🇵🇭 Philippines Outsourcing

Outsource to Philippines: Hiring Software Engineers in Philippines

Philippines stands as an emerging economy with a thriving technology sector. Specializing in BPO services, Software development and Mobile apps, Philippines offers unique advantages for companies looking to expand their development teams globally.

Already found qualified software engineers or other talent to work with in Philippines? Hyperion360 can be your Employer of Record (EOR) in Philippines. Hyperion360 helps you pay your team members anywhere in the world. If we don't have a local entity in a particular country we have a vast network of payroll partners who can help allowing you to hire top talent almost anywhere in the world. Need help finding software engineers in Philippines? Contact us.

The Hyperion360 Talent Score for Philippines is determined by evaluating and averaging several key factors that influence the attractiveness and viability of hiring software engineers in the country. These factors are assessed on a scale from 1 to 10, where 10 represents the highest performance or most favorable conditions.

Hiring Software Engineers in the Philippines

Philippines: Southeast Asia’s BPO and Tech Leader

The Philippines has established itself as the world’s leading destination for business process outsourcing (BPO) and a rapidly growing hub for software development. With over 1.7 million IT professionals and strong English proficiency, the country offers exceptional value for technology outsourcing.

Top US Tech Firms Outsourcing to the Philippines

The Philippines hosts numerous US technology companies leveraging the country’s skilled workforce and favorable business environment:

Major US Companies with Operations in the Philippines:

• IBM - Major operations in Manila and Cebu providing software development and IT services
• Microsoft - Customer support and development teams serving Asia-Pacific markets
• Oracle - Development and support operations across database and cloud technologies
• Cisco - Technical support and engineering teams for networking solutions
• HP Inc. - Software development and technical support operations
• Dell Technologies - Customer support and technical services operations
• Concentrix - Major BPO operations serving technology companies globally
• Teleperformance - Customer experience and technical support services for tech clients
• Cognizant - Software development and digital transformation services

Why US Companies Choose the Philippines:

• English Proficiency: Highest English proficiency in Asia, with English as an official language
• Cultural Affinity: Strong understanding of American business culture and practices
• Cost Advantage: 60-80% cost savings compared to US-based operations
• Time Zone Coverage: Excellent coverage for US West Coast and Asia-Pacific operations
• Government Support: Strong government backing for IT-BPO industry growth
• Skilled Workforce: Growing pool of IT graduates from top universities

Key Facts About Hiring Software Engineers in the Philippines

• Large Talent Pool: The Philippines boasts a significant and growing pool of skilled software developers, supported by a strong educational system, with over 1.7 million professionals working in the IT sector.
• Cost-Effective: Hiring software engineers in the Philippines is highly cost-effective, offering excellent value for high-quality talent.
• Quality of Work: The Philippines has made substantial investments in its IT sector, resulting in a highly skilled and reliable workforce.
• Time Zone: The Philippines operates in a time zone that aligns well with many countries in Asia and Australia, facilitating real-time collaboration.
• Language: English is one of the official languages of the Philippines, and proficiency among IT professionals is generally high, easing communication barriers.
• Ease of Doing Business: The Philippines is continuously improving its business environment, ranked 95th in ease of doing business.
• Innovative Tech Scene: The Philippines has a vibrant startup ecosystem, supported by government initiatives and a growing venture capital presence.
• Software Market Revenue: The Philippine software market has shown robust growth, generating significant revenue and expanding rapidly.
• Number of IT Companies: The country is home to numerous IT companies, ranging from small startups to large multinational corporations.
• Internet Infrastructure: The Philippines boasts a well-developed internet infrastructure with a high penetration rate. Major cities like Manila, Cebu, and Davao have robust broadband connectivity, supporting the needs of tech companies and remote work.
• Universities and Education: The Philippines’ top universities, such as University of the Philippines (UP), Ateneo de Manila University, and De La Salle University, offer highly regarded computer science and engineering programs. These institutions are known for their rigorous curriculum, research output, and strong ties with the tech industry, producing graduates who are well-prepared for the demands of the global IT market.

