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Buyer's guide · Philippines

Payroll software in the Philippines, a buyer's guide.

What a payroll system has to get right under Philippine law, the questions to ask before you buy one, and what decides the price.

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In one paragraph

The short answer.

Payroll software in the Philippines computes each employee's pay from attendance, then deducts the SSS, PhilHealth and Pag-IBIG contributions and the BIR withholding tax by the current tables, and produces the payslips and the reports the agencies ask for. A good one also handles holiday, overtime and night shift premiums, leave, loans, the 13th month pay and final pay, and keeps a record of every change so a payroll can be checked months later.

By Solomon Lee, Founder and Chief Software Architect, Tekhx. Updated November 8, 2026.

Part 1

What it must compute correctly

Every payroll starts from time: days and hours worked, lates, absences, overtime and night hours. The premiums are set by the Labor Code and must be applied to the right days.

  • Overtime: at least 25% on top of the hourly rate on an ordinary day.
  • Night shift differential: at least 10% of the hourly rate for work between 10 p.m. and 6 a.m.
  • Regular holidays: 200% of the daily rate when worked, and paid even when not worked, subject to the rules.
  • Special non-working days: 130% when worked.
  • Service incentive leave: 5 days a year with pay after one year of service.
  • 13th month pay: one twelfth of the basic salary earned in the year, by 24 December.

Part 2

The government contributions and tax

In 2026 SSS is 15% of the monthly salary credit (employee 5%, employer 10%, plus EC), PhilHealth is 5% of the basic salary split equally, and Pag-IBIG is 2% each on a salary capped at ₱10,000. Withholding tax follows the BIR table after these contributions are deducted.

These rates change: SSS raised its rate every two years until 2025. Payroll software must let the tables be updated without a programmer, and must keep the old tables for the payrolls already run.

Part 3

The reports you file

A payroll system earns its keep at month end and year end, when the figures have to leave the company in the agencies' formats.

  • BIR Form 1601-C, the monthly remittance of tax withheld on compensation.
  • BIR Form 2316 for each employee and the annual alphalist with Form 1604-C, by 31 January.
  • The SSS, PhilHealth and Pag-IBIG contribution reports and payment references for each month.
  • Payslips each payroll, and the final pay of a separated employee within 30 days.

Part 4

What separates a good system from a spreadsheet

A spreadsheet can compute a payroll. It cannot stop someone from changing a rate after the payroll is approved, show who changed it, or produce the same payslip again a year later. That is what a system is for: approvals before release, roles that decide who sees salaries, an audit trail on every record, and history that does not move.

Part 5

Payroll inside an ERP or on its own

Payroll on its own is enough for a business whose only pain is payday. When the same people also file leave, are scheduled on shifts, are paid commissions from sales or are charged to projects, payroll belongs inside one system with HR and accounting, so the payroll posts to the books instead of being typed in again.

Before you buy

Questions to ask any vendor.

  • Who updates the SSS, PhilHealth, Pag-IBIG and BIR tables when they change, and how fast?
  • Can it compute holiday, overtime, night differential and rest day pay from our own attendance data?
  • Which BIR and agency reports does it produce, in the exact format we file?
  • Can we re-print last year's payslips and 2316s exactly as they were released?
  • Who can see salaries, and is every change to a rate or a payroll recorded with a name and time?
  • Do we pay per employee per month, and what happens to our data if we stop?
  • Do we get the source code and the database, or only a login?

Cost

What decides the price.

Every business is priced on what it needs. These are the things that move it.

Number of employees and branches

More people and sites mean more attendance data, approvals and reports to set up and test.

How attendance comes in

Biometrics, a mobile clock-in or a spreadsheet each need a different connection.

Your pay rules

Shifts, commissions, allowances and loans that differ by group add rules to configure.

Your old payroll history

Bringing in past payrolls and year-to-date figures is part of the work.

Payroll alone or with HR and accounting

One module is a smaller job than a whole system that posts payroll to the books.

Free tool

Philippine payroll calculator

SSS, PhilHealth, Pag-IBIG and withholding tax on a monthly salary, with the take-home pay.

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Tekhx hr and payroll system

Talaan, ready to use.

From the time clock to the pay slip: attendance, leave, recruitment, the 201 file, discipline, payroll with labor code premiums, and SSS, PhilHealth, Pag-IBIG and tax.

Watch the Talaan demoRead what is inside

Questions

Asked and answered.

What is the best payroll software in the Philippines?

The best one for a given business computes the 2026 SSS, PhilHealth, Pag-IBIG and BIR figures correctly, handles its own pay rules, produces the reports it files, and does not lock its data away. Compare vendors on those points, not on the number of features.

Is payroll software required by law in the Philippines?

No. The law requires correct pay, contributions, withholding and records, not a particular tool. Software makes those correct and checkable as the company grows.

Can payroll software file directly with SSS, PhilHealth, Pag-IBIG and BIR?

It prepares the reports and files in the formats the agencies accept; the upload and payment are done through each agency's own portal or channel.

How long does it take to set up a payroll system?

A ready-made payroll system can run in weeks once the employee list and pay rules are in. A custom one, built with HR and accounting, takes 1 to 2 months for a small to medium business.

Sources