functions.
Many Australian small and medium businesses already work with Filipino team members, so practices are well established.

For Australian employers, the Philippines combines an excellent talent pool with a protective legal framework. Once probation ends, employees gain security of tenure, which means they can only be dismissed for a just or authorised cause and after due process. Mandatory benefits such as 13th month pay and government contributions also need to be built into budgets from the start.

Australia and the Philippines at a glance

Summary only. Figures were checked against the official sources listed below on 2026-10-08. Many rules depend on the employee's award, contract, state or province.
Topic	Australia	Philippines
Employment contracts	A written contract is not legally required but is standard practice. Employers must give every new employee the Fair Work Information Statement, plus the Casual or Fixed Term Contract Information Statement where relevant. A modern award or enterprise agreement usually sets minimum terms. Fixed-term contracts are generally limited to 2 years or 2 consecutive contracts.	Governed by the Labor Code. Employees become regular employees after probation, which gives them security of tenure. Labour-only contracting is prohibited.
Probation	No statutory probation. In practice the unfair dismissal "minimum employment period" works as one: 6 months, or 12 months for small businesses with fewer than 15 employees.	Up to 6 months. The employee must be told the standards for regularisation at the start, otherwise they are treated as regular from day one.
Working hours	Maximum 38 ordinary hours a week plus reasonable additional hours under the National Employment Standards. Awards set overtime rates. Employees have a right to disconnect outside working hours unless refusing is unreasonable.	Normal hours of 8 a day. Overtime is paid at a premium of at least 25%, and night shift work between 10pm and 6am attracts a 10% differential, which matters for teams supporting Australian business hours.
Minimum wage	National Minimum Wage of $26.44 an hour ($1,004.90 a week) from 1 July 2026. Most employees are covered by a modern award with higher minimum rates for their classification.	Set by regional wage boards. In the National Capital Region the non-agricultural minimum is ₱695 a day from 18 July 2025.
Annual leave	4 weeks paid annual leave a year for full-time employees (5 weeks for some shift workers), accruing progressively. Untaken leave is paid out on termination. Many awards add a 17.5% leave loading.	5 days service incentive leave after 1 year of service, convertible to cash if unused.
Sick leave	10 days paid personal/carer's leave a year for full-time employees, plus 2 days unpaid carer's leave and 2 days paid compassionate leave per occasion. All employees can also take 10 days paid family and domestic violence leave a year.	No separate statutory sick leave beyond service incentive leave. SSS pays a sickness benefit to eligible members.
Parental leave	Up to 12 months unpaid parental leave after 12 months of service, with the right to request 12 more. The government funds up to 26 weeks of Parental Leave Pay at the national minimum wage from 1 July 2026, paid through Services Australia rather than the employer.	105 days paid maternity leave under the Expanded Maternity Leave Law, 7 days paid paternity leave for married fathers and additional leave for solo parents.
Public holidays	National public holidays such as New Year's Day, Australia Day, Good Friday, Easter Monday, Anzac Day, Christmas Day and Boxing Day, plus state and territory holidays. Employees who work on a public holiday are usually paid penalty rates under their award.	Regular holidays and special non-working days are proclaimed each year. Work on a regular holiday is paid at 200%.
Retirement and social security	Superannuation Guarantee of 12% of qualifying earnings, paid by the employer on top of wages. Since 1 July 2026 super must be paid each payday and reach the fund within 7 business days (Payday Super). There is no separate employer social security levy.	Social Security System contributions of 15% of monthly salary credit (10% employer, 5% employee) from January 2025, plus PhilHealth and Pag-IBIG contributions. A statutory retirement pay applies at 60 to 65 if no better plan exists.
Payroll taxes	Employers withhold PAYG income tax from wages. Each state and territory charges payroll tax once total Australian wages pass a threshold, for example 5.45% above $1.2 million in NSW and 4.85% above $1 million in Victoria. Workers' compensation premiums are also payable.	Employers withhold income tax and file returns with the Bureau of Internal Revenue.
Notice periods	Employer notice under the National Employment Standards: 1 week (up to 1 year of service) rising to 4 weeks (over 5 years), plus 1 week if the employee is over 45 with at least 2 years of service. Pay in lieu is allowed. Awards set employee notice.	Employees must give 30 days notice of resignation. For authorised-cause terminations such as redundancy, the employer must give 30 days written notice to the employee and the Department of Labor and Employment.
Dismissal protection	Unfair dismissal protection applies after the minimum employment period to employees covered by an award or agreement, or earning under the high income threshold of $190,100 (from 1 July 2026). General protections against adverse action apply from day one. Small businesses can follow the Small Business Fair Dismissal Code.	Security of tenure applies once regular. Dismissal needs a just or authorised cause and due process, including a two-notice procedure for just causes.
Severance	Statutory redundancy pay of 4 weeks (1 to 2 years of service) rising to 16 weeks (9 to 10 years), then 12 weeks at 10 years or more, when long service leave usually takes over. Small businesses with fewer than 15 employees are generally exempt.	Separation pay for authorised causes, generally 1 month's pay or 1 month per year of service for redundancy, and half a month per year for retrenchment, whichever is higher.
Mandatory benefits	Superannuation, workers' compensation insurance (state-based and compulsory), paid leave under the National Employment Standards and long service leave under state and territory laws, usually after 7 to 10 years of service.	13th month pay of at least one twelfth of basic salary earned in the year, paid by 24 December, plus SSS, PhilHealth and Pag-IBIG.
IP and restraint clauses	Post-employment restraints are only enforceable if reasonable to protect a legitimate business interest. Employers generally own IP that employees create in the course of employment. The federal government has proposed banning non-compete clauses for employees under the high income threshold from 2027; this was not law at the last review.	Non-competes can be enforced if reasonable as to time, place and trade. Confidentiality and IP assignment clauses are standard.
Visas and right to work	Every worker needs Australian work rights, which employers can check through VEVO. Sponsored skilled hires generally use the Skills in Demand (subclass 482) visa, which needs an approved sponsor. Some EORs can sponsor, many cannot.	Foreign nationals generally need an Alien Employment Permit from the Department of Labor and Employment and a work visa.

