Employment contract in the Philippines: Template, Key Clauses and Local Law (2026)

What a Philippine employment contract is, and what local law requires An employment contract in the Philippines sets out the terms of work between an employer and an employee. The governing law is the Labor Code of the Philippines (Presidential Decree No. 442), administered by the Department of Labor and Employment (DOLE). The Labor Code is protective of employees, and several of its rules cannot be contracted below. Key rules to build around: - Security of tenure. A regular employee can be dismissed only for a just or an authorized cause, and only with due process. You cannot remove this by contract.

• Probationary employment. Probation usually cannot exceed six months. The standards the employee must meet to become regular must be made known at the time of engagement. If the employee keeps working past six months, or the standards were never communicated, the employee generally becomes regular.
• Hours and overtime. Normal hours are up to 8 a day. Work beyond that is overtime, paid at a premium, with higher rates for rest days, holidays and night work. Employees are entitled to a weekly rest day and, after a year, to five days of service incentive leave if no better benefit is given.
• 13th month pay. Under Presidential Decree No. 851, rank and file employees must receive 13th month pay, at least one twelfth of basic annual salary, on or before 24 December each year. Employers file a compliance report with DOLE.
• Minimum wage. Minimum wage is set by regional wage boards and differs by region, so check the current wage order for the workplace region. It cannot be contracted below.
• Mandatory contributions. Employers register employees and contribute to the Social Security System (SSS), PhilHealth and the Pag-IBIG Fund, and deduct the employee's share. This is general guidance, not legal advice. Confirm the current position with DOLE and the relevant agencies before you rely on any clause. Last verified October 2026. ## Philippines employment contract template Copy the block below and fill the bracketed fields. ``` EMPLOYMENT CONTRACT Made on [DATE] BETWEEN: [COMPANY NAME], with office at [address] ("Employer") AND [EMPLOYEE NAME], of [address] ("Employee") 1. POSITION The Employer engages the Employee as [JOB TITLE], with duties of [summary]. The Employee reports to [ROLE]. 2. STATUS AND PROBATION The Employee is engaged on a probationary basis for [up to six] months from [START DATE]. To become regular, the Employee must meet the standards set out in Schedule 1, made known at engagement. The Employee becomes regular on meeting them or on continuing past the period. 3. HOURS AND REST DAY Normal hours are 8 a day, [N] a week, with a meal break and one rest day each week. Overtime, rest day, holiday and night work are paid at the premiums the Labor Code sets. 4. COMPENSATION Basic salary of PHP [AMOUNT] per [month / day], not less than the applicable regional minimum wage, paid [twice a month] by [method]. 5. 13TH MONTH PAY The Employee receives 13th month pay as required by law, on or before 24 December each year. 6. MANDATORY CONTRIBUTIONS The Employer registers the Employee with and contributes to the SSS, PhilHealth and the Pag-IBIG Fund, and deducts the Employee's share. 7. LEAVE Service incentive leave of 5 days a year after one year of service [or a better leave benefit], plus statutory maternity, paternity and other leave as the law provides. 8. CONFIDENTIALITY AND IP The Employee keeps the Employer's confidential information secret and assigns to the Employer the rights in work created in the course of employment. 9. DISCIPLINE AND TERMINATION The Employer may discipline or dismiss only for a just or authorized cause under the Labor Code, with due process (notice and hearing). 10. GOVERNING LAW This contract is governed by the laws of the Republic of the Philippines. Signed: Employer: __________ Employee: __________

- **Hours and premiums (clause 3).** Keep to 8 hour days and pay the statutory premiums for overtime, rest day, holiday and night work. These are set by law, not by the contract.
- **Compensation (clause 4).** Pay at least the regional minimum wage for the workplace. Check the current wage order, because the figure differs by region and changes.
- **13th month pay (clause 5).** This is a legal right for rank and file employees, due on or before 24 December. Do not treat it as a discretionary bonus.
- **Termination (clause 9).** Dismissal needs both a valid cause and due process, usually a two notice process and a chance to be heard. A dismissal that misses either can be found illegal. ## Common mistakes to avoid - Letting probation run past six months or failing to set the regularization standards at engagement, which makes the employee regular.
- Treating 13th month pay as optional.
- Paying below the applicable regional minimum wage.
- Skipping SSS, PhilHealth or Pag-IBIG registration and contributions.
- Dismissing without a just or authorized cause and due process, which risks an illegal dismissal finding and reinstatement with back wages.
- Using repeated fixed term or project contracts to avoid regularization, which labour tribunals scrutinise closely. ## Just causes, authorized causes and separation pay Termination in the Philippines turns on the kind of cause. A just cause relates to the employee, such as serious misconduct, wilful disobedience, gross and habitual neglect, fraud or loss of trust. A dismissal for a just cause does not carry separation pay, but it still needs due process, usually a first notice setting out the ground, a chance for the employee to answer, and a second notice with the decision. An authorized cause relates to the business or the employee's health, such as redundancy, retrenchment to prevent losses, closure, or installation of labour-saving devices. An authorized cause dismissal needs a 30 day written notice to both the employee and DOLE, and it carries separation pay set by the Labor Code, which differs by cause. Getting the category and the process right matters, because a dismissal that lacks a valid cause or skips due process can be found illegal, exposing the employer to reinstatement and back wages. When in doubt, take advice before you act, not after. ## A note on jurisdiction and Adira's coverage Minimum wage orders and contribution rates change often and vary by region, so confirm the current figures with DOLE, the SSS, PhilHealth and Pag-IBIG. Adira is India first in its depth today and uses an international setting for other jurisdictions. Deep, verified Philippine coverage is on Adira's roadmap rather than established today, so treat any Philippine specific output as a draft to check locally. ## Where a contract workspace helps A template gets you a sound Philippine contract. The ongoing work is keeping every contract consistent across hires, tracking each probation end date so regularization is not missed, matching pay to the current regional minimum wage, and holding signed versions and key dates in one place. When drafting, review and tracking sit in one AI workspace tuned to how your company hires, the probation dates, minimum wage and contributions stay consistent across every Philippine hire, with edits made in plain language. [Adira](https://adiralaw.com) is one workspace built to work this way, with Philippine depth on its roadmap. This template alone is enough to put a fair contract in place today.