Minimum Wage in The Philippines: Rates, Trends & Compliance

Proposed Nationwide Legislated Wage Hike for June 2025

For the first time in nearly 36 years, lawmakers are seriously advancing a proposal for a legislated nationwide minimum wage hike in the Philippines. With inflation and the cost of living continuing to rise, the move has been hailed as historic by labor groups — but it has also sparked debate among businesses, policymakers, and economists.

What's on the Table?

Two key proposals are now under consideration:

• House Bill (HB) No. 11376, or the "Wage Hike for Minimum Wage Workers Act," which seeks a ₱200 daily increase for all private-sector workers, regardless of region, industry, or employment status.
• Senate Bill (SB) No. 2534, which puts forward a more modest ₱100 daily increase.

Both measures cover workers in agriculture and non-agriculture sectors, and apply to contractual, probationary, and sub-contractual arrangements.

Where Things Stand in Congress

As of early 2026, the proposed wage hike under House Bill 11376 did not become law. While the House overwhelmingly approved the bill on June 4, 2025, Congress adjourned before the House and Senate could reconcile their differing versions (₱200 vs. ₱100 daily increase). Because no bicameral conference committee completed its work before adjournment, the measure lapsed at the end of the 19th Congress.

With the start of the 20th Congress, the bill must be refiled and passed again for any wage increase to take effect. Labor groups and lawmakers have signaled intent to revive the proposal, but as of now, there is no enacted nationwide wage hike tied to HB 11376, and any implementation will depend on new legislative action and presidential approval.

Key Provisions and Exemptions

The proposed legislation goes beyond a simple wage hike, laying out rules to balance worker protection with business sustainability:

• Incentives for small businesses: DOLE may provide support to help SMEs shoulder the higher wage bill.
• Exemptions for Barangay Micro Business Enterprises (BMBEs): These micro-scale enterprises would not be required to implement the wage increase.
• No reduction in existing benefits: Employers cannot offset the hike by cutting allowances or benefits already granted.
• Penalties for non-compliance: Employers who fail to comply face fines of ₱100,000–₱500,000 and/or imprisonment of two to four years.

Why This Matters

A nationwide legislated wage hike could mark a turning point in labor policy:

• For workers: A ₱100–₱200 increase would provide immediate relief for millions of minimum wage earners struggling with high living costs.
• For employers: Adjusting payrolls, planning for compliance, and possibly accessing government support will become critical tasks, especially for SMEs.
• For the economy: The big question is whether the wage increase will boost consumer spending and reduce poverty, or whether it could instead fuel inflation and strain businesses.

How Does Minimum Wage Apply To Different Workers In The Philippines?

In the Philippines, minimum wage isn’t a single rule that applies the same way to everyone. How it works depends on what kind of work is being done, how the worker is engaged, and which rules apply to that role.

Full-Time Employees

Full-time employees must be paid at least the applicable daily minimum wage for their location and role. This rate is determined by the region where the employee is based, the city or municipality’s classification, and the sector they work in (such as agricultural or non-agricultural).

For example, a full-time non-agricultural worker employed in a first-class city in Region IV-A may be entitled to a higher daily minimum wage than an agricultural worker in a lower-classified municipality within the same region.

Part-Time Employees

Part-time employees are still fully protected by minimum wage laws. The difference is how the wage is calculated. Instead of a full daily rate, part-time workers are entitled to proportionate pay. Their hourly or daily wage must not fall below the equivalent minimum wage for the number of hours worked.

For instance, where the regional minimum wage is PHP 520 for an eight-hour workday, this translates to PHP 65 per hour, meaning a part-time employee working four hours must be paid at least PHP 260 for the day to remain compliant.

Interns And Trainees

How interns and trainees are paid depends on how they are classified. Misclassifying an intern or trainee can expose employers to back pay claims and penalties.

• Interns who are treated as employees must receive at least the applicable minimum wage.
• Apprentices and learners enrolled in duly approved programs may be paid not less than 75% of the applicable minimum wage.

Domestic Workers And Live-In Roles

Domestic workers in the Philippines – often referred to as kasambahays – are covered by a separate legal framework, not the standard regional minimum wage system that applies to most private-sector employees.

This framework is set out under the Kasambahay Law, and it applies to roles such as live-in helpers, housekeepers, nannies, cooks, drivers, and caretakers working in private households.

How Minimum Pay Works For Domestic Workers

Unlike other workers, domestic helpers are paid a monthly minimum wage, not a daily regional rate. The minimum amount depends on where the household is located. In practice, this means minimum monthly wages typically range from around PHP 6,000–PHP 6,500 in the National Capital Region, about PHP 5,000 in chartered cities and first-class municipalities, and approximately PHP 4,000 in other municipalities.