Benefits of Hiring Software Engineers in the Philippines

• Exceptional Technical Proficiency: Filipino software engineers are known for their strong technical skills and problem-solving abilities, excelling in programming languages such as Java, C#, JavaScript, Python, and PHP.
• Culture of Innovation and Creativity: The Philippines’ dynamic startup culture fosters innovation and creativity, positioning it as a leader in Southeast Asia’s tech landscape.
• Cost-Effective Talent: Hiring software engineers in the Philippines offers high value due to advanced technical education, good English proficiency, and competitive costs.
• Flexible Hiring Options: Hyperion360 provides various hiring options, including direct hiring through us or establishing a foreign entity in the Philippines with the assistance of our legal partners.
• Thriving Tech Scene: The Philippines’ tech ecosystem is filled with innovative startups and seasoned professionals, creating a fertile ground for collaboration and growth.

Benefits of Outsourcing to the Philippines

The Philippines is one of Southeast Asia’s fastest-growing markets, offering numerous advantages:

• A Robust Market: The Philippines’ diverse economy includes strong sectors in agriculture, services, and technology, contributing to rapid economic growth.
• Strategic Trade Access: As a member of the ASEAN Free Trade Area, the Philippines offers access to key Southeast Asian markets and benefits from regional trade agreements.
• Advanced Infrastructure: The Philippines has well-developed infrastructure, including extensive road networks, railways, and ports, supporting efficient business operations.

Common Pitfalls of Hiring Software Engineers in the Philippines

While the Philippines offers many benefits, there are some challenges:

• Economic Fluctuations: The Philippine economy, while growing, can experience fluctuations. Hyperion360 helps manage financial and legal aspects to mitigate these risks.
• Complex Tax System: Navigating the Philippine tax system can be intricate. Hyperion360 handles all tax-related matters, ensuring compliance and ease.
• Government Regulations: Adhering to local regulations can be challenging. Hyperion360’s expertise ensures you stay compliant with all legal requirements.
• Talent Competition: High demand for skilled engineers leads to competition. Hyperion360’s extensive network and staffing solutions help you secure top talent quickly and efficiently.
• Cultural Differences: Understanding and adapting to Philippine business culture is crucial. Hyperion360’s team extension services bridge these gaps, ensuring smooth cultural integration and effective communication.

Hyperion360’s tailored solutions address these challenges, enabling you to successfully hire and manage software engineers in the Philippines with confidence and ease.

Business Etiquette in the Philippines

Understanding cultural nuances is vital for successful business interactions in the Philippines. Here’s a detailed guide to help you navigate these intricacies effectively:

Greetings

• Handshakes: A handshake is a common greeting in business settings. It is polite to greet everyone individually when arriving and leaving.
• Using Titles: Filipinos value respect and formality. Addressing people by their titles and surnames is common practice.

Communication Style

• Indirect Communication: Filipinos often communicate indirectly to avoid confrontation. Understanding subtle cues is important.
• Respect and Politeness: Showing respect and maintaining politeness is crucial in all interactions.

Timekeeping and Punctuality

• Punctuality: While punctuality is appreciated, meetings may start late. Patience is valued, and flexibility is often required.
• Networking: Small talk at the beginning of meetings is common to build rapport and trust.

Value on Relationships

• Personal Connections: Building strong personal relationships is essential. Trust and rapport are crucial for successful business dealings.
• Hierarchical Structure: Business structures are often hierarchical. Respect for seniority and titles is important.

Business Meetings

• Small Talk: Meetings often start with informal conversation to build relationships.
• Networking Focus: Use meetings to strengthen relationships as well as discuss business matters.

By understanding and respecting these cultural nuances, you can foster better relationships and ensure successful business interactions in the Philippines. Hyperion360’s tailored solutions help you navigate these cultural intricacies with ease, enabling seamless integration and collaboration with your Filipino team.

