Beginner’s Guide to SSS, PhilHealth, and Pag-IBIG Contributions

Nov 25, 2025

Beginner’s Guide to SSS, PhilHealth, and Pag-IBIG Contributions

1. Why Contributions Matter
2. Social Security System (SSS) Contributions
Who Pays?
2025 SSS Contribution Rate (Employee + Employer)
Benefits
How to Compute
3. PhilHealth Contributions
Who Pays?
2025 PhilHealth Rate
Benefits
4. Pag-IBIG Contributions
Who Pays?
Contribution Rate
Benefits
5. How Contributions Affect Take-Home Pay
Net take-home pay = ₱20,000 − ₱1,550 = ₱18,450
6. Tips for Employees and Freelancers

In the Philippines, mandatory contributions to SSS, PhilHealth, and Pag-IBIG are a key part of employment. Understanding these contributions is essential for employees, freelancers, and business owners who want to ensure they are compliant and maximize their benefits. This beginner’s guide explains each contribution, how it is computed, and why it matters.

Mandatory contributions serve several purposes:

  • Social Security System (SSS): Provides retirement, disability, sickness, maternity, and death benefits.

  • PhilHealth: Ensures health insurance coverage for hospitalizations, surgeries, and preventive care.

  • Pag-IBIG Fund: Offers housing loans, savings programs, and short-term loans for members.

Paying these contributions ensures financial security, health coverage, and access to government loans and benefits.

  • Employees: Mandatory payroll deduction

  • Employers: Contribute an employer share

  • Self-employed, voluntary, or OFWs: Must remit on their own

  • Employee: 3.5% – 11% depending on salary

  • Employer: 8.5% – 12% depending on salary

  • Contribution caps apply for high-income earners

  • Retirement pension

  • Sickness or maternity benefits

  • Disability and death benefits

  • Loan privileges (salary, calamity, or housing loans)

  1. Determine your monthly salary credit (MSC)

  2. Multiply by employee contribution rate

  3. Employer computes its share similarly

Example: Salary ₱20,000 × 3.5% → ₱700 (employee share)

  • Employees and employers: Split equally

  • Self-employed: Pay the full contribution

  • OFWs: Pay voluntarily

  • 4.5% of monthly basic salary, split 50/50 between employer and employee

  • Minimum and maximum contribution limits apply

  • Covers hospitalization, surgeries, maternity, preventive care

  • Reduces out-of-pocket medical expenses

Example: Salary ₱20,000 × 4.5% = ₱900 → ₱450 employee + ₱450 employer

  • Employees, employers, and voluntary members

  • 2% of monthly salary from employee (up to ₱5,000 monthly)

  • Employer matches 2%

  • Higher voluntary contributions allowed for more savings

  • Housing loans for home purchase

  • Short-term loans (salary or calamity loans)

  • Savings program: Dividends earned annually

Example: Salary ₱20,000 × 2% = ₱400 employee contribution

Mandatory contributions are deducted from your gross salary. Knowing your deductions helps:

  • Calculate net pay accurately

  • Budget monthly expenses effectively

  • Plan for savings, loans, and retirement

Example: Salary ₱20,000

  • SSS: ₱700

  • PhilHealth: ₱450

  • Pag-IBIG: ₱400

  • Check payroll: Ensure deductions are correct

  • Keep receipts: Useful for loans and benefits claims

  • Update information: Marital status, salary, or dependents may affect deductions

  • For freelancers/self-employed: Remit contributions on time to avoid penalties

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