Short answer

Yes. Paying a privately hired caregiver in cash (Philippine legal tender) is lawful in the Philippines. What matters is how you pay (legal tender, timely, with pay slips and records) and what you comply with (minimum wages/benefits, government contributions, taxes, and data/privacy rules). Below is a practical, all-angles guide in Philippine context.

1) What counts as “cash” and “legal tender”?

Legal tender means Bangko Sentral ng Pilipinas (BSP) notes and coins. Banknotes are legal tender without a ceiling; coins have practical limits per denomination.
Labor standards require wages to be paid in legal tender (or by check/bank transfer with the worker’s consent and ready convertibility). IOUs, vouchers, promissory notes, or in-kind payments don’t satisfy the rule (except very narrow, regulated cases like employer-run facilities with strict safeguards).

Bottom line: Handing pesos in cash to your caregiver is valid payment of wages.

2) Is a caregiver a “kasambahay” or a regular employee?

Context is key.

Kasambahay (Domestic Worker) Law – R.A. 10361. If the caregiver is directly hired by a household and works exclusively within the home, they are generally treated as a domestic worker (kasambahay)—even if the primary task is skilled care (elderly, PWD, post-operative care).
Not kasambahay when the caregiver is:
- Employed by an agency (the agency is the employer); or
- Assigned to a business establishment, clinic, or multiple households as part of a commercial service; or
- Functionally operating as an independent contractor (rare for one-on-one care; misclassification triggers liabilities).

Why this matters: The set of benefits, registration steps, and pay rules differ slightly between kasambahay arrangements and other employment setups.

3) Paying in cash: the compliance checklist

A. Pay period, place, and manner

Frequency: at least once a month for kasambahay; for non-kasambahay employees, at least twice a month (intervals not exceeding 16 days).
Direct to worker: Wages should be paid personally to the caregiver, at or near the workplace, on a fixed payday.
No coercion/restrictions: The employer can’t control how the caregiver spends wages or require purchases from the employer.
Pay slips: Issue a written pay slip every pay period showing wage, allowances, overtime/night differential (if any), authorized deductions, contributions, and net pay. Keep copies.

B. Minimum wage and benefits

Minimum wage: Kasambahay minimum wages are region-specific and adjusted by regional wage boards. Some cities (e.g., NCR) have their own rates for domestic workers. If the caregiver is not kasambahay (e.g., hired for a business), the regional minimum wage for private sector employees applies.
- Practical tip: Put the current statutory rate in the contract and review whenever a new wage order takes effect.
13th-month pay: Required for both kasambahay and other rank-and-file employees who worked at least 1 month, computed at 1/12 of basic salary earned in the calendar year.
Leaves and rest:
- Kasambahay: 24 consecutive hours of weekly rest; at least 5 days of service incentive leave with pay after 1 year of service (commonly non-cumulative, not convertible to cash unless agreed).
- Observe national regular and special non-working days rules as applicable; premium or holiday pay may apply if work is performed on those days.
Hours of work: Target a normal 8-hour workday. If hours exceed this and the setup isn’t one of the limited exemptions, overtime premiums apply. Night work may trigger night shift differential.

C. Government registrations and contributions

SSS, PhilHealth, Pag-IBIG:
- Household employers must register and remit both employer and employee shares (withholding the worker’s share from wages).
- Some contributions have thresholds (e.g., full employer-shoulders if wage falls below a floor for kasambahay—check the prevailing schedules).
Accident/illness coverage: Enrollment ensures the caregiver’s access to sickness, maternity, disability, retirement, and funeral benefits (SSS), inpatient/outpatient coverage (PhilHealth), and housing/savings programs (Pag-IBIG).
Payment proof: Keep official receipts or electronic confirmations for all remittances.

D. Tax considerations (income tax and withholding)

Income tax on compensation:
- If the caregiver’s pay is at or below the applicable statutory minimum wage, they are typically treated as minimum wage earners, whose basic pay is income-tax-exempt (but other taxable pay like certain allowances or bonuses above thresholds may still be taxable).
- If pay is above the minimum, the excess is generally taxable subject to graduated rates and withholding on compensation.
Who withholds?
- For household employers, practice differs from business employers. Some arrangements have the caregiver file and pay any due tax directly, while others treat the household as a withholding agent. To avoid errors, coordinate with your Revenue District Office (RDO) and align your setup (especially if your caregiver’s pay is well above minimum and consistently taxable).
BIR registration numbers: Your caregiver should have a TIN. If you operate like a standard employer-employee arrangement (common), maintain BIR 2316 at year-end and furnish the caregiver a copy.

Good-faith approach: Even if you pay purely in cash, you can still be fully compliant by (a) issuing pay slips, (b) remitting SSS/PhilHealth/Pag-IBIG, (c) handling taxes correctly (withhold or document non-taxability), and (d) keeping orderly records.

4) Deductions from cash wages

Only authorized deductions are allowed, such as:

Statutory contributions (employee share of SSS/PhilHealth/Pag-IBIG);
Withholding tax (if applicable);
Other deductions with the caregiver’s written consent and that are lawful (e.g., salary advances with a reasonable repayment schedule). Prohibited: Charging recruitment/placement fees to kasambahay, deductions for breakages/spoilage without due process, or fines that function as unlawful penalties.

