Kasambahay Contract and Loan Agreement: Terms Families Must Write Down

Direct answer: A Philippine household should sign a kasambahay employment contract before work starts and give the worker a copy in a language or dialect both parties understand. If the family gives a salary advance or loan, write that agreement separately or as a clearly labelled annex. State the amount, repayment dates, authorized salary deduction, and what happens if employment ends. Record every deduction on a payslip, keep the worker above the applicable minimum wage, and never use a loan to control the worker or hold identity documents.

The search phrase kasambahay contract can mean a legal employment agreement, a downloadable template, a salary advance, or a loan agreement. These are related but not interchangeable. The employment contract sets the whole working relationship. A loan agreement records money that the worker must repay. A payslip proves what was paid and deducted in a particular pay period.

This guide is for families hiring domestic workers in the Philippines. It is practical information, not a substitute for advice from the Department of Labor and Employment, the relevant Regional Tripartite Wages and Productivity Board, or a qualified professional when a dispute is serious.

What the Kasambahay Law requires in the contract

The Batas Kasambahay text requires an employment contract before the domestic worker starts service. The contract should be in a language or dialect understood by both parties, signed by the employer and worker, and provided to the worker. The law lists the subjects that belong in the agreement:

• duties and responsibilities;
• period of employment;
• compensation and payment arrangements;
• authorized deductions;
• hours of work and proportionate additional payment;
• rest days and allowable leaves;
• board, lodging, and medical attention;
• any agreement on deployment expenses;
• the loan agreement;
• termination of employment; and
• any other lawful condition agreed by both parties.

That list is a useful writing checklist, not a reason to copy a blank form without thinking. A family should describe the actual household: the children or older adults involved, pets, cooking, cleaning, errands, driving, night supervision, and any regular work outside the home. A helper should be able to tell from the contract what the normal day looks like.

The DOLE regional explanation of Batas Kasambahay also explains that the agreement should be completed before service begins and that the worker may be asked for certain clearances or a health certificate at the employer’s cost before execution. Do not turn a lawful pre-employment check into an open-ended demand for documents, money, or unpaid work.

Minimum wage comes before any loan deduction

There is no single nationwide kasambahay salary that applies to every household. The applicable minimum is set through regional wage orders and can change. For example, the NWPC says the NCR domestic-worker minimum increased to ₱7,800 per month effective 7 February 2026 under Wage Order NCR-DW-06. That NCR figure should not be copied into a contract for Cebu, Pampanga, Davao, or another region without checking the relevant regional order.

Use the NWPC wage update and the current regional kasambahay guide as starting points, then verify the wage order covering the household’s location on the date the contract is signed. Put the agreed monthly wage in pesos and write whether the worker is paid monthly, twice monthly, or on another lawful schedule.

The wage is not a “balance” after a family subtracts a recruitment fee, food, a uniform, a phone, a lost item, or a personal loan. Calculate the agreed wage first. Then list only deductions that have a lawful basis or written consent, with enough detail for the worker to check the arithmetic.

Employment contract versus loan agreement

Keep these documents distinct:

Do not hide a loan inside a vague clause saying “all expenses will be deducted.” That phrase does not tell the worker how much is owed, who received the money, or when the debt ends. If the family pays a doctor, travel provider, recruitment agency, or school directly, record whether it is an employer expense, an advance on behalf of the worker, or a loan. The worker should not have to guess.

