Guide to onboarding in the

PHILIPPINES

Interested in hiring employees in the Philippines? It’s never been easier.

In this guide, we cover a few tips and advice to ensure easy integration of your new hire:

  1. Pre-boarding

  2. First week and beyond

  3. Easy compliance with local laws and regulations

Pre-boarding

  • Lay the groundwork with clear Standard Operating Procedures (SOP), personal preference documents, and realistic expectations. This proactive approach streamlines the onboarding process and minimises confusion.

  • Initiate the onboarding journey with a detailed orientation call. Cover essentials like log-ins, communication styles, SOPs, and initial tasks. Encourage open dialogue to clarify expectations and set the tone for future interactions.

  • Invest in the right software. Utilise collaboration tools, communication software & video conferencing platforms (e.g. Slack or Teams), and project management software to facilitate communication and teamwork.

First week and beyond

  • Establish clear goals for the first week, month, and beyond. Schedule regular check-ins to provide feedback, answer questions, and address any concerns.

  • Provide role-specific training, access to learning resources, and opportunities for professional development.

  • Foster a sense of belonging by encouraging social interactions through virtual coffee chats, online team activities, and buddy programs.

  • Clearly communicate company expectations, policies, and procedures to avoid confusion.

  • Time tracking isn't for everyone. While some companies find it valuable, others, including us, feel it can be intrusive and goes against the Filipino work culture.

    It is your choice, but we suggest focusing on results, not hours. Regardless of the method, you can often assess someone's productivity based on their work output.

  • Schedule regular one-on-one meetings and team meetings to maintain open communication and foster a sense of connection.

  • In the Philippines, all employees get a bonus once a year of one month’s pay - the "13th month". This is essentially an extra month's salary paid annually in December. While it coincides with Christmas, it's not technically a Christmas bonus. Employers can still offer additional Christmas bonuses if they choose.

    Legally, you're not obligated to pay the 13th-month pay. However, it's strongly recommended as it's an anticipated part of employees' income and helps them cover regular expenses throughout the year.

Easy compliance with local laws and regulations

In the Philippines, hiring a remote worker couldn’t be easier. It doesn’t require you to establish a local legal entity and since virtual assistants are considered independent contractors, they are expected to manage their own affairs.

Here are some further details:

  • You have the option to use any payment platform that works for your business. Many clients use platforms such as PayPal, but any platform will work.

    We recommend adopting a fixed monthly salary for employees, which resonates well with Filipino preferences and has proven effective in our experience.

    Nevertheless, the decision ultimately lies with you. Just make sure to communicate clearly with the employee prior to hiring.

    Above all, prioritise fair compensation, irrespective of the payment model chosen.

  • Taxes couldn’t be simpler when hiring remote employees in the Philippines.

    Here's a rundown of what we think you should be aware of:

    • No need to worry about tax forms, withholding, or governmental regulations on your end.

    • Technically, your Filipino hires are considered independent contractors and do not fall under the full-time employee classification. Consequently, you're not required to offer benefits or unemployment insurance, nor can you classify them as employees in your country.

    • Your remote hires are responsible for managing their tax filings in the Philippines. Employers like yourself from foreign countries are not obligated to handle any Filipino tax-related paperwork.

    Note: We're unable to offer professional tax advice, so consider these insights for informational purposes only. For personalised and comprehensive tax guidance, we recommend consulting with a qualified tax professional.

  • Given that your business operates outside the Philippines and is not formally registered there, you are not obligated to provide benefits like healthcare, insurance, social security, or a 13th salary check.

    Your company has the flexibility to choose to offer additional allowances and perks to your employees beyond their salary.

    That being said, at HireOffshore.com we always advise employers to consider implementing such benefits after a probationary period of three months.

  • Perks often plays an important role in attracting top talent and nurturing strong employee loyalty over time. But, you have the autonomy to offer bonuses and benefits as you see fit.

    Below are some popular perks you may consider providing:

    Healthcare: Consider adding a healthcare stipend to your remote hire’s compensation package. This can help cover their Government’s National Healthcare Scheme Premiums or contribute towards a private health insurance plan (HireOffshore.com’s guide = 5% of basic salary).

    Social Security and HDMF: Consider reimbursing your remote employee’s monthly contributions to the Social Security System (SSS) (HireOffshore.com’s guide = 9.5% of base salary) and the Home Development Mutual Fund (HDMF) (Pag-IBIG Fund) on a regular basis (HireOffshore.com guide = 2% of base salary).

    13th-Month Pay: It's customary for Filipino employees to receive an additional month's pay during the holiday season, known as the 13th-month pay (HireOffshore.com guide = 8.33% of base salary).

    Technology Allowance: Given their remote work setup, offering an allowance for hardware upgrades or internet expenses can be beneficial. Additionally, if specific paid applications are necessary for their tasks, covering the subscription fees is part of your responsibility (HireOffshore.com’s guide = Mid-range laptop + a 2nd monitor set up cost of AUD 1150 (USD 750) + an ongoing AUD 60 (USD 40)/month for a high-speed internet connection).

    Shared workspace: Consider providing access to a shared co-working space for your remote hires. This can offer them a professional environment to work from, fostering productivity and collaboration with other professionals in various industries (HireOffshore.com’s guide = AUD 30-300 (USD 20-200)/month).

    Performance Bonuses: Implementing quarterly performance evaluations allows you to recognize and reward your VAs for meeting key performance indicators and targets.

While much of the compliance with local laws is managed by your remote hire in the Philippines, HireOffshore.com recommends all businesses take the following steps when recruiting a Filipino virtual employee:

  • Request monthly invoices from your hires to document payment transactions,

  • Talk to your accountant about the tax implications of hiring a remote Filipino worker,

  • For US-based companies, we do recommend filling out a W8-BEN form. This document certifies that they're foreign nationals receiving payments for services rendered in the US. Retain a copy for your records to substantiate legitimate business expenses.

  • For Australian-based employers, if your business provides IT services and your Filipino recruit is providing IT services on your behalf, you must lodge a Taxable payments annual report to the Australia Tax Office, reporting payments to contractors.

  • Some advisors suggest including a signed statement from each hire in your records. This statement confirms their work location outside your country and their provision of services solely abroad. While not an official form, a brief statement with the hire's name, date, and signature suffices. This precautionary measure is primarily for audit purposes.