John Jonas answers listener Daniel's questions about paying Filipino contractors/employees for benefits and PTO. Key points: SSS, PhilHealth, and Pag-IBIG are government programs paid quarterly with employer reimbursement typically done quarterly and reimbursements covering only the employee (dependents may be covered under the same membership without extra cost). Private HMO premiums are usually paid annually; employer may require employees to pay upfront and reimburse annually; employers typically don't demand repayment if the employee leaves within the year. PTO practices: 10 days vacation and 5 days sick time mentioned; accrual is less common in the Philippines but acceptable if employer prefers; local norm often requires a waiting period (3–12 months) before benefits start. External resources: onlinejobs.ph pages for Holidays, Benefits, and Taxes.
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Welcome to the Secret Sauce of Outsourcing podcast that's dedicated to making you better at outsourcing to the Philippines. This is episode 344, paid time off and benefits questions answered. So I got an email from Daniel asking for more information about PTO and benefits. And I'm going to give you some. I'm going to give some answers here and then I'm going to give you where you can get more. You can get the full story because I'm not going to cover it all on this podcast. So Daniel has a growing team of ofs. He, he asked me these questions because he wanted to make sure that the benefits that he was providing was fair for everybody involved. So these are the same answers I gave him. I'm going to give them to you, including his questions. So he says, number one, PhilHealth, SSS and Poggibig Fund are all government programs. If the employee is paying for these, is it paid on a monthly basis? Do you in turn reimburse the employee on a monthly basis? Is the reimbursed amount just for them or their dependents? So here's my answer to that. These government programs, SSS, PhilHealth, Poggibig, are paid on a quarterly basis. So they pay them and we reimburse them quarterly. The reimbursement is just for them. On these programs, children and people over 65 can be combined onto one person's poggy big SSS and PhilHealth. So Filipinos don't pay more for their kids and elderly parents. Next question. Private HMO plans seem to be more popular as well, but it seems these are paid annually for the most part. Do you require your employee to pay for an annual premium first and then reimburse them for the whole year's premium at once? Is there any requirement for that to be repaid if they quit in a certain timeframe? So my answer, yes, I require them to pay the annual premium all at once, and we reimburse that all at once. If they quit or let go within that year, then I don't require them to pay it back. Now, the reason is because that almost never happens. I think it's only happened to us once where someone left after we had paid those premiums. It's just not that big of a deal to me. His third question. Lastly, for PTO, we are offering 10 days vacation and 5 days sick time. We have this set up on an accrual basis, similar to how we treat our US Staff. But I've heard some feedback that in the Philippines, it is less common to require the contractors to accrue the PTO versus simply offering it every year and they can use it on whatever schedule they need. Thoughts on this? So, yeah, accrual isn't common in the Philippines, but if it's a system that you're comfortable with, your OFS will adapt and they won't mind. Just having a job that offers any PTO is more important to them than how it's implemented. Now, typically in the Philippines, they require someone to have worked for three months or six months or a year before any of these benefits are offered at all. So that's a little bit different than in the US where benefits typically start immediately. In the Philippines, they require a certain amount of time before the benefits start to kick in. Okay, so now let me give you two other things that you can look at. So for paid time off, I talk about that at onlinejobs ph Holidays, where we talk about holidays and paid time off, because those are similar things. So onlinejobs Ph Holidays is really a comprehensive guide to how we handle and how other people handle paid time off and Philippines holidays, which there's a lot of them. Next, onlinejobs Ph Benefits is a document that we created that covers all of the potential benefits that you could offer to someone in the Philippines. In the document right at the beginning, we say, look, every one of these is optional, but here's the most important one. If you're gonna offer one, here it is. If you're gonna offer two, here's the second. Most important, here's the third, and it goes down the list. That guide is pretty comprehensive. And if you're interested in benefits, onlinejobs Ph Benefits Another thing that this is completely outside, but something that people are interested in, onlinejobs ph Taxes is how we handle our team in the Philippines on our taxes. Now we're in the U.S. but so far, I mean, I've only talked to thousands of people around the world. I've never seen it handled any other way. It is a simple deduction on your taxes. It's super duper simple. So OnlineJobs ph Holidays OnlineJobs ph benefits OnlineJobs ph taxes.