What to put in a kasambahay loan agreement

A short, readable loan agreement can include:

1. The parties. Write the employer’s name, household address, worker’s name, and the date of the agreement.
2. The amount. State the exact amount actually handed to the worker or paid for the worker’s agreed expense, in pesos. Attach a receipt or transfer record.
3. The purpose. If the money is for an emergency, travel, school, medical care, or another purpose, describe it without using shame or threats. Purpose helps both parties distinguish a loan from ordinary household spending.
4. Interest and fees. State “no interest” if that is the agreement. If interest, late charges, or other fees are proposed, obtain appropriate advice before using them and write the total cost plainly. Never add a surprise processing fee later.
5. The repayment plan. State the first deduction date, installment amount, frequency, final expected date, and the remaining balance after each payment.
6. Payroll authorization. State the exact amount or formula that may be deducted from wages, and confirm that the worker receives a copy. Do not use a blank authorization.
7. Early repayment. Say whether the worker may repay early without a penalty and how the balance will be confirmed.
8. Employment ending. Explain how the parties will calculate the remaining balance at separation. Do not automatically take every peso of final pay. Check the law and get advice if the parties disagree.
9. Signatures and language. Both parties sign and date after the agreement has been explained in a language or dialect they understand. Each keeps a copy.

If the worker cannot read the document easily, read it aloud, allow questions, and record the agreed language or witness if appropriate. A signature does not make an unclear or unlawful term fair. The goal is a shared record that prevents arguments, not a document that surprises the worker later.

How salary deductions should be recorded

The law says wages should be paid directly to the domestic worker and that deductions other than those mandated by law require the worker’s written consent. The SSS household-employer guidance also tells household employers to maintain true records of wages, contributions, loan amortizations, and amounts deducted.

Create a payslip with:

• pay period and payday;
• gross agreed wage;
• any lawful government contribution share;
• the loan or salary-advance installment, identified by agreement date;
• other authorized deductions, each on its own line;
• total deductions;
• net cash or bank payment; and
• worker acknowledgment or a reliable payment record.

Give the worker a copy. If the family makes a mistake, correct it visibly in the next record or issue a corrected payslip. Do not erase a payment history or rely on a chat message as the only payroll system.

An installment should be small enough that the worker can meet ordinary living needs. The family should not make a deduction that leaves no usable pay, turns the minimum wage into a fiction, or makes the worker borrow again to survive. If repayment would take too long, renegotiate a transparent schedule rather than increasing the deduction secretly.

Register the worker and handle benefits separately

The contract and loan record do not replace registration. The SSS household-employer page explains the Kasambahay Unified Registration System and the household employer ID process. It says employers should report the worker for coverage and keep records; it also provides current instructions for contributions and SSS loan amortizations.

For health insurance, PhilHealth’s employer registration guidance lists the unified forms used for a kasambahay employer and worker. For Pag-IBIG reporting, use the current Household Employment Unified Report Form and follow the agency instructions.

Do not confuse an existing SSS loan with a private loan from the family. If the worker has an SSS loan amortization, ask for the current statement and use the SSS process. If the family lends money, use the separate agreement described above. In both cases, the payslip should identify the deduction and the remittance or balance should be traceable.

Contribution schedules and thresholds can change. Check the current agency rules instead of copying a number from an old template. The family should pay its employer share, remit deductions correctly, and keep official receipts or online payment records.

A fair hiring and loan workflow

Before the first day

Agree on the job description, household address, wage, rest day, hours, sleeping arrangement, food, leave, benefits, start date, and probation or notice terms if applicable. Check the regional minimum wage. Prepare the contract in a language the worker understands. Decide whether there is any advance or loan, but do not make a worker borrow money just to accept the job.

On the first day

Sign the employment contract before service starts and give the worker a copy. If money is advanced, sign the loan agreement at the same time only after the worker has reviewed it. Record the payment method. Explain who will register the worker and when the first government contribution or report will be made.

Every payday

Pay on the agreed schedule. Provide the payslip. Show the wage, each contribution share, each loan installment, and the net payment. Ask the worker to raise errors quickly, but do not make acknowledgment a condition for receiving wages.

When the balance changes

Issue an updated balance after every repayment or additional advance. If the employer forgives part of the loan, write the new balance and date. If the worker pays in cash, give a receipt. If the worker pays by transfer, save the transaction record and note which installment it covers.

