What running payroll in the Philippines involves

Wages are paid at least twice a month at intervals not exceeding 16 days. In practice most employers pay on the 15th and the end of the month.

This is a legal requirement rather than a convention, and it catches foreign employers used to monthly cycles in 2 ways: cash planning around 2 dates rather than 1, and international transfer lead times that need to land reliably on both.

Delays in wage payment are treated seriously. This is not an area where an occasional late run is absorbed quietly.

Income tax on compensation is deducted by the employer and remitted to the Bureau of Internal Revenue. It is not the employee's responsibility to settle it afterwards.

This is one of the most common misunderstandings among foreign employers, who pay gross and assume the individual handles their own tax. Where an employment relationship exists, withholding is the employer's obligation, and failure to withhold does not transfer the liability to the employee.

Annual reconciliation and the issuance of the relevant certificates to employees also sit with the employer.

SSS, PhilHealth and Pag-IBIG each require registration, contribution at their own rates, and remittance on their own timetable. Each has an employer portion and an employee portion, and the employee portion is deducted from pay.

Contribution schedules are set by the agencies and are revised from time to time, which means a payroll process that was correct 2 years ago may not be correct now. This is a maintenance obligation rather than a setup task.

All 3 contributions are capped, which is why total statutory employer cost falls as a percentage as salary rises, landing roughly in the 11 to 16 percent range depending on seniority.

Mandatory under Presidential Decree 851 at 1 twelfth of annual basic salary, roughly 8.33 percent, payable by 24 December.

Pro rated for anyone who joins or leaves during the year, which means it forms part of final pay for leavers.

Calculated on basic salary. Whether particular allowances form part of basic is a question worth resolving correctly rather than assuming, because getting it wrong understates the obligation every year.

Employees are entitled to a payslip showing earnings and deductions.

Employers are expected to maintain payroll records. This matters beyond compliance: in any dispute about wages, hours or entitlements, the records are the evidence, and an employer without them is in a materially weaker position than one with them.

The same principle runs through Philippine employment generally. Substance and documentation decide outcomes, not intentions.

Whoever is legally the employer.

If that is your own Philippine entity, it is your finance function, your registrations and your remittances, which is one of the reasons the entity decision is usually deferred until a team reaches roughly 10 to 15 people. Setting one up generally requires around USD 200,000 in paid-up capital under the Foreign Investments Act and up to 5 months.

If the employment sits with a licensed local entity that is not yours, the payroll obligations sit there too, and you pay a single invoice from abroad.

What does not work is a foreign company paying a Philippine based full time team member directly by transfer and treating the obligations as somebody else's problem. There is no version of that arrangement where the obligations do not exist.

This is general information rather than legal or tax advice.