Wednesday, December 17, 2008

Manpower Costs

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Manpower Costs


The laws on labor standards and employment relations are consolidated in the Labor Code of the Philippines. The salient points of employment conditions and employee benefits under the Philippine labor laws are as follows:

Hours of Work.
Eight (8) hours per day or 48 hours per week. Rest periods of short duration during work hours shall be counted as hours worked.

Work Day. A day is the 24-hour period which commences from the time the employee regularly starts to work.

Minimum Wage (Manufacturing Sector).
The minimum wage rate for agricultural and non-agricultural workers in every region are determined by the Regional Tripartite Wages and Productivity Board.

Fringe Benefits. This refers to goods, services, or other benefits furnished by an employer in cash or kind, in adddition to basic salaries; to managerial or supervisory employees such as but not limited to the following:

· Housing

· Expense Account

· Vehicle of Any Kind

· Household personnel, such as maid, driver and others

· Interest on loans at less than market rate to the extent of the difference between
the market rate and actual rate granted;

· Membership fees, dues and other expenses borne by the employer for the
employee in social and athletic clubs or other similar organizations;

· Holiday and vacation expenses

· Educational assistance to the employee or his dependents; and

· Life or health insurance and other non-life insurance premiums or similar amounts
in excess of what the law allows

Managerial employees refer to those who are given powers or prerogatives to lay down and execute managerial policies and or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees.

Supervisory employees are those who effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requirres the use of independent judgment.

Overtime (OT) Remuneration. Overtime premium is alloted for work exceeding the maximum prescribed period. Every employee who is entitled to premium pay is likewise entitled to the benefit of overtime pay.

Computation of Wages.
Source: Bureau of Working Conditions
Department of Labor and Employment

Computing Overtime:
On Ordinary Days
Number of hours in excess of 8 hours (125% x hourly rate)

On a Rest Day, Special Day or Regular Holiday
Number of hours in excess of 8 hours (130% x hourly rate)

Computing pay for work done on:
A Special Day (130% x basic pay)
A Special Day, which is also a sheduled Rest Day (150% x basic pay)
A Regular Holiday (200% x basic pay)
A Regular Holiday, which is also a scheduled Rest Day (260% x basic pay)

Computing Night Shift Premium where Night Shift is a Regular Work:
On Ordinary Day (110% x basic hourly rate)
On a Rest Day, Special Day, Regular Holiday (110% of regular hourly rate for Rest Day,
Special Day, Regular Holiday)

Computing Overtime on Night Shift:
On Ordinary Day (110% x overtime hourly rate)
On Rest Day, Special Day or Regular Holiday (110% x overtime hourly rate for Rest Days,
Special Days, Regular Holidays)

Computing 13th Month Pay:
Total basic salary earned for the year exclusive of overtime, holiday, and night shift
differential pay divided by 12 = 13th month pay.

Night-Shift Differential Pay. Night-shift employees must be paid a differential of not less than 10% of the regular wage for each hour of work performed between 10:00 p.m. and 6:00 a.m.

Service Incentive Leave. Every employee who has rendered at least one year of service is entitled to a yearly service incentive of five days with pay.

Meal and Rest Periods. One-hour time-off for regular meals.


13th Month Pay.
By law, companies are required to give its employees a 13th pay equivalent to one (1) month salary.

Social Security System (SSS) Contributions. As Mandated by law, both employer and employees are to contribute for the social security benefits of the employees in accordance with the new schedule provided by SSS.

SSS Contribution Schedule - Effective January 1, 2007 (pdf file)
Source: Social Security System

Contribution to Home Development and Mutual Fund (HDMF). Companies/employers are also required to contribute at least P100.00 per month to HDMF for employee benefits. Companies/employers remit this contribution plus that of the employees's which will be deducted from their payroll, in accordance with the periodic remittance schedule provided by HDMF.

Contribution to National Health Insurance Program (NHIP). As mandated by Republic Act 7835 on Medicare Program which is administered by the Philippine Health Insurance Corporation (Philhealth), both employers and employees are to contribute for the medical insurance/benefits of the employees in accordance with the schedule provided by Philhealth.