Employment Agreements

In the Philippines, while not mandatory, written employment agreements are strongly recommended to outline key conditions clearly. Essential elements to include are:

• Remuneration: Specify salary and any additional compensation.
• Job Description: Outline roles, responsibilities, and expectations.
• Working Hours: Define standard working hours and any flexibility.
• Place of Work: Mention the primary workplace and any remote work possibilities.
• Probationary Period: State the duration and conditions of the probation.
• Contract Type: Indicate whether the contract is fixed-term or indefinite-term.
• Company Policies: Include relevant workplace policies and guidelines.
• Travel and Transfers: Detail the conditions and possibilities for travel or relocation.

Some terms are automatically recognized under Philippine law, such as:

• The minimum wage
• Annual leave entitlement and vacation bonus
• 13th-month salary
• Social Security payment requirements
• Benefits provided by collective bargaining agreements

Probationary Periods in the Philippines

The maximum probationary period in the Philippines is six months. This allows employers to assess the suitability of the software engineer within a defined timeframe.

Philippines Payroll Laws

Tax Due Date

Individual taxes in the Philippines are due by April 15, following the calendar year for the tax period.

Payroll Cycle

The payroll cycle in the Philippines is generally monthly.

Working Hours

Standard working hours are eight hours per day and 40 hours per week.

Minimum Wage and Salaries

As of 2024, the minimum wage in the Philippines varies by region, with Metro Manila having one of the highest at PHP 610 per day.

Bonus Payments

Philippine labor law requires a 13th-month salary, typically paid before December 24.

Overtime

Overtime is compensated at 125% of the regular hourly wage, and at 130% on rest days and holidays.

Taxes and Social Security in the Philippines

Tax Thresholds in the Philippines

In the Philippines, individuals are considered tax residents if they stay in the country for more than 183 days in a calendar year. Tax residents are subject to tax on their worldwide income.

As of 2024, the Philippine income tax brackets are as follows:

• Up to 250,000 PHP annually: 0.00%
• 250,001 – 400,000 PHP annually: 15.00%
• 400,001 – 800,000 PHP annually: 20.00%
• 800,001 – 2,000,000 PHP annually: 25.00%
• 2,000,001 – 8,000,000 PHP annually: 30.00%
• Over 8,000,000 PHP annually: 35.00%

Corporate Tax Rate in the Philippines

As of 2024, the corporate tax rate in the Philippines is:

• General Corporate Income: 25%

Social Security Rates in the Philippines

In 2024, the social security rates for employees and employers are as follows:

Employer Payroll Contributions in the Philippines

Employers in the Philippines are responsible for several additional payroll contributions, which include:

• Social Security System (SSS): 9.50% of the employee’s salary (applied on income between 4,000 to 30,000 PHP monthly)
• Philippine Health Insurance Corporation (PHIC): 2.50% of the employee’s salary (monthly salary ceiling of 100,000 PHP)
• Home Development Mutual Fund (HDMF) (Pag-ibig): 2.00% of the employee’s salary (monthly salary ceiling of 10,000 PHP)
• Total Employment Cost: 13.50%

Employee Payroll Contributions in the Philippines

Employees in the Philippines also contribute to their social security as follows:

• Social Security System (SSS): 4.50% of their salary (applied on income between 4,000 to 30,000 PHP monthly)
• Home Development Mutual Fund (HDMF) (Pag-ibig): 2.00% of their salary (monthly salary ceiling of 10,000 PHP)
• Philippine Health Insurance Corporation (PHIC): 2.50% of their salary (salary ceiling of 100,000 PHP)
• Total Employee Cost: Up to 9.50%

Health Insurance in the Philippines

The Philippines offers a public healthcare system known as

PhilHealth, which provides basic health coverage. However, many individuals and companies opt for private health insurance to access higher-quality services and shorter wait times.

