How to pay independent contractors in the Philippines?

June 21, 2021

Payments to overseas contractors in the Philippines are sending through various remittance services. Hiring independent contractors in the Philippines occurs by understanding the labor laws of the country. Many companies exist through which paying independent contractors hourly in the Philippines is made easier. The currency of the country is the Philippine Peso and general Philippines contractor pay is 244,673 peso. The exchange rate of USD into Peso is 48.50. Paying independent contractors in the Philippines is mostly done by remittance services. However, paying independent contractors in cash in the Philippines also occurs to avoid payroll and the company’s taxes.

Paying wages to overseas employees in the Philippines:

People of the Philippines generally use Filipino as their primary language but speak English for official purposes. Working remotely from the Philippines for a US company tax is possible and many independent contractors and 1099 employees are working from the Philippines remotely. Paying wages to overseas employees in the Philippines occur through companies such as Remitly, Western Union, World Remit, etc. Salary to foreign employees in the Philippines is sent through these services. For example, the average salary of a software developer in the Philippines is 426,042 pesos.

Independent contractor agreement and taxes:

An Independent contractor agreement is necessary to determine the independent contractor payment schedule in the Philippines. The agreement has all the recitals, contractor and client information, and scheduled dates to remove any ambiguity. The agreement should comply with local regulatory requirements Independent contractors also pay more taxes for filing an annual tax return that includes self-employment and income tax liability. Therefore, payments to foreign contractors for services tax are raised from 25% to 30% for independent contractors and freelancers. Independent contractors make almost 21,572 pesos per month in the Philippines.

Independent contractor payment rights in the Philippines:

Independent contractor payment rights in the Philippines are issued under Department Order No. 174 that protects the rights of independent contractors. Hiring independent contractors in the Philippines and freelancers are done on a contract basis that is not associated with any agency. Freelancers and contractors of the Philippines must be registered with the country’s Bureau of Internal Revenue (BIR). However, the rights of others are protected by the companies through which the contractors are linked.

Independent contractor payroll of Philippines:

Independent contractor payroll of Philippines has a monthly payroll frequency with 15.3% employer taxes. Paying 1099 employees, and paying independent contractors hourly in the Philippines is a crucial task. The contractor upfront in the Philippines should be paid for a maximum of 33% or 50% of the total cost upfront. Independent contractors of the Philippines enjoy certain benefits under the law of 13th-month pay in the Philippines such as extra pay, premium pay, and holiday pay. Employee cash is sent legally in the Philippines by remittance services named below.

Following are the services through which remote workers are paid in the Philippines:


Wise International Payment:

Wise International Payment is the best way to send money to the Philippines because it supports 45+ state currencies. Fast transfers in up to 2 days of contractor pays can be done through the channel. However, the remittance cost is relatively higher i.e. $12.27 (48.5100 exchange rate). The service provides a high level of security and accepts credit and debit cards. The tool called Wise Batch Payment helps foreign countries to pay multiple salaries in the Philippines in one go. 

The company’s application has made International payments more convenient. However, the recipient can not track the transaction statuses.

Western Union:

Philippines contractor pays can also be sent through Western Union which is the best way to send money to the Philippines. Price Estimator Tool of Western Union helps to calculate remittance fees. Foreign contractor salaries can be received in minutes to days through Western Union. You can get paid through Western Union without a fee. The exchange rate is 47.7284. Agents are present all over the country that makes cash payments and pickups convenient.


You can pay salaries to employees in the Philippines by Remitly as well. Remitly is a cost-effective, and safe method of sending foreign independent contractor pay in the Philippines. Services of cash pickup, bank deposit, home delivery, and mobile money are also available. It also provides transfers over $1000 without a fee. Economy transfer service deposits contractor pays within 3-5 days. However, Express transfer supports instant delivery. The fee for transfers below $1000 is $3.99 and a 3% remittance fee is charged on card payments. The company also provides promotional packages for new customers.


Freelancers overseas can also get paid through PayPal which is a renowned money transferring company available in the Philippines. The method is faster, reliable, and provides a high level of security. Recurring Philippines contractor pays can also be managed easily by PayPal. The transfer fee for transferring to the Philippines by the US is $2.96 with an exchange rate of $63.14 exchange rate mark-up. The contractor pays can be delivered on the same day along with Mass Payment Tool for paying employee cash legally in the Philippines.


A foreign company can send salaries in the Philippines using Xoom. Xoom is a user-friendly service based in California for fast money transfers without a fee. The process of signing in and paying contractor salaries is convenient if compared to other remittance services. Xoom also provides free transfers over $1000 if banks are used as the sensing medium.

The exchange rate is $65.4990. Money transfers can be tracked through the company’s application. A $20 gift card is given to the referrals as well. In the Philippines, along with transaction charges Xoom also charges for converting currencies into different ones. However, complaints of delays and cancellations of the payments have also been observed.


US companies paying foreign employees also use Transfast which offers faster transactions with competitive exchange rates. Bank deposits, mobile wallets, and cash pickups are available all over the country. The service is available for many notable banks of the Philippines such as BPI, Metrobank, and PNB. The transfer fee is impressively low along with a high degree of safety and security. It also offers a transfer of over $1000 without a fee if sent through a bank account. The application is available for both Android and IOS with good customer service. Cash pickups are also available throughout the country along with promotional packages to the new customers. Instant bank transfers however have higher rates. 

World Remit:

World Remit also provides a reliable service of paying wages to independent contractors in the Philippines. The transactions can be made through credit cards, debit cards, or mobile applications. It provides facilities for bank transfer, cash pickup, and airtime top-up. The transfer costs are very low at best exchange rates. The transfer fee is $3.99 which can increase to $24.99 for various currencies.

Direct deposit:

Paying independent contractors through direct deposit is another frequently used method. After choosing the bank checks are required to process Pay to the Order of drop-down arrow. After selecting the option for independent contractors transfer date is entered. The amount is entered and the Pay Online method is verified.


You can not open an RIA account in the Philippines. However, the contractor pays can be sent to the Philippines in various ways. It is an expensive mean which charges $9 with a credit card. The daily limit is $2,999 whereas, the monthly limit is $7,999. In addition to this, the exchange rates may vary at different locations of the country. The company provides fast transfers. For example, the money can be transferred in 15 minutes with a worldwide transfer network and multiple payment options.