Payslip Requirements in the Philippines: What Employers Must Provide Under the Labor Code

Executive summary

In the Philippines, providing a clear, itemized record of each wage payment is a labor-standards obligation. While the Labor Code primarily mandates proper payment of wages, record-keeping, and lawful deductions, the Department of Labor and Employment (DOLE) operationalizes these duties by requiring employers to issue payslips (paper or electronic) that show how pay was computed and what deductions were made. Non-issuance or inadequate payslips can expose employers to inspection findings, directives to correct, and administrative penalties.

Legal architecture at a glance

Labor Code (Book III, Wages)
- Requires wages to be paid at least twice a month at intervals not exceeding 16 days; prohibits certain wage deductions; and requires employers to keep payroll and time records and make them available to DOLE.
- Mandates payment in legal tender; payroll ATM/salary cards are allowed if employees have reasonable access to the full amount without extra cost and with safeguards against unauthorized deductions.
Omnibus Rules Implementing the Labor Code & DOLE issuances
- DOLE regulations and labor advisories require itemized statements of earnings and deductions (i.e., payslips) and prescribe record-retention and inspection standards.
- DOLE regional wage orders (and implementing rules) often reiterate the duty to post wage orders and to reflect mandated pay (e.g., minimum wage, COLA) on payslips.
Related statutes that affect payslip content
- 13th-Month Pay Law (P.D. 851) – requires 13th-month pay and, in practice, its computation and payment must be transparent on payslips or in a separate computation sheet.
- Tax Code – requires withholding tax and proper tax identification and reporting (e.g., BIR Form 2316).
- SSS, PhilHealth, and Pag-IBIG laws – require remittance of statutory contributions and typically necessitate that employee shares be reflected in the payslip.
- Data Privacy Act (R.A. 10173) – governs payslip data processing, security, and minimization.

What a Philippine payslip must contain

To satisfy labor-standards, tax, and social-security transparency, each payslip should clearly show:

A. Identifiers

Employer: registered name and address.
Employee: full name and (optionally) employee number/unit/position.
Pay period: coverage dates (e.g., “1–15 Sep 2025”).
Date of payment and mode (cash, check, bank credit/ATM).

B. Earnings (itemized)

Basic pay: rate (daily/hourly/monthly) × hours/days worked.
Overtime (OT): hours, applicable OT rate (e.g., 125%/130%), and amount.
Night shift differential and hazard pay, if any.
Premium pay: rest day/holiday premiums (regular holiday vs special non-working).
Allowances: COLA, meal, transportation, and other allowances (indicate if taxable/non-taxable).
Commissions/production incentives and piece-rate earnings with units/outputs.
Leave conversions (e.g., unused leave monetization), if paid this period.
13th-month or mid-year/Christmas bonus if paid during the period (otherwise show on a separate 13th-month computation).

C. Deductions (itemized and lawful)

Withholding tax on compensation.
SSS, PhilHealth, and Pag-IBIG – employee shares (with current monthly wage base or bracket used).
Other lawful deductions (each with legal basis and employee’s written authorization where required):
- Salary loans (SSS/Pag-IBIG/company), company advances, cooperative dues, union dues/agency fees, government-authorized levies, court-ordered garnishments.
- No deductions for loss/breakage/shortage unless the law’s strict conditions are met (due process, proof of fault, written authorization, and statutory caps).

D. Totals and balances

Gross earnings, total deductions, and net pay.
YTD (year-to-date) summaries (recommended best practice): taxable income, taxes withheld, and contribution totals.

E. Optional but prudent disclosures

Minimum wage compliance line (for regions/sectors with tiered rates).
Pay code legend (e.g., “RD” = rest day premium).
Cutoff vs payout schedule (e.g., “Cutoff 1–15; Payday 20th”).

Form and delivery

Paper payslips are acceptable if given on or before payday and are readable and complete.
Electronic payslips (PDF/portal/email) are acceptable if employees have secure access, can download/print, and the system preserves an audit trail.
For electronic delivery, apply Data Privacy Act principles: purpose limitation, data minimization (avoid full display of TIN/SSS numbers; mask where feasible), access controls, and retention/disposal rules.

Timing and frequency

Pay frequency: at least semi-monthly; intervals ≤ 16 days.
Payslip timing: issue together with wage payment (best practice: same day or earlier once payroll is finalized).
Final pay (upon separation): provide within the reasonable period set by DOLE guidance and include a final payslip that itemizes payouts (e.g., last salary, pro-rated 13th-month, leave conversions) and deductions (e.g., unreturned property per lawful policies).