These rates are set specifically for domestic work under separate regulations and do not automatically increase when regional wage orders for other sectors are adjusted.

Sector And Business Exemptions

Some employers in the Philippines may qualify for specific minimum wage exemptions or special wage treatments, but these are narrow in scope and closely regulated. Most businesses do not qualify by default, and applying an exemption without approval is a common compliance mistake.

Below are the most common examples you’ll come across:

Agricultural Sector Exemptions

In some regions, agricultural workers may be covered by different minimum wage rates than non-agricultural employees. This can include:

• Lower daily minimum wage rates set specifically for agricultural work, reflecting factors such as crop seasonality, input costs like seeds and fertiliser, and variable farm income across planting and harvest cycles
• Different treatment for seasonal or farm-based labor

These distinctions must be clearly stated in the applicable regional wage order. If a wage order does not provide a separate agricultural rate, the standard regional minimum applies.

Distressed Or Financially Challenged Establishments

Employers facing genuine financial difficulty may apply for temporary exemption or deferment from implementing a new wage increase.

This is sometimes available when:

• The business is operating at a sustained loss
• A wage increase would threaten business viability or lead to layoffs

Employers that fall into this category typically need to submit financial statements and supporting documents to the regional wage board, and any exemption granted is time-bound, not permanent.

Small Enterprises and BMBEs

Barangay Micro Business Enterprises (BMBEs) may qualify for special wage treatment under Philippine law.

To be recognised as a BMBE, a business must:

• Be properly registered with the local government unit
• Meet size and asset thresholds set by law

Once registered, BMBEs may be exempt from paying the statutory minimum wage, but only to the extent allowed under the BMBE framework. Other labor standards – such as social security contributions and basic protections – still apply.

Without formal BMBE registration, this exemption does not apply.

Apprentices and Learners

If you’re running approved apprenticeship or learnership programs, you cannot pay participants not less than 75% of the applicable minimum wage. Using this rate outside approved programs is not allowed.

This applies only when:

• The program is formally approved
• The worker is correctly classified as an apprentice or learner

Important to Know

Exemptions are never automatic. In most cases, they require:

• Prior approval from the relevant wage board or authority
• Proper registration or certification
• Ongoing compliance with specific conditions

If an exemption expires, is denied, or was never valid in the first place, the employer remains liable for full minimum wage compliance, including any back pay owed.

Expat Employees

Expatriates working in the Philippines are covered by Philippine labor laws, including minimum wage requirements.

While most expat roles are compensated well above local minimums, employers are still expected to comply with local wage rules, employment standards, and contract requirements. Minimum wage compliance is not waived simply because a worker is foreign.

Penalties for Non-Compliance with Minimum Wage Laws in the Philippines

If you don’t apply the correct minimum wage, the consequences can add up quickly. You may be required to pay back wages to affected employees, often retroactively, and labor authorities can impose administrative fines ranging from ₱25,000 and ₱100,000 on top of that. If underpayment is repeated or intentional, company officers can also face criminal exposure (up to 4 years in prison) under Philippine labour law, alongside civil claims and legal costs.

Enforcement is handled by the Department of Labor and Employment and its regional offices, which have the authority to inspect your payroll records and issue compliance orders. This is where support matters. Playroll helps you apply the right regional wage rates, stay on top of tranche increases, and keep payroll aligned with local rules, so compliance issues are caught early rather than turning into penalties.

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Tax Implications of Minimum Wage

For minimum wage earners in the Philippines, the tax treatment is relatively straightforward, but there are still important details for employers to understand.

Under the TRAIN (Tax Reform for Acceleration and Inclusion) law, employees who qualify as minimum wage earners are generally exempt from income tax. This exemption usually applies not only to base pay, but also to certain related earnings that are directly linked to minimum wage work like overtime or hazard pay.

Unlike some countries, the Philippines doesn’t offer a separate earned income tax credit. Instead, tax relief for low-income workers is built directly into this exemption.

From an employer perspective, minimum wage still comes with mandatory payroll costs. Even when income tax does not apply, you are still required to make employer contributions to:

• Social Security System: Covers pensions, disability, sickness, and maternity benefits
• PhilHealth: Provides national health insurance coverage
• Pag-IBIG Fund: Supports housing loans and savings programs

As minimum wages rise, these statutory contributions increase alongside them, raising total employment costs beyond the headline wage. This is why accurate payroll setup is really important.

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