Employers in the Philippines are required to make statutory contributions to government-mandated social security programs on behalf of their employees. These contributions provide employees with benefits such as retirement, healthcare, housing assistance, disability, and other social security protections.
The three mandatory employer contribution programs are:
Social Security System (SSS) – provides retirement, disability, sickness, maternity, and other social security benefits.
Philippine Health Insurance Corporation (PhilHealth or PHIC) – provides universal health insurance coverage.
Home Development Mutual Fund (HDMF or Pag-IBIG Fund) – provides housing savings and financing benefits.
For more information, visit the official websites:
Social Security System (SSS): https://www.sss.gov.ph
PhilHealth: https://www.philhealth.gov.ph
Pag-IBIG Fund (HDMF): https://www.pagibigfund.gov.ph
How are employer contributions calculated?
Each statutory contribution is governed by a different government agency and follows its own calculation methodology.
Contribution | Calculation Base | Employer Contribution |
Social Security System (SSS) | Employee's actual recurring monthly income | Based on the applicable income bracket in the official SSS Contribution Schedule. |
PhilHealth (PHIC) | Contractual monthly salary, subject to statutory caps | 2.5% of the applicable contribution base. |
Pag-IBIG Fund (HDMF) | Employee's actual monthly income, capped at PHP 10,000 | 2% of the applicable contribution base. |
PhilHealth calculation rules
PhilHealth contributions are calculated differently from the other statutory contributions.
The contribution base is:
Contractual monthly salary;
Capped at PHP 10,000 per month, or
PHP 5,000 per semi-monthly payroll period.
For employees paid on a semi-monthly schedule:
First payroll period: 26th of the previous month through the 10th of the current month.
Second payroll period: 11th through the 25th of the current month.
If an employee begins or ends employment during only one half of the month, the contribution base is calculated using half of the contractual monthly salary, subject to the applicable statutory cap.
Example
Scenario: Mary begins employment on August 1, 2024, with a contractual monthly salary of PHP 12,000. After applying the standard salary proration rules, her payable salary for August is: PHP 9,792.10
The corresponding employer statutory contributions would be:
Contribution | Amount |
Social Security System (SSS) | PHP 960.00 |
PhilHealth (PHIC) | PHP 219.80 |
Pag-IBIG Fund (HDMF) | PHP 195.84 |
Note: This example is provided for illustrative purposes. Actual contributions may vary depending on the employee's salary, payroll cycle, and any future statutory changes.
Frequently Asked Questions
Why are the contribution calculations different?
Each contribution program is administered by a separate government agency with its own legislation, contribution tables, and calculation methodology. As a result, the contribution bases and rates are not identical.
How often do contribution rates change?
There is no fixed schedule for reviewing statutory contribution rates or salary bases.
Each government agency independently announces any changes through official regulations. Employers are required to apply the updated rates from the effective date published by the relevant authority.
Note: Contribution rates and salary ceilings are subject to change. Always refer to the official websites of SSS, PhilHealth, and Pag-IBIG for the latest statutory requirements.