Record-keeping and retention

Keep payroll, time records, and payslip copies (or the electronic equivalent) on-site and accessible for DOLE inspection.
Minimum retention should align with the prescriptive period for money claims (three years) and longer where other laws or business needs warrant (e.g., tax and audit).

Special worker categories and how to reflect them on payslips

Piece-rate / output-based workers: show units produced, rate per unit, and computations; ensure effective hourly average complies with minimum wage and overtime/NSD rules if hours are controlled.
Commission-paid employees: itemize base pay (if any) and commissions with the commission period and computation method.
Probationary, project-based, or seasonal: same transparency standards apply; indicate employment status if your template includes it.
Sector-specific rules (e.g., retail/service with no work, no pay days, or construction): reflect applicable wage orders and premiums clearly.

Lawful deductions: guardrails to observe

Statutory deductions only (tax and government contributions) without separate consent.
Other deductions require written authorization from the employee and must benefit the employee.
Losses/shortages/damages: deduct only if due process is observed, fault is shown, and deductions do not exceed allowable limits.
No kickbacks or rebates from wages—strictly prohibited.
No “blanket” authorizations—deductions must be specific and determinable.

13th-month pay on payslips

Show when paid and how computed (basic salary actually received within the calendar year ÷ 12, subject to exclusions recognized by law/regulation).
For resignations or terminations before year-end, issue a pro-rated 13th-month computation with the final pay (and reflect in the final payslip or an attached computation sheet).

ATM payroll and service fees

If using ATM payroll, employees must be able to withdraw wages in full without incurring fees that effectively reduce the wage below what is due.
Payslips should still itemize earnings and deductions even when pay is fully electronic.

Data privacy, accuracy, and disputes

Treat payslips as personal data. Limit disclosures to the employee; do not post or share publicly.
Allow employees to contest errors and provide a correction timeline.
Keep audit trails (who prepared, reviewed, released).
If disputes persist, employees may seek assistance through DOLE’s Single-Entry Approach (SEnA) or file a labor standards complaint.

Employer liability and enforcement

DOLE labor inspectors routinely check payslip issuance and payroll records during compliance audits.
Violations (e.g., non-issuance, unlawful deductions, underpayment) can lead to compliance orders, administrative fines, and payment of deficiencies with legal interest.
Persistent or willful violations may aggravate penalties and expose the company to labor disputes and reputational risks.

Practical compliance checklist (ready-to-use)

Template includes all items under Earnings and Deductions, with rate × hours/units.
Shows: employer & employee identifiers, pay period, payout date, gross, total deductions, net.
Breaks out: OT/NSD/rest-day/holiday pay and COLA; clearly labels taxable vs non-taxable benefits.
Lists: SSS/PhilHealth/Pag-IBIG employee shares and withholding tax.
Supports: piece-rate/commission computations where applicable.
Delivery: paper or secure e-payslip, released on or before payday.
Retention: keep records for at least 3 years (prefer 5–10 years for audit/tax).
Authorization: obtain specific written consent for any non-statutory deductions.
Privacy: mask sensitive numbers; restrict access; purge per retention schedule.
Help desk: set a clear escalation path for corrections and disputes.

Frequently asked edge questions

Do we have to show the employer’s SSS/PhilHealth/Pag-IBIG share? Not required, but many employers display it for transparency. At minimum, show the employee share deducted.
Can we consolidate small allowances under one line? Yes, but clarity is paramount. If consolidation obscures compliance (e.g., whether COLA was paid), list them separately.
Are digital signatures or QR codes required? Not required, but recommended for authenticity and audit.
What if an employee refuses e-payslips? Provide a paper payslip or printable alternative without imposing cost on the employee.

Model payslip layout (high-level)

Header: Employer name & address; Employee name/ID; Pay period; Payout date Earnings

Basic pay (rate × hours/days)
OT (hours × rate)
NSD / Premiums (rest day, special day, regular holiday)
Allowances (COLA, meal, transpo) – taxable/non-taxable
Commissions/Incentives
Others (leave conversions, adjustments) Deductions
Withholding tax
SSS / PhilHealth / Pag-IBIG (employee shares)
Loans/advances (with authorization ref)
Other lawful deductions Totals: Gross – Deductions = Net Pay Footers: YTD summaries; legend; privacy notice

Bottom line

Philippine employers must issue clear, itemized payslips every payout, keep accurate payroll records, make only lawful deductions, and protect employee data. Build your template around transparency (how pay was computed), legality (what may be deducted), and auditability (records you can stand behind during a DOLE inspection).