Many companies choose to work with a payroll service to make the process simpler and more convenient. It is important to consider the features, ease of use, cost, reputation, integrations and customer support to meet the needs of your company, while minimizing the amount of work required to get your business started.
In the Philippines, the standard practice across most industries is to process payroll on a bi-monthly basis (i.e. two times a month). While the specific dates for each payroll cycle are not governed by a mandatory requirement, many companies will opt for payroll to be paid on the 15th and 30th of each month. Others choose to pay out on the 5th and 20th of each month, it depends on the employer’s preference.
Are you considering choosing a new payroll provider? Here are some things to keep in mind when you search for a payroll provider.
1. Functionality and Amount of Time
A payroll processing solution should be easy to use and meet an organization’s specific objectives. You must examine the pay frequency of your company. Some companies pay their employees on a weekly, monthly, or bi-monthly basis.
2. Accessibility and Data Security
As with most business processes, on-site payroll processing may not always be possible. Some companies use cloud-based payroll processing to ensure that payment of employees, tax, and other requirements are made.
You can inquire about the services of 3rd party companies to access your employee private data and assess your payroll.
3. Technology
Payroll providers use a technology tool known as “middleware” to deliver their services.
4. Considerations and Contributions
An organization’s industry, workforce, fringe benefits, and reporting requirements can add considerable complexity for organizations of any size.
Employers must deduct and remit certain amounts of an employee’s salary each month on behalf of each of its covered employees to various government agencies. These contributions provide for a type of social security system to support employees when they retire, fall ill, require a loan or may be seeking to purchase a home.
There are three primary government agencies to which employers must make contributions on behalf of its employees:
- Social Security System (SSS)
This is an insurance program mandated by the Philippine government to cover all income earners or workers in the private sector.
- Home Development Mutual Fund, more commonly known in the Philippines as the Pag-IBIG Fund
This is a government and controlled corporation under the Department of Human Settlements and Urban Development of the Philippines responsible for the administration of the national savings program and affordable shelter financing for Filipinos.
- The Philippine Health Insurance Corporation, more commonly known as PhilHealth (government-run health insurance scheme).
5. Tax Compliance
For every payroll cycle, employers in the Philippines are required to deduct and withhold a certain value of an employee’s compensation before payroll is disbursed to employees.
The value of the amount withheld from all employees, accumulated across all payroll cycles during the month, must then be remitted by the employer to the BIR the following month.
In addition, employers must also file an annual tax return which outlines and confirms the total tax on compensation that the employer withheld from employees during the previous tax year.
6 . Human Resources
Payroll processing solutions can help provide employers with access to human resources professionals, literature, and documents to help ensure the start, maintenance, and conclusion of the employment process are appropriately managed.
7. Experience of Provider
There are a number of payroll providers in the Philippines. To choose your payroll provider, you need to know who their clients are in order to put faith in their service.
Composed of corporate experts such as lawyers, certified accountants, and business leaders, the FilePino Team can help you with tasks related to your business – including taking care of your bookkeeping and payroll needs.
FilePino offers a full array of cost-effective services guaranteed to help make establishing and managing new businesses in the Philippines easy for everyone.
Contact FilePino at +63.917.8922337, info@filepinostg.wpengine.com, or drop your inquiries here to get started.