Pension in the Philippines

The Social Security System (SSS) administers the pension system in the Philippines. Employees must meet certain eligibility criteria for old-age retirement benefits:

• Eligibility: At least 60 years old with a minimum of 120 monthly contributions.

Paid Time Off in the Philippines

Annual Paid Leave

Philippine labor law guarantees employees annual paid leave of at least five days, known as Service Incentive Leave, if they have worked for at least one year.

Parental and Maternity Leave

• Maternity Leave: 105 days of paid leave for women, extendable by an additional 30 days without pay.
• Paternity Leave: 7 days of paid leave.

Sick Leave

Employers generally offer sick leave as part of their company policies.

Regional and National Holidays

The Philippines observes two types of holidays: Regular Holidays (with 200% pay if worked) and Special Non-Working Days (with 130% pay if worked):

Regular Holidays (Fixed Dates):

• New Year’s Day (January 1)
• Day of Valor (April 9) - Commemorates Fall of Bataan during WWII
• Labour Day (May 1) - Anniversary of 1903 labor rally
• Independence Day (June 12) - 1898 Declaration of Independence from Spain
• Bonifacio Day (November 30) - Birth anniversary of Andrés Bonifacio
• Christmas Day (December 25)
• Rizal Day (December 30) - Death anniversary of José Rizal

Regular Holidays (Movable Dates):

• Maundy Thursday (Thursday before Easter) - Part of Holy Week Triduum
• Good Friday (Friday before Easter) - Commemorates crucifixion of Jesus Christ
• Eid’l Fitr (varies) - End of Ramadan fasting month
• National Heroes Day (last Monday of August) - Commemorates 1896 Cry of Pugad Lawin
• Eid’l Adha (varies) - Islamic Festival of Sacrifice

Special Non-Working Days:

• Chinese New Year (January/February) - Lunar New Year celebration
• EDSA Revolution Anniversary (February 25) - 1986 People Power Revolution
• Black Saturday (Saturday before Easter) - Part of Easter Triduum
• Ninoy Aquino Day (August 21) - Assassination anniversary of Benigno Aquino Jr.
• All Saints’ Day (November 1) - Filipino families visit graves and honor deceased
• All Souls’ Day (November 2) - Continuation of All Saints’ Day traditions
• Feast of the Immaculate Conception (December 8) - Catholic celebration
• Christmas Eve (December 24) - Special working holiday
• Last Day of the Year (December 31) - New Year’s Eve

Local Holidays:

• Each city and province has additional local holidays for patron saints, founding anniversaries, and historical events
• Total holidays can exceed 30 days annually when including local observances

Religious Minorities Observances: The Philippines’ religious diversity includes various faith communities observing their traditional holidays:

Buddhist Holidays:

• Vesak (varies - Buddha’s Birthday)
• Chinese New Year (varies - celebrated by Filipino-Chinese community)
• Bodhi Day (December 8 - Buddha’s Enlightenment)

Hindu Holidays:

• Diwali (varies - Festival of Lights)
• Holi (varies - Festival of Colors)

Baha’i Holidays:

• Naw-Rúz (March 21 - Baha’i New Year)
• Ridván Festival (April 21-May 2 - Declaration of Bahá’u’lláh)
• Birth of the Báb (varies - Baha’i Faith)
• Birth of Bahá’u’lláh (varies - Baha’i Faith)

Jewish Holidays (small communities):

• Rosh Hashanah (varies - Jewish New Year)
• Yom Kippur (varies - Day of Atonement)
• Passover (varies - Pesach)

Protestant Holidays:

• Reformation Day (October 31 - Protestant churches)
• Various denominational observances

Indigenous Religious Observances:

• Various traditional ceremonies and festivals specific to different ethnic groups
• Ancestral worship observances in different regions

Note: While Islamic holidays (Eid’l Fitr and Eid’l Adha) are already recognized as regular holidays, other religious observances are celebrated by their respective communities and may affect workforce availability in areas with significant populations of these faiths.