The differences that matter most

Security of tenure

After probation, regular employees can only be dismissed for causes listed in the Labor Code, such as serious misconduct or redundancy, and the employer must follow due process. For just causes, that means a written notice explaining the grounds, an opportunity to respond and a second written notice of the decision.

Mandatory 13th month pay

Every rank-and-file employee is entitled to at least one twelfth of their basic salary for the year, paid by 24 December. Budget for it as part of the annual cost.

Night shift differential

Teams that support Australian business hours usually work daytime hours in Manila, but any work between 10pm and 6am attracts at least a 10% night shift differential. Overtime is paid at a premium of at least 25%.

Government contributions

Employers contribute to SSS (10% of monthly salary credit from 2025), PhilHealth and Pag-IBIG, and withhold income tax. These replace the role of super in Australia.

Regional minimum wages

Regional wage boards set minimum wages. In the National Capital Region, the non-agricultural daily minimum is ₱695 from 18 July 2025. Rates in other regions are lower.

Common compliance traps

Long-term contractors who are employees in substance, leading to regularisation claims.
Missing the probation standards at the start, which can make the employee regular from day one.
Late or missing 13th month pay.
Dismissals without the two-notice process, which can lead to reinstatement and back wages.
Labour-only contracting, which is prohibited and can make the client the employer.

How an EOR works in the Philippines

A Philippine EOR employs your hire through its local entity, issues a compliant contract with clear regularisation standards, registers the employee with SSS, PhilHealth and Pag-IBIG, runs payroll with tax withholding and pays 13th month pay. You manage the work. For larger teams, Australian companies sometimes set up their own Philippine entity or use an established business process outsourcing provider instead.

Frequently asked questions

Can I hire Filipino workers as contractors?

Many Australian businesses do, but if you control the work, hours and tools in a long-term, full-time role, the person may legally be an employee under Philippine law. Misclassification can lead to claims for regularisation, benefits and separation pay. An EOR gives you a compliant employment model.

What is 13th month pay?

All rank-and-file employees in the Philippines are entitled to 13th month pay of at least one twelfth of the basic salary earned during the year, paid no later than 24 December.

What happens at the end of probation?

Probation can last up to 6 months. If the employee keeps working after it ends, they become a regular employee with security of tenure. The employer must tell the employee the standards for regularisation at the start of employment.

Do I have to pay extra for night shifts?

Yes. Work between 10pm and 6am attracts a night shift differential of at least 10% of the regular wage. Overtime and work on rest days and holidays also attract premiums.

What government contributions apply?

Employers register employees with and contribute to the Social Security System, PhilHealth and Pag-IBIG. From January 2025, the SSS contribution rate is 15% of monthly salary credit, with the employer paying 10%.

Sources

Last reviewed: 2026-10-08

Figures on this page were checked against these official sources on 8 October 2026. Rates and thresholds change, often on 1 January, 1 April or 1 July, so confirm current figures before relying on them.

New to the model? Start with what an Employer of Record is, then compareEOR costs and pricing models.