5) Documentation you should have (even if you pay all-cash)

Written Employment Contract (strongly recommended and, for kasambahay, effectively required):
- Parties’ identities and addresses; job title and scope of care; worksite(s); schedule and hours; wage and allowances; pay period; rest days; leave benefits; SSS/PhilHealth/Pag-IBIG enrollment and who files/remits; 13th-month pay; lodging/board (if live-in); termination/notice and return of property; confidentiality and data privacy.
- Preferred language understood by the caregiver; provide a copy.
Government Enrollments
- SSS household employer registration (and caregiver as member), PhilHealth, Pag-IBIG. Maintain the ER/EE numbers and payment reference numbers.
Payroll Records
- Pay slips every pay day; a payroll register (date, gross, deductions, net, signature/acknowledgment if paid in cash); overtime/holiday tracking if any.
Time/Attendance (even simple)
- Logbook, timesheets, or a simple daily record (start/end times, breaks, on-call periods if relevant to care).
Receipts & Remittances
- File ORs/online confirmations for SSS/PhilHealth/Pag-IBIG and any BIR payments/withholding filings.
Health & Safety
- Provide reasonable personal protective equipment (PPE) if needed; keep an emergency contact and basic medical info with consent.

6) Cash vs. bank transfer: which is better?

Cash is legal and often convenient for household workers without bank accounts.
Bank transfer or check gives a stronger audit trail. If you pay cash, pair it with a signed pay slip/acknowledgment each payday.
You can combine methods (e.g., cash for net pay; contributions handled via e-payment).

7) Special scenarios

A. Live-in caregivers

Clarify lodging/board terms in the contract. Board and lodging cannot be charged to reduce wages below the statutory minimum.
Respect privacy and rest periods; being “on premises” is not the same as “on duty.” If on-call is frequent, define compensable hours and overtime rules.

B. Agency-provided caregivers

The agency is usually the employer (wage payer and remitter). Your household pays the agency fee (cash or otherwise).
If you also give cash “top-ups” directly to the caregiver, clarify in writing whether these are agency-recognized wages (so they are reflected in pay slips and contributions). Avoid creating a dual-employer tangle.

C. Multiple households or shifting worksites

If the caregiver splits time across households (e.g., morning/evening care), each household may be a separate employer—each must comply on wages, benefits, and contributions for their share.

D. Foreign currency payments

Labor rules expect wages in Philippine legal tender; if you and your caregiver agree on a rate pegged to foreign currency, convert and pay in pesos at an agreed rate and document the computation in the pay slip.

8) Termination, final pay, and clearances

Grounds and notice must follow the applicable regime (Kasambahay Law or general labor rules).
Final pay (including unused leaves if convertible by agreement, last period’s benefits, pro-rated 13th month) should be released promptly in cash or other lawful tender, with a final pay slip.
Provide a Certificate of Employment upon request.

9) Privacy and dignity in home-based care

Limit access to the caregiver’s personal data to what is necessary (IDs, TIN, SSS/PhilHealth/Pag-IBIG numbers, emergency contact).
For patient information (elderly/disabled family member), include a confidentiality clause, but don’t use it to suppress lawful whistleblowing (e.g., reporting abuse).

10) Practical templates & habits that prevent disputes

One-page payroll template: Date → Gross pay → Allowances → OT/holiday → Deductions (SSS, PhilHealth, Pag-IBIG, tax, advances) → Net cash paid → Signature/Thumbmark.
Contribution calendar: Note due dates; pay electronically when possible.
Annual wrap-up: Compute 13th-month pay in December; update wages if a new wage order took effect; refresh the contract if duties or hours changed.

11) Quick FAQs

Q: Is paying entirely in cash illegal? A: No. It is legal. Just document every payment and comply with contributions, taxes, and benefits.

Q: Can I deduct food or lodging from wages? A: Generally no for kasambahay if it pushes pay below the minimum. If deductions are allowed, they must be lawful, reasonable, and consented to in writing.

Q: Do I need to give a pay slip if I pay cash? A: Yes. Pay slips are required every pay period.

Q: What if my caregiver prefers GCash/bank transfer? A: That’s fine if the caregiver consents and has ready access to the funds. Keep electronic proofs.

Q: Must I enroll my caregiver in SSS/PhilHealth/Pag-IBIG if I pay cash? A: Yes. Mode of wage payment doesn’t affect the enrollment obligation.

Final takeaways

Cash wages are lawful for private caregivers in the Philippines.
Legality hinges on compliance, not the medium: pay on time in legal tender, issue pay slips, meet minimum wage and benefits, enroll and remit to SSS/PhilHealth/Pag-IBIG, and handle tax correctly.
Document, document, document. If you pay in cash, your records are your best protection.

Note: Regional wage rates, contribution tables, and tax thresholds change. Reconfirm the latest regional wage order, SSS/PhilHealth/Pag-IBIG schedules, and BIR rules before finalizing figures in your contract or payroll.