How to Compute Your Mandatory Contributions Automatically

How to Compute Your Mandatory Contributions Automatically

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1. Why Automate Your Contributions

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2. Mandatory Contributions in the Philippines

Contribution	Rate (2025)	Who Pays	Benefits
SSS	3.5%–11% (employee)	Employee + Employer	Retirement, sickness, maternity, disability, death, loans
PhilHealth	4.5% of monthly salary	Employee + Employer	Hospitalization, surgeries, maternity, preventive care
Pag-IBIG	2% of monthly salary	Employee + Employer	Housing loans, short-term loans, savings

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3. Steps to Automate Computation
Step 1: Gather Your Income Data

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Step 2: Know the Contribution Rates

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Step 3: Use Online Calculators

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Step 4: Spreadsheet Automation
=GrossSalary * 0.035 // SSS employee share
=GrossSalary * 0.045 // PhilHealth
=GrossSalary * 0.02 // Pag-IBIG
NetSalary = GrossSalary - (SSS + PhilHealth + PagIBIG)
=IF(GrossSalary>20000, 700, GrossSalary*0.035) // SSS capped at 700

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Step 5: Payroll Software

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4. Benefits of Automation

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5. Example

Contribution	Rate	Computed Amount
SSS	3.5%	₱875
PhilHealth	4.5%	₱1,125 (split ₱562.50 employee + ₱562.50 employer)
Pag-IBIG	2%	₱500
Total Deductions		₱1,937.50
Net Salary		₱23,062.50

Calculating SSS, PhilHealth, and Pag-IBIG contributions every month can be tedious, especially if you have multiple income sources or variable pay. Automating this process helps ensure accuracy, saves time, and avoids penalties. This guide explains how to compute your mandatory contributions automatically, whether you’re an employee, freelancer, or business owner.

Manual computation of contributions can lead to:

• Errors in deductions → affects take-home pay and benefits

• Late payments → penalties and fines from government agencies

• Time-consuming processes → especially for payroll or freelancers with multiple clients

Automation ensures:

• Accurate deductions every month

• Real-time net pay calculation

• Easy record-keeping for annual filing and loans

Before automating, you must understand what needs to be computed:

Freelancers or self-employed pay the full share of contributions.

• Monthly salary, allowances, commissions, bonuses

• Any additional taxable income

• Refer to current SSS, PhilHealth, and Pag-IBIG tables (2025 rates)

• Make sure to know minimum and maximum contribution caps

Several online tools automatically compute contributions:

• SSS Contribution Table Calculator (BIR/SSS website)

• PhilHealth Contribution Calculator (official site or partner payroll tools)

• Pag-IBIG Contribution Calculator

Steps:

1. Input monthly or annual salary

2. Select employment type: regular, freelancer, self-employed

3. Enter other relevant info: marital status, dependents (if applicable)

4. Click Compute → get employee and employer contribution

For repeated calculations, you can automate using Excel or Google Sheets:

• Create columns for: Gross Salary, SSS, PhilHealth, Pag-IBIG, Net Salary

• Use formulas like:

• Add IF statements to handle caps or thresholds:

• Once set up, inputting a new salary automatically updates contributions.

If you handle multiple employees:

• Use payroll software (QuickBooks, Sprout, PayrollHero, or custom Excel)

• Input salary and deduction rates → software computes contributions and withholding tax automatically

• Generates payslips and contribution reports for SSS, PhilHealth, and Pag-IBIG

• Accuracy: Reduces manual errors

• Time-saving: Computes multiple employees or variable salaries quickly

• Compliance: Ensures correct remittance to government agencies

• Transparency: Employees can see detailed breakdowns of contributions

• Flexibility: Easy to update rates annually (TRAIN law or contribution updates)

Suppose your monthly gross salary is ₱25,000:

Using a spreadsheet or online calculator, this computation can be done instantly, even for dozens of employees.