What are the mandatory employer burden to social liability in the Philippines

GENERAL

In the Philippines, employers have mandatory burdens to social liability which include providing employees with social security benefits such as health insurance, retirement benefits, and disability coverage. Employers are also required to contribute to government-mandated programs including

the Social Security System (SSS) → Republic of the Philippines Social Security System (sss.gov.ph)
and the Home Development Mutual Fund (HDMF), commonly known as Pag-IBIG → (pagibigfund.gov.ph)
the PHIC, also known as the Philippine Health Insurance Corporation, is a government-owned and controlled corporation that provides universal health coverage for Filipinos. → philhealth.gov.ph

For your further understanding of the contribution details, you may find the answers to FAQs

Q: How are the contributions to each burden are being calculated?

A: In the Philippines, 3 different authorities govern the 3 burden items. As a result, the contribution systems for these burdens are not identical.

Please refer to the following table details of contributions

Burden Items	Base	Contributions	Remark
Social Security System (SSS)	Actual Recurring Income for the corresponding month	Check the amount required for the corresponding income range in the table → SSS Schedule of Contributions
PHIC	Contractual base income, but capped at - PHP 10,000 per month - PHP 5,000 per semi month	Base X 2.5 %	The semi-monthly payroll cycle in the Philippines is 26th of last month to 10th for 1st half and 11th to 25th of current month for 2nd half. ^{For the first or last payroll period where an individual only has valid employment falling under 1st Half Month or 2nd half only, half of their basic salary with a ceiling of 50,000 will be considered as the base amount.}
Home Development Mutual Fund (HDMF)	Actual Total Income for the corresponding month but capped at PHP10,000	Base x 2%

Q: The table seems complicated. To elaborate in further, please refer to the following example.

e.g. Mary has got her employment of agreement commenced on 1st August 2024 with monthly basis salary agreed at PHP 12,000, then in payroll month of August 2024,

The payable income for Mary in Aug 2024 → How are salaries prorated in the Philippines?

= prorated 1st half + full pay 2nd half = 6000 - (12,000/21.75*4) + 6000 = PHP 9792.10

the contribution by employer for each burden shall be

SSS = PHP 960

PHIC = 3792.10*2.5% + 5000*2.5% = 94.80 + 125 = PHP 219.8

HDMF= 9792.10 * 2% = PHP 195.84

Q. How frequent shall we expect the bases and contribution rates being reviewed in the Philippines?

A: There is currently no confirmed schedule for the contribution bases and rates for each item. However, it is important to note that the current rates for PHIL will remain valid until the end of 2025. The announcement of any changes to the contribution rate is pending and will be made by the relevant authority in due course.

In case of any further questions or elaboration need, please feel free to contact us with Help Widget with Horizons Portal

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What are the mandatory employer burden to social liability in the Philippines