Premium Contribution Schedule - For the Employed Sector - Effective January 1, 2007 (pdf file)
Source: Philippine Health Insurance Corporation

National Capital Region (NCR) a/
Per Wage Order No. NCR-13 b/
Effective 28 August 2007
(In pesos)


Basic Wage After COLA Integration

Basic Wage Increase

New Minimum Wage Rates





Agriculture (Plantation & Non-Plantation)




Private Hospitals

with bed capacity of 100 or less




Retail/Service Establishments
Employing 15 workers or less




Manufacturing Establishments
Regularly employing less than (10) workers




a/ Covers the cities of Caloocan, Las Pinas, Makati, Malabon, Mandaluyong, Manila, Markina, Muntinlupa, Paranaque, Pasay, Pasig, Quezon, Taguig, San Juan, Navotas and Valenzuela and the Municipality of Pateros.

b/ Grants a P12.00 per day basic wage increase to all minimum wage workers in the private sector in the r egion. The existing P50.00 per day COLA under Wage Order Nos. NCR-09 and NCR-10 is integrated in to the basic wage of covered workers.

Source:National Wages and Productivity Commission
Department of Labor and Employment

Non-Agriculture, Agriculture
As of March 2008
(In pesos)


WO No. /
Date of Effectivity





NCR a/

WO 13 /
Aug. 28, 2007

325.00 – 362.00



CAR b/

WO 12 /
Jan. 07, 2008

233.00 – 245.00

216.00 – 227.00

216.00 – 227.00

I c/

WO 12 /
Dec. 31, 2007

210.00 – 230.00



II d/

WO 12 /
Nov. 25, 2007

215.00 – 223.00

203.00 – 211.00

203.00 – 211.00

III e/

WO 13 /
Sep. 27, 2007

236.00 – 287.00

221.00 – 257.00

201.00 – 241.00

IV-A f/

WO 12 /
Oct. 05, 2007

224.00 – 300.00

204.00 – 275.00

184.00 – 255.00

IV-B g/

WO 03 /
Nov. 25, 2007

225.00 – 237.00

188.00 – 197.00

168.00 – 177.00

V h/

WO 11 /
Dec. 01, 2007

183.00 – 226.00

194.00 – 204.00

174.00 – 184.00

VI i/

WO 15 /
Oct. 05, 2007

215.00 – 235.00

195.00 – 203.00


VII j/

WO 13 /
Nov. 11, 2007

205.00 – 250.00

185.00 – 232.00

185.00 – 232.00


WO 14 /
Dec. 16, 2007




IX l/

WO 14 /
Jan. 23, 2008




X m/

WO 13 /
Nov. 16, 2007

229.00 – 244.00



XI n/

WO 14 /
Sep. 16, 2007

248.00 – 250.00

238.00 – 240.00

217.00 – 219.00

XII o/

WO 14 /
Oct. 08, 2007





WO 08 /
Nov. 07, 2007





WO 09 /
Aug. 04, 2006




a/ Granted a P12 per day wage increase after integration of the P50 COLA to the basic pay;
b/ Granted P10 wage increase and integrated into the basic wage the P51 COLA granted
under WO Nos. 5, 9 & 10;
c/ Granted P3-13 wage increase and integrated into the basic wage the P12 COLA granted
under WO No. 10;
d/ Granted P5 wage increase;
e/ Granted P9 COLA;
f/ Granted P6-13 wage increase as follows: P10-13 (Growth Corridor Area),
P8-9 (Emerging Growth Area), P6 (Resource Based Area);
g/ Granted P2-16 wage increase;
h/ Granted P6 wage increase;
i/ Granted P4-41 wage increase due to simplification to be given in three tranches:
P4-16 (Oct. 5, 2007), P8-15 (May 1, 2008, P7-11 (Sep. 16, 2008);
j/ Granted P5 & P9 wage increase;
k/ Granted P14 wage increase and integrated into the basic wage the P18 COLA granted
under WO Nos. 11 & 12; P2-14 in selected sectors due to restructuring;
l/ Granted P15 wage increase and integrated into the basic wage the P20 COLA granted
under WO No. 12;
m/ Granted P10 additional COLA;
n/ Granted additional P10 COLA;
o/ Granted P3-5 additional COLA;
p/ Granted P6 COLA;
q/ Granted P10 wage increase and P10 COLA (cash or non-cash) and integrated into the
basic wage the P10 COLA granted under WO No. 8.

Source: National Wages and Productivity Commission
Department of Labor and Employment


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