Why Statutory Contributions Belong in Every Payroll Run
Every employer in the Philippines is required by law to deduct and remit contributions to three government agencies on behalf of each employee: the Social Security System (SSS), the Philippine Health Insurance Corporation (PhilHealth), and the Home Development Mutual Fund, commonly known as Pag-IBIG. These are not taxes collected by the Bureau of Internal Revenue, but they are just as mandatory, and getting them wrong exposes a business to penalties, interest, and in some cases criminal liability under the SSS charter and the Universal Health Care Act.
Each agency sets its own contribution rate, its own salary bracket or "credit" used as the computation base, and its own remittance deadline. Because these figures are revised periodically by law or by agency circular, treat the rates below as the 2026 baseline and always cross-check against the official SSS, PhilHealth, and Pag-IBIG issuances before finalizing a payroll run, since agencies can adjust brackets or ceilings mid-year.
SSS Contribution Rates and Salary Credit for 2026
Under Republic Act No. 11199 (the Social Security Act of 2018), SSS contribution rates followed a legislated increase schedule that culminated in a 15% total contribution rate effective January 2025. This 15% rate — split 10% for the employer and 5% for the employee — is the rate carried into 2026, since the law's scheduled increases stopped at that level. The monthly salary credit (MSC), which is the base used to compute contributions, currently ranges from a minimum of ₱5,000 to a maximum of ₱35,000.
Contributions on the portion of an employee's MSC above ₱20,000 are credited to the Workers' Investment and Savings Program (WISP), a mandatory provident fund layered on top of the regular SSS fund, while the ER/EE split percentages remain the same. Employers should always pull the current SSS Contribution Schedule (Circular-issued table) to match an employee's actual compensation to the correct MSC bracket, since SSS uses fixed brackets rather than a straight percentage of raw salary.
SSS also requires a small Employees' Compensation (EC) contribution, shouldered entirely by the employer, which is bundled into the same contribution table. Regular monthly remittance is generally due by the last day of the month following the applicable payroll month, filed through the SSS R-3 collection list or the employer's My.SSS online facility.
PhilHealth Premium Rates for 2026
PhilHealth premiums are governed by the Universal Health Care Act (RA 11223), which laid out a yearly increase schedule from 3% in 2020 toward a target ceiling. That schedule reached 5% in 2024, and the further increase originally planned for 2025 was suspended, keeping the premium rate at 5% of monthly basic salary. This 5% rate, split equally between employer and employee (2.5% each), remains the applicable rate for 2026 pending any new law or Universal Health Care Board issuance.
The premium is computed on monthly basic salary with an income floor of ₱10,000 and an income ceiling of ₱100,000 — meaning an employee earning below ₱10,000 is still assessed on the ₱10,000 floor, and anyone earning above ₱100,000 is capped at that ceiling for premium computation purposes. Employers file and remit through the PhilHealth Electronic Premium Remittance System (EPRS), generally on or before the last day of the month following the applicable period, supported by the RF-1 remittance report.
Pag-IBIG Fund Contributions for 2026
Pag-IBIG contributions follow a simpler structure. Employees earning ₱1,500 or below contribute 1% of monthly compensation, while those earning above ₱1,500 contribute 2%; the employer share is fixed at 2% regardless of the employee's bracket. Since the fund adjusted the maximum monthly compensation used for computation from ₱5,000 to ₱10,000 in 2024, the highest possible monthly contribution per party is ₱200 (2% of ₱10,000), for a combined maximum of ₱400 per employee per month, and this ceiling continues to apply for 2026 unless Pag-IBIG issues a new circular.
Employers remit through the Pag-IBIG Fund's Electronic Submission/Remittance System (ESRS), typically due within the second half of the month following the applicable period, depending on the employer's registered payment schedule. Note that many employers and employees voluntarily contribute more than the mandatory minimum to qualify for higher Pag-IBIG MP2 savings or housing loan eligibility; those additional amounts are not part of the mandatory statutory deduction.
Computing Employer and Employee Shares: A Worked Example
Consider an employee with a monthly basic salary of ₱25,000.
SSS: at the applicable MSC bracket matching ₱25,000, the total contribution at 15% is roughly ₱3,750. The employee share (5%) is approximately ₱1,250, and the employer share (10%, inclusive of the EC contribution) is approximately ₱2,500. Because the MSC exceeds ₱20,000, part of this amount is credited to WISP rather than the regular SSS fund, though the employee and employer still remit it as one combined payment.
PhilHealth: the monthly premium is 5% of ₱25,000, or ₱1,250 total, split evenly into ₱625 for the employee and ₱625 for the employer.
Pag-IBIG: since monthly compensation exceeds ₱1,500, the employee contributes 2% of the ₱10,000 computation cap, or ₱200, and the employer contributes another ₱200, for a combined ₱400.
Adding these up, the employee's total statutory deduction for the month is ₱1,250 + ₱625 + ₱200 = ₱2,075, while the employer's total counterpart liability is ₱2,500 + ₱625 + ₱200 = ₱3,325. This employer amount is a real payroll cost on top of gross salary and should be budgeted separately from the employee's net pay computation. In Kontabler, an employee's monthly compensation is matched to the current SSS, PhilHealth, and Pag-IBIG brackets automatically, and both the employee and employer shares are computed and posted to your books as part of each payroll run, so bookkeepers do not need to manually look up contribution tables every cycle.
Staying Compliant as Rates Change
SSS, PhilHealth, and Pag-IBIG contribution rates, salary credit brackets, and remittance deadlines are set by law or agency circular and are historically adjusted on a near-annual basis. A business should review each agency's official contribution table at the start of every year, or whenever a circular is issued mid-year, rather than assuming the prior year's figures still apply. Late remittance carries real cost: SSS imposes a penalty of 2% per month on unpaid contributions, PhilHealth charges interest on delayed premiums, and Pag-IBIG assesses a daily penalty on late remittances, on top of possible administrative or legal consequences for repeated non-compliance. Building a habit of reconciling payroll deductions against the current official tables each pay period is the simplest way to avoid these penalties.
Frequently asked questions
Are SSS, PhilHealth, and Pag-IBIG contributions mandatory for all employees?
Yes. Every employer-employee relationship in the Philippines, including probationary and part-time work, requires mandatory coverage and contribution under all three agencies, separate from any voluntary or OFW membership rules.
What happens if an employer remits contributions late?
Each agency imposes its own penalty: SSS charges a monthly penalty on unpaid contributions, PhilHealth adds interest on delayed premiums, and Pag-IBIG assesses a daily penalty, on top of possible administrative or legal action for repeated non-remittance.
Do minimum wage earners pay a different SSS, PhilHealth, or Pag-IBIG rate?
No special exemption applies to these three contributions for minimum wage earners; the same rate and bracket tables apply based on actual monthly compensation, unlike income tax, where minimum wage earners are exempt.
Can these 2026 rates change again during the year?
Yes. SSS, PhilHealth, and Pag-IBIG rates and salary brackets are set by law or agency circular and can be revised mid-year, so employers should check each agency's official contribution table regularly rather than relying on a fixed annual figure.
