During the first half of 2024, the economy in the Philippines grew by 6%, making this country an attractive option for workers and investors alike.
For those considering a move to the Philippines, either as an employee, employer or expat, it is important to understand the salary and wage structure. You should also be aware of the influencing factors on the Philippines’ average salary, such as job location, industry sector and government policies.
Let's take a deeper look at the concept of average salaries as well as the difference between gross and net income.
Average income, whether salary or wages, sits in the middle of the pay spectrum between the highest and lowest levels of remuneration for a particular industry, sector or position. The average salary in the Philippines in 2024 was PHP 537,000 which is equivalent to $9,528 or £7,538.
It’s important to be able to differentiate between gross and net income when looking at the average wage in the Philippines.
Gross pay is the pre-tax and pre-social contribution figure that is typically advertised as part of the role description and mentioned in an employment contract.
By contrast, net pay is the amount that you will get as your paycheck or that is paid into your bank account. It is the gross figure minus tax, social insurance contributions and any other mandatory deductions.
Gross income is the term given to the salary amount for a given job before any deductions are made. In the Philippines, the employer is responsible for calculating, withholding and submitting taxes on wages.
This includes:
Once all of the above have been deducted by the employer from your gross pay, the remaining amount is your net pay. This is the amount that will be paid into your bank account and will be marked on your pay slip as such.
There are many factors that influence salaries in the Philippines, all of which are important for employees or employers to consider.
Industry
The particular industry or sector that you work or operate in will have a significant impact on the salary offered. For example, construction and maintenance workers earn an average salary in Philippine pesos (PHP) 803,002 while workers in the scientific sector earn around PHP 395,000.
Region
The salary in different regions of the Philippines varies widely due to living costs, industry standards and economic development. Regions have their own predominant industries and employment sectors which will also impact the average salary e.g. low paid agricultural workers in rural areas.
Role
Salaries will vary widely according to the role or job position that you have. As an example, an airline pilot earns on average PHP 600,000 while a plumber will earn half of that amount annually.
Education level
Your education level is an important contributing factor to the level of salary you can expect to receive in the Philippines. Someone with a Bachelor’s degree will receive approximately 24% more in wages than those with a high school certificate or diploma.
Experience
Generally, your salary should reflect the amount of experience that you have in the profession or the particular role. After 2-5 years your salary should increase by around 32% and by even more after 5-10 years.
Company size
Larger companies and enterprises often pay higher salaries than their smaller counterparts who cannot afford to be as competitive in the labor market.
Construction is the highest paying industry in the Philippines with the average salary reaching PHP 803,002,
Manufacturing is a close second with average salaries around PHP 713,589.
Tourism & hospitality also offer high salaries averaging around PHP 593,620 per year.
There is a strong services sector in the Philippines with more than half the working population employed in this area. Agriculture and production industries each employ just over 20% of the work force. Unemployment is currently 3.2 %.
The minimum wage in the Philippines is calculated as the lowest daily amount that employers are allowed to pay their workers. This amount varies according to the region, the industry, productivity measures, inflation rates and the cost of living.
In 2024, the Regional Tripartite Wages and Productivity Board raised the minimum daily wage by PHP35 for private sector workers in Metropolitan Manila.
In non-agricultural jobs this means workers get a minimum wage of PHP645 while agricultural, manufacturing and service and retail jobs will pay a minimum daily wage of PHP 608.
The Philippines is divided into many different regions and each one has its own minimum wage rates which are set by a Regional Tripartite Wages and Productivity Board. The minimum wage applies to all workers in the Philippines’ private sector, regardless of their position.
So, what is the average salary in the Philippines? Let’s take a look.
Regional average salaries vary considerably in the Philippines. Metro Manila offers the highest average wage in the Philippines of approximately PHP 500,000. Cebu is a close second offering PHP 450,000, mostly in the IT sector and business process outsourcing (BPO).
Salary levels also differ across different industries in this archipelago. While the high demand sectors of IT and BPO provide competitive salaries, more traditional jobs such as retail and agriculture offer lower remuneration.
Within the different industry sectors, certain jobs command higher salaries than others. A back-end developer can earn in excess of PHP 630,000 while a teacher often takes home less than PHP 322,000 per annum.
The Philippines’ economy is growing strongly and is boosted by surging IT, manufacturing and BPO sectors.
However, the monthly average salaries in the country are still lower than many countries in the region including Japan (516,000 JPY), Singapore (S$5,783) and South Korea (3.815 KRW).
In contrast. salaries are higher than Indonesia (IDR 5,000,000) and Vietnam (8.5 million VND) with a Philippines average salary at PHP 44,800 per month.
The cost of living in the Philippines is relatively low being almost half of that in South Korea. However, the GDP per capita of South Korea is almost nine times that of the Philippines.
If you’re working in the Philippines or have been offered a position, you may be wondering how to negotiate a competitive salary.
The best approach is to do your research and know what are the high and low end salaries for similar positions in the industry. This gives you a solid footing and room to negotiate.
Never start with your goal salary level, always go higher but within the salary range for the position and your experience level. This allows you to negotiate without ending up with less than you wanted.
If the salary is non-negotiable, consider other perks, incentives or subsidies. This could be better health insurance coverage, extra holiday, subsidised parking or meals.
Moving to the Philippines to work or as an employer means learning about the wage structure, average salaries and how these vary according to region, industry, job role, company size or experience and education.
Employees must be able to discern between gross and net salary as well as how the daily minimum wage system works. These are all crucial for making informed career choices.
QuickBooks is the perfect partner to help you manage your finances, track expenses and send invoices. Whatever you need for your job or business, we’ll work with you at every stage of your journey in the Philippines.