Employment Benefits in the Philippines

The Social Security System (SSS) administers the country’s government benefits programs, which include old-age pensions, disability benefits, illness and injury benefits, and parental leave. The SSS collects contributions from employers and employees to maintain these social security benefits.

Termination and Notice Period in the Philippines

Employers must provide notice of termination as follows:

• Notice Period: 30 days for both employer-initiated and employee-initiated termination.

Upon termination without cause, the employer must pay severance equivalent to one month’s salary for each year of service.

Understanding these aspects of employment benefits in the Philippines helps you navigate the complexities of hiring and managing staff. With Hyperion360, you can ensure compliance with local regulations while optimizing your global staffing strategy. Enhance your workforce with top Filipino talent today!

Work-from-Home Arrangements and Remote Work in the Philippines

In response to the growing trend of remote work, the Philippines has implemented regulations to support flexible working arrangements:

• Legal Framework: Philippine labor laws allow for remote work arrangements, provided that both the employer and employee agree to the terms. The Telecommuting Act regulates remote work to ensure fair working conditions.
• Work Environment: Employers are responsible for ensuring that remote employees have a suitable work environment and necessary equipment.
• Health and Safety: Employers must ensure that remote workers adhere to health and safety standards, including ergonomics and regular breaks.
• Communication: Clear communication channels and regular check-ins are essential for remote work arrangements.

With Hyperion360 you don’t have to worry about compliance with local regulations for your Philippine team.

How Hyperion360 Can Help You Hire Software Engineers in the Philippines

Navigating the complexities of hiring and managing software engineers in the Philippines can be challenging, but Hyperion360 simplifies the process with our comprehensive global staffing services. When you partner with Hyperion360, you pay us directly, and we take on all the legal and compliance risks, managing every aspect of HR, benefits, payroll, and local taxes.

Our Services Include:

• Assuming Legal and Compliance Risk: Hyperion360 hires the software engineers directly, eliminating the legal risks of complying with Philippine law for your company.
• Managing HR Functions: We handle all HR-related tasks, from recruitment and onboarding to managing paid leave and termination, ensuring a smooth and efficient process.
• Administering Benefits: Hyperion360 oversees employee benefits, including health insurance, retirement plans, and other statutory benefits, ensuring your workforce is well-supported and highly engaged.
• Efficient Payroll Management: Our services include managing payroll cycles, payroll taxes, and bonus payments seamlessly. We handle all payroll processing, ensuring accuracy and timely payments for your software engineers.
• Handling Local Taxes: The monthly fee you pay us for software engineers is inclusive of local payroll taxes, benefits, legal, HR, accounting, etc., so you can focus on your core business operations.

Benefits of Partnering with Hyperion360:

• Access to Top Talent: Leverage our network to access a pool of highly skilled software engineers in the Philippines, ensuring you hire the best talent for your needs.
• Streamlined Processes: Our integrated approach simplifies the hiring and management process, reducing administrative burdens and allowing you to focus on strategic business goals.
• Cost-Effective Solutions: By managing HR, benefits, payroll, and compliance, we help you save time and resources, offering a cost-effective solution for expanding your team in the Philippines.
• Comprehensive Support: From recruitment to ongoing management, Hyperion360 provides full support to ensure your Filipino workforce is effectively managed and aligned with your business objectives.

With Hyperion360, you can confidently expand your tech team in the Philippines, leveraging our expertise to overcome common pitfalls and maximize the benefits of hiring skilled software engineers in this dynamic market.

Ready to hire software engineers in the Philippines? Contact us to learn more about how Hyperion360 can support your global staffing needs.

