Philippines hiring guideHiring guide

PEO vs. EOR in the Philippines.

A professional employer organization (PEO) shares employer duties with a company that already has its own entity. Here’s how that compares with an employer of record, and which fits if you don’t have a company in the Philippines.

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Who is the employer?

PEO or employer of record.

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Co-employment, or one employer.

How a PEO and an employer of record differ, who the legal employer is in each, and what that means for hiring your team in the Philippines.

A PEO is a co-employer
It runs payroll and HR tasks for you, and the two of you share liability.
An EOR is the employer
An employer of record is the full legal employer of your team.
A PEO needs your entity
PEOs usually require you to have your own legal entity in the country.
A US model
PEO is a recognized category in the US. Philippine law has no such category.
The closest local rules
Supplying workers falls under DOLE’s contracting rules: registration and capital.
With Remote Employee®
You don’t need a Philippine company. We employ your hire; you manage the work.

What a PEO is

A professional employer organization (PEO) is a co-employment arrangement. The PEO takes on administrative employer tasks like payroll and HR for a client company, and the two share employer responsibilities and liability.

PEOs are a US model. The IRS runs a voluntary certification program for them, created by the Tax Increase Prevention Act of 2014.

PEO vs. employer of record

	PEO	Employer of record
Who is the legal employer	You and the PEO, as co-employers	The employer of record
Do you need a local entity?	Usually yes	No
Who carries employer liability	Shared	The employer of record
Who runs payroll and HR	The PEO	The employer of record

PEOs and Philippine law

Philippine law has no PEO category. The closest framework is contracting and subcontracting under Articles 106 to 109 of the Labor Code, implemented by DOLE Department Order No. 174, Series of 2017. A legitimate contractor must:

Register with the DOLE regional office where it mainly operates (a ₱100,000 fee, for a certificate valid for 2 years)
Have substantial capital: at least ₱5,000,000 in paid-up capital or net worth
Run a distinct, independent business that controls how the work is done
Sign a service agreement that protects the workers’ rights

Labor-only contracting is prohibited. When a supplier lacks substantial capital and its workers do the client’s core work, or it doesn’t control the work, the client becomes the workers’ direct employer.

DOLE Department Circular No. 01, Series of 2017 clarifies that Department Order No. 174 doesn’t cover business process outsourcing, such as BPO, KPO, IT, and back-office services.

If you don’t have a company in the Philippines

A PEO usually needs your own local entity. Without one, an employer of record is the usual route: it employs your team locally and handles payroll, taxes, and compliance.

See the employer of record guide

How Remote Employee® works

Remote Employee® is the legal employer. We employ your team member locally in the Philippines and take care of their payroll, taxes, contracts, and compliance. You just pay a set monthly invoice while we take care of the rest.

Instead of stitching together recruiters, an employer of record (EOR), payroll, HR, and IT, you get one partner and one monthly invoice.

Sources

We checked the Philippine rules on this page against these official sources. Rates and rules change, so check the latest before you act on them.

FAQ

Questions about PEO in the Philippines.

Still figuring out if we’re what you need? Here are a few questions we get asked a lot.

A professional employer organization: a company that co-employs a client’s staff, running payroll and HR tasks while the client stays an employer too.

Philippine law has no PEO category. Arrangements where one company supplies workers to another fall under DOLE’s contracting rules, Department Order No. 174.

A PEO shares the employer role with you, and you usually need your own entity. An employer of record is the full legal employer of your team, so you don’t.

Usually not. PEOs generally require the client to have its own legal entity. Without one, an employer of record is the usual route.

No. Remote Employee® is the legal employer of your team in the Philippines, so you don’t need a local company or a co-employment arrangement.

You do. You set their tasks, priorities, and hours, and they work in your tools. We handle the employment side.