Leaves/benefits – understanding the costs of labor FAQ (v2022-1)
In addition to the basic pay of my employees, what are the other benefits that I must provide?
In general, you are required to provide:
- paid leaves;
- employer’s share in contributions for social security, Pag-ibig (gov’t housing), Philhealth;
- holiday pay;
- thirteenth month pay.
If sometimes, the workload is high and I ask my employees to work longer or during holidays, what additional benefits do I need to look out for?
You need to be aware of the legal requirements for:
- night shift differential,
- payments for work on holidays.
How many paid leaves are required by the law?
An employee must provide at least five days service incentive leave (convertible to cash, if unused).
Am I required to also provide paid sick leaves?
No. However, the employee may apply the service incentive leave/s to still receive payment for the sick leave.
What other leaves are required?
- Paid Maternity leave of 105 days (120 days for solo moms) + 1 month of unpaid maternity leave;
- Paternity leave – 7 of the 105 days mentioned above can be applied as paternity leave;
- Parental leave (7 days paid parental leave for registered solo parents) (RA 8972 - Solo Parent’s Welfare Act);
- 10 day leave for women victims of domestic violence (RA 9262 – Anti Violence Against Women and Children);
- 2 month paid leave for women following surgery caused by gynecological disorders (Required by the Manga Carta for Women).
Do I have to shoulder the cost of the leaves above?
In general, no. The SSS will cover the cost. However, be ready to advance the payment and apply for reimbursement of the cost from the SSS. Also, check in advance always with the SSS on what paperwork is required to avail of the benefits as the regulations change from time to time.
Can I provide more than five service incentive leaves and more than 13 month pay?
Yes. However, note that once you provide the benefit, you generally cannot take it back – even during times that business income may become lower.