Employment Law and Regulations

Working Hours and Overtime

• Standard Hours: 8 hours/day, 48 hours/week maximum
• Overtime Pay: 125% for first 8 hours, 130% thereafter
• Vacation: 5 days annually minimum

Leave Policies

• Maternity Leave: 105 days paid
• Paternity Leave: 7 days paid
• Termination Notice: 30 days standard

Tax System and Compliance

Tax Rates

• Income Tax: 20-35% progressive
• Corporate Tax: 25-30%
• VAT/Sales Tax: 12%
• Social Security: 4.5% employee, 12.5% employer

Unique Country Facts

• World’s largest English-speaking workforce in Asia
• Global leader in Business Process Outsourcing (BPO)
• 7,641 islands with rich biodiversity
• Strong cultural ties with the United States
• Growing fintech and e-commerce sectors
• Strategic location in the Pacific Ring of Fire
• Home to world’s longest underground river (Puerto Princesa)

Employment Law and Regulations

Working Hours and Overtime

• Standard Hours: 8 hours/day, 48 hours/week maximum
• Overtime Pay: 125% for first 8 hours, 130% thereafter
• Vacation: 5 days annually minimum

Leave Policies

• Maternity Leave: 105 days paid
• Paternity Leave: 7 days paid
• Termination Notice: 30 days standard

Tax System and Compliance

Tax Rates

• Income Tax: 20-35% progressive
• Corporate Tax: 25-30%
• VAT/Sales Tax: 12%
• Social Security: 4.5% employee, 12.5% employer

Employment & Tax Insights

Employment & Tax Information

• Working Hours
• overtime pay.
• overtime work after 8 hours.
• overtime rate for first 8 hours and additional 195% of hourly rate on overtime work after 8 hours.
• vacation or sick leave. Unused SIL can be converted to cash at the end of the year.

Additional Country Insights

• The Philippines has the highest English proficiency in Asia
• Manila is one of the world’s most densely populated cities
• The country has over 7,000 islands
• The Philippines is a major outsourcing destination for US companies

💰 Realistic Salary Expectations vs US Costs

Philippines Developer Salaries (Fully Burdened)

⚠️ Critical: True Payroll Burden
Payroll taxes and mandatory benefits add 55-65% to base salaries.

Details: SSS + PhilHealth + Pag-IBIG + 13th month + other mandatory benefits

🇺🇸 US Cost Comparison

US equivalent roles cost $85,000-$165,000 fully burdened (including $30,000+ overhead per engineer for benefits, taxes, office space, equipment, and administrative costs).

Reality Check: Even with high payroll burdens, international hiring still provides 40-60% cost savings compared to US fully burdened costs.

Philippines Success Stories

What Tech Leaders Say About Hiring Developers in the Philippines

“Filipino developers have been a godsend for our team. Their English communication is excellent and they’re incredibly reliable. We can have detailed technical discussions, code reviews, and architecture planning sessions without any language barriers. The cultural fit with our US team has been excellent.”

Sr. Engineering Manager - E-commerce Company

“We’ve worked with developers from several countries but our Manila team stands out for their dedication and quality of work. They’re proactive, detail oriented, and genuinely care about the product. The time zone requires some adjustment but their flexibility to work night shift and English skills make it work smoothly.”

Founder/CTO - FinTech Startup

“The Philippines offers an excellent balance of cost, quality, and communication. Our developers there are skilled, professional, and their strong work ethic means projects get delivered on time and to spec.”

Director of E-commerce - Retail Company

🚀 Ready to Start Hiring in the Philippines?

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Related Resources

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Our Services

• Staff Augmentation - Scale your team with Filipino developers
• Team Extension - Extend your team with Filipino developers
• Contingency Recruiting - Find the perfect Filipino talent for permanent roles
• Contractor of Record (COR) - Hire Filipino contractors compliantly
• Employer of Record (EOR) - Employ Filipino developers without local entity

Helpful Resources

• Contact Us - Get started with your Philippines development team
• About Hyperion360 - Learn more about our company and mission
• Case Studies - See how we’ve helped other companies succeed

Ready to Hire Software Engineers in the Philippines?

Disclaimer: While we make every effort to research and update our country guides regularly, some information may be incomplete, inaccurate, or out of date. This content is provided for general informational purposes only and should not be relied upon as a substitute for professional advice. If you notice any errors or omissions, please let us know.