When employment ends

Prepare a final statement showing wages due, benefits or statutory payments due, lawful deductions, loan balance, and any agreed repayment plan. Do not use threats, passport retention, confinement, or public shaming to collect a debt. If the parties cannot agree, preserve the records and seek help from DOLE or appropriate legal advice.

Common mistakes families should avoid

• Using a generic contract that says “all household duties” without describing the real role.
• Setting a salary below the regional wage order because food and lodging are provided.
• Calling a salary advance a “gift” and later demanding repayment.
• Deducting a loan without the worker’s written authorization.
• Taking the entire payday to recover a debt.
• Charging interest or fees that were not written and explained.
• Paying a loan to a recruiter without confirming who owes it and why.
• Failing to provide a payslip or a copy of the contract.
• Treating SSS, PhilHealth, or Pag-IBIG remittances as a private loan.
• Keeping a passport, ID, ATM card, or personal document as security.
• Changing the job, address, or pay without updating the contract.

Families often want a signed document because they fear a future dispute. That is sensible, but the document works only when both sides receive the same copy and can understand the entries. A plain-language contract, regular payslips, and a simple running balance are usually more useful than a long form full of undefined legal words.

A simple clause structure to adapt

Do not paste this as a complete contract without checking the regional rules and the actual job. Use it as a structure:

Employment: The employer hires the kasambahay at [address] for [duties], beginning [date], for [monthly wage] paid [schedule]. The regular rest day is [day]. The household includes [description].

Authorized deductions: The parties authorize only these deductions: [lawful contribution or exact item], at [amount or formula], shown on each payslip. No other deduction is allowed unless required by law or agreed in a new written record.

Loan or salary advance: On [date], the employer gave the kasambahay [amount] by [cash or transfer]. The balance is repaid at [installment] on [schedule], beginning [date]. Interest and fees are [none or clearly described]. Each payment will appear on the payslip and the worker will receive an updated balance.

Separation: If employment ends, the parties will prepare a final wage and loan statement and handle any remaining balance according to applicable law. The employer will not hold identity documents as collateral.

For a broader hiring process, see how to hire a kasambahay legally, the kasambahay minimum wage guide, and the kasambahay payslip template guide. Families can also create a family profile on Helpers when they are ready to find a helper.

Frequently Asked Questions

Is a written contract required for a kasambahay in the Philippines?

Yes. Sign it before work starts, use a language or dialect understood by both parties, and give the kasambahay a copy. Include duties, period, compensation, authorized deductions, hours, rest days, leaves, board and lodging, medical attention, deployment expenses, any loan agreement, termination, and other lawful conditions.

Can an employer deduct a loan from a kasambahay salary?

A deduction needs a clear lawful basis and written agreement. Put the exact amount, repayment schedule, and payroll authorization in a separate loan or salary-advance record. Show every installment on the payslip. Do not use the deduction to remove the applicable minimum wage or to withhold all pay.

What should a kasambahay loan agreement include?

Include the parties, amount actually advanced, date, purpose if relevant, interest or no-interest statement, repayment dates, installment amount, authorized payroll deduction, early repayment rule, separation process, signatures, and copies for both parties. Update the balance after each payment.

Who pays SSS, PhilHealth, and Pag-IBIG for a kasambahay?

The household employer must register and report the worker and follow the current contribution rules. Depending on the agency and salary level, the worker may have a defined share that can be deducted, while the employer remains responsible for the employer share and correct remittance. Check current official schedules instead of using an old template.

Can a family keep a kasambahay passport or documents because of a loan?

Do not hold identity documents as collateral. Use a written repayment plan and keep payment records. If a debt dispute involves threats, confinement, withheld wages, or document retention, prioritise safety and contact DOLE or another appropriate official support channel.

The practical answer for families

Write the employment contract first. Then write any loan separately, pay the agreed wage, record every deduction, register the worker, and give both parties copies. A fair contract protects the family and the kasambahay because it makes the job, the money, and the repayment timeline visible from the beginning. When the paperwork is ready, create a family profile on Helpers to start a transparent hiring process.