A part of running a company is ensuring your employee management responsibilities are up to standards. One of these responsibilities is making sure that your employees are well compensated and complying with the benefits mandated by the government.
Proper employee compensation is essential for smooth operations. Outsourcing payroll is valuable for startups and SMEs, allowing focus on core activities. It also benefits large enterprises that prefer to refrain from handling payroll internally. Below are the process and how we can help you with your payroll needs.
- What are the benefits of outsourced payroll processing?
- What are the Government Agencies that require mandatory contribution?
- What are the General Requirements we need from clients?
- What is our Process?
- What is the Timeline of our process?
- What We Offer?
- Frequently Asked Questions
Benefits of Outsourced Payroll
Outsourcing payroll services provides a wide array of benefits that can positively impact businesses of all sizes. Let’s delve into the significant benefits that come with entrusting payroll tasks to external service providers:
- Cost Efficiency. Outsourcing payroll can prove cost-effective by eliminating the necessity for an in-house payroll department, thereby reducing expenditures on salaries, training, and software expenses.
- Time Savings. By outsourcing payroll tasks, businesses can reclaim valuable time that would otherwise be consumed by intricate payroll calculations, tax filings, and the upkeep of regulatory compliance. Further, outsourcing in the Philippines is ideal, especially for US-based companies. The 12-14 hours difference means that you can entrust your payroll task to an outsourcing company when you leave for the day and everything is completed when you walk in the office the next day. In other words, it’s like running your company 24/7 which boosts your productivity.
- Accuracy and Compliance.> Outsourcing it to a Payroll Professional could mean your employees are paid accurately and timely. The competencies of these professionals possess deep expertise in tax laws, regulations, and compliance requirements, mitigating the potential for risk of errors and government penalties.
- Access to Technology. Outsourcing payroll grants access to advanced payroll software and technology that may be too costly for small businesses to invest in independently, leading to streamlined processes and improved efficiency.
- Focus on Core Activities. Entrusting payroll responsibilities to external service providers is a huge relief to companies that would rather focus on their core areas of expertise. Thus, they can direct their attention toward core activities, strategic goals, and client services, resulting in heightened productivity and enhanced overall business performance.
Government Agencies Required to Have Mandatory Contribution
Entities in the Philippines must make monthly contributions to the following government agencies:
- Bureau of Internal Revenue (BIR)
- Social Security System (SSS)
- Philippine Health Insurance Corporation (PhilHealth)
- Home Development Mutual Fund (Pag-IBIG)
Ensuring that your employees receive the mandated benefits is essential for every business, as it is a key step in complying with labor laws.
General Requirements We Need From Clients
Clients using our services must provide the following to finalize the payroll process:
- Copy of Business Registration Certificates (BIR, SSS, Philhealth and HDMF)
- Client’s Payroll Preferences (Cut-offs, Pay-out dates, Preferred OT Rates, etc.)
- Employee Database (Statutory and Salary information)
Our Process
Our payroll process goes through 4 steps.
Timeline of Our Process
To learn more about our payroll services, here’s an overview of our process and timeline:
| Estimated Timeline | Task | Responsible |
| 5 days before payout | Sending of payroll information (timesheets, attendance sheet, salary adjustments) | Client |
| 2 to 3 days before payout | Sending of payroll register to Client | InCorp PH |
| Payout date | Distribution of pay slips | InCorp PH |
| Monthly | Preparation of Government Forms and payment | InCorp PH |
What We Offer
Our team uses a cloud-based payroll software to calculate salaries, tax deductions, and government contributions, ensuring that all employees receive competitive pay and that mandatory contributions are correctly deducted and remitted.
We offer the following services to support your payroll processing and ensure timely generation of payslips in compliance with Philippine regulations:
- Calculating gross salary, tax deductions, and government contributions for each employee
- Generating payroll reports
- Issuing password-encrypted payslips to each employee via email
- Submitting final payroll reports to appropriate government offices
- Calculating final pay for resigned employees and issuing Certificates of Compensation
- Annualization of Taxes on Compensation and filing to the BIR
Let Us Help You With Your Payroll Needs
If you need assistance in payroll processing, you may reach out and our seasoned payroll specialists will be happy to help you with your needs.
Frequently Asked Questions
What are the government agencies that entities that companies must pay monthly contributions, as part of payroll processing in the Philippines?
All registered companies in the Philippines are required by law to pay monthly contributions to the following 4 government agencies:
- Bureau of Internal Revenue (BIR)
- Social Security System (SSS)
- Philippine Health Insurance Corporation (PhilHealth)
- Home Development Mutual Fund (Pag-IBIG Fund)
What are the 4 requirements that companies in the Philippines must fulfill in order to complete the payroll process?
Companies in the Philippines must fulfill the following 4 requirements to complete the payroll processes:
- Declare monthly salaries of all employees
- Provide electronic copies of payslips
- Pay tax dues to BIR
- Pay contributions to SSS, PhilHealth, and Pag-IBIG Fund
What are the key services offered when you outsource payroll process to InCorp Philippines?
At InCorp Philippines, we offer the following service package to help your company run payroll and generate payslips on time that is compliant with the Philippines regulations:
- Compute gross salary, tax deductions, and government contributions of each employee\
- Generate payroll reports
- Issue password-encrypted payslips to each employee via email
- Submit final payroll reports to appropriate government offices
- Compute final pay of resigned employees and issue Certificate of Compensation
- Annualization of Taxes on Compensation and filing to the BIR