Employer Contribution in the Philippines
In the Philippines, also known as the Pearl of the Orient Seas, employers prioritize the well-being of their employees. They fulfill their obligations by contributing to the Social Security System (SSS), Philippines Health Insurance Corporation (PHIC), and Home Development Mutual Fund (Pag-IBIG). Contributions to the SSS encompassing regular SS, the Mandatory Provident Fund (WISP) and Employee’s Compensation (EC) are calculated based on the employee’s relevant monthly salary credit, which in turn is determined by their monthly compensation.
On the other hand, contributions made to PHIC are calculated based on the employee’s monthly compensation of at least PHP 10,000 up to PHP 80,000, and contributions made to Pag-IBIG are calculated based on the employee’s monthly compensation of up to PHP 5,000. This comprehensive approach ensures that employees can receive the necessary support and benefits while safeguarding their financial security and overall well-being.
Employer Payroll Contribution
| Contribution for Locals | Contribution for Expatriates | |
| Regular SS | 9.5% | 9.5% |
| Mandatory Provident Fund (WISP) | 9.5% | 9.5% |
| Employee’s Compensation (EC) | PHP 10 (or PHP 30 if monthly salary credit is above PHP 14,500) | PHP 10 (or PHP 30 if monthly salary credit is above PHP 14,500) |
| Philippine Health Insurance Corporation (PHIC) | 2% | 2% |
| Home Development Mutual Fund (Pag-IBIG) | 2% | – |
| Total | 23% + PHP 10 (or PHP 30) | 21% + PHP 10 (or PHP 30) |
Employee Payroll Contribution
| Contribution for Locals | Contribution for Expatriates | |
| Regular SS | 4.5% | 4.5% |
| Mandatory Provident Fund (WISP) | 4.5% | 4.5% |
| Philippine Health Insurance Corporation (PHIC) | 2% | 2% |
| Home Development Mutual Fund (Pag-IBIG) | 1%–2% | – |
| Total | 12%–13% | 11% |
It is worth noting that contributions for expatriates in the Philippines are lower than that of their local counterparts since the Home Development Fund (Pag-IBIG) does not apply to them.
Social Security System (SSS)
Since its establishment in 1957, the Social Security System (SSS) has served as a crucial pillar of social insurance coverage for private sector employees in the Philippines. Enacted just three years prior, the Social Security Law (SS Law) laid the foundation for this vital system. The SSS offers a comprehensive range of benefits, including, but not limited to:
| Types of Benefits | Explanation |
| Retirement | For employees who have reached the age of 60 and have completed a minimum of 120 monthly contributions. These benefits can be taken in the form of a monthly pension or a lump-sum amount. |
| Disability | Employees who have contributed for 36 months or more before the semester of their disability will receive a monthly pension. Those who have contributed less will receive a lump-sum payment. |
| Sickness | Employees hospitalized for 3 or more days are entitled to 90% of their daily salary if they have made contributions for at least 3 months in the last year. Employers can get reimbursed for the sickness benefit paid by the SSS. |
| Maternity | Female employees are entitled to 105 days of fully paid maternity leave plus 30 days of unpaid extension. SSS will reimburse the amount paid by the employer to eligible employees who have contributed for at least 3 months in the last 12 months. |
| Death | Beneficiaries or survivors receive a monthly pension as a death benefit if the deceased had paid for at least 36 months before their passing. If not, beneficiaries will receive a lump-sum payment instead. |
| Funeral | Granted to the person who paid for the funeral expenses of the deceased pensioner. |
| Unemployment | A one-off cash benefit for involuntarily unemployed employees who have paid at least 36 monthly contributions, including 12 within the 18-month period preceding separation. |
Furthermore, the SSS oversees the Employees’ Compensation Program (ECP), which provides additional compensation to workers who experience illness, accidents, or fatalities during work-related activities. This program ensures that employees receive double compensation, offering support and protection for workplace-related incidents.
Philippine Health Insurance Corporation (PHIC)
The National Health Insurance Program (NHIP) is a social health insurance program in the Philippines that is funded by contributions made to the Philippine Health Insurance Corporation (PHIC). The NHIP aims to provide access to affordable and quality health care services to all Filipinos, regardless of their social status or economic capacity.
The benefits under the NHIP are comprehensive and include:
| In-patient Benefits | Covers diagnostic or therapeutic procedures, and other hospital charges |
| Out-patient Benefits | Covers medical consultations, diagnostic tests, and preventive health services |
| Z Benefits | High cost medical services that are not typically covered by regular health insurance plans i.e. cancer and bypass surgery |
| *SDG-related benefits | Malaria, HIV-AIDS, Animal bite, etc. |
*Refers to United Nations’ Sustainable Development Goals.
Home Development Mutual Fund (HDMF)
The Home Development Mutual Fund–better known as Pag-IBIG–is a mutual provident savings system for employees to fund their housing. It is funded by contributions made by both the employer and employee. Coverage under this fund is mandatory for employees (expatriates excluded), provided they have not reached 60 years of age and are also covered under SSS. Some of its benefits are housing loans, short-term loans, and other services such as a regular savings program. Overall, the fund offers a range of benefits that can be advantageous for employees who aim to achieve their financial goals.
Slasify: Satisfy your payroll needs in the Philippines
Employers in the Philippines are required to provide their employees with the aforementioned government-mandated benefits. Slasify offers a comprehensive payroll solution that ensures accurate and timely delivery of these benefits, while staying up-to-date with labor laws and regulations.
Additionally, we provide tax compliance and employee benefits administration services to streamline your payroll processes and increase efficiency. Partner with Slasify today for a hassle-free, reliable, and cost-effective payroll solution in the Philippines.
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