Payroll Management: A Key Responsibility of the EOR
In the Philippines, payroll management is a subsystem of labor laws that are rigorous and dictate what employees should be paid, what the legal deductions are, and how taxes are filed. Imprudent payroll management means that companies pay fines, get in legal trouble, or experience discontent from their workforce. An Employer of Record offers a complete solution to payroll management, ensuring compliance with local regulations by businesses.
- Timely and Accurate Salary Payments
An EOR’s main function is making wages payments exactly and in time which is an area of performance. The labor laws of the country set the form of payment. That is, a company can pay its employees either weekly bi-weekly, or monthly depending on the payroll schedule. In the Philippine Labor Code, the pay periods for which payments must be made are heavily prescribed with the failure to follow resulting in penalties.
Payment processing and correct payment differentials to employees for late or incomplete payroll will now be the EOR’s responsibility. This also includes overtime pay, bonuses, and deductions. While the EOR is at the helm of payroll management, firms can steer clear of common problems including late payments or disparities in compensation that may trigger employee dissatisfaction.
- Handling Tax Withholding and Filing
Philippine tax laws demand the employers to withhold the income tax of workers and remit it to the Bureau of Internal Revenue (BIR). Taxes are not constant and this is derived from how much the worker makes. The employer, on the other hand, sees to it that the computation is correct and the payment is done on time.
An EOR is a third-party solution that manages the full extent of all tax-related duties, such as:
Withholding income tax: The EOR figures out the correct amount of tax to be deducted from each employee’s salary depending on how much the staff got that month and the tax category.
Settling taxes: They guarantee remittance of all taxes to the BIR on time to avoid unnecessary fines from late filing.
Submission of tax reports: Abiding to the rule of avoidance of withholding taxes, the EOR takes on the challenge of the filing of the monthly, quarterly, and yearly tax returns, thus guaranteeing full adherence to governmental tax regulations.
An EOR not only can oversee the tax process, but also can significantly minimize the margin of errors and help businesses to meet their tax responsibilities.
Benefits Management: Ensuring Compliance with Local Requirements
In the context of the management of payroll, according to Philippine labor laws
The legal requirement by employers is to provide the employees certain statutory benefits, the most common of which are Social Security System (SSS), PhilHealth, and Pag-IBIG Fund, as well as paid leave and the 13th-month pay. The process of administration of these benefits can be quite foreboding, especially to companies that have never quite understood the local requirements.
An EOR works out that all the employee benefits are decently run and in compliance with the law.
- Mandatory Social Security Contributions
Employers in the Philippines are mandated to withhold and contribute to the Social Security System (SSS) on behalf of their employees. This is a solid government program that assures workers the availing of benefits in case of sickness, disability, maternity and retirement.
The EOR computes the correct contributions to SSS for both the employer and the employee, takes the employee's share from their salary and delivers the full sum to the SSS. Hence, the above-mentioned measures might be employed so that both employees will have a certain amount of social security while businesspeople are to abide by the respective local regulations.
- PhilHealth Contributions
PhilHealth is a health fund that all citizens of the Philippines have to pay to employers who are then responsible for their workers. Housing care, outpatient health services, and surgical treatment are some of the healthcare services that PhilHealth covers for the employees.
The EOR makes it a point that the right PhilHealth contributions are paid for each employee allowing them to utilize the health services that are commanded by the government. The EOR coordinates the pay deductions and remittances, therefore, the administrative work for the businesses is reduced.
- Pag-IBIG Fund Contributions
The Pag-IBIG Fund is a gov-yard program for the security of accessible housing loans for the workers. Both employees and employers have a duty to contribute to this fund, the contribution rate is based on the employee's salary.
The EOR oversees the Pag-IBIG fund, where employees are qualified for both the housing loans and other benefits featured in the referred program. By looking at the funds, the EOR assures that the businesses stay in line with the laws of the Philippines.
Managing Other Employee Benefits
Moreover, rather than the compulsory fees, the labor code of the Philippines legally entitles the employee to a variety of other benefits such as paid leaves, 13-month pay, and bonuses. An EOR is the person responsible for these loans, making sure that employees are receiving that which is with the law.
- 13th-Month Pay
Employment in the Philippines also has one different requirement that makes it unique and quite rare, which is giving every worker, all the more, a monthly check equivalent to the workers' 13th month salary annually, which by law must be done prior to Christmas. Not doing so will lead to punishments and legal consequences.
The EOR processes and distributes the 13-month salary which is collected for a small business and makes sure that the payment complies with the statutory mechanism. The EOR is also accountable for making sure all other bonuses and incentive programs are processed, managed, and disbursed accurately.
- Paid Leave
Employees in the Philippines have the right to enjoy various paid leave benefits such as:
Sick leave: Paid leave for sickness or other medical reasons.
Vacation leave: Paid time off for travel or other personal reasons.
Maternity and paternity leave: Paid leave for the new parents.
A representative of the Philippine Employer of Record is responsible for managing the employees' entitlement of paid leave in compliance with the Philippine Labor Code. This includes maintaining records of leave balances, reviewing leave applications, and making sure the personnel receive due arrears while on leave.
Conclusion
Employers in the Philippines are challenged with payroll and employee benefits and Employer of Record services in Philippines
are there to help businesses, especially those that are new to the labor laws in the country. Ultimately, an Employer of Record (EOR) is a tool for business chiefs by changing over the payroll obligations to their shoulders, such as dealing with appropriate tax obligations, to various statutory participation such as social security, healthcare, and leave that are paid for an employee as well.
Azure Gaming Technologies can thus focus on their operations and the also other critical complex issues by the Employer of Record catering for payroll and benefits legally. They can accomplish this not only by displaying local law compliance but also by saving themselves the penalties and legal issues of business expanding into the Philippines. Thus, an EOR seems to be an essential ally of the companies in this case.