Understanding Employer Contribution and the Philippines SSS

5 Key Takeaways
Employers in the Philippines must contribute to SSS, PHIC, and Pag-IBIG for employee benefits.
Contribution rates differ for locals and expatriates, ensuring compliance with local laws.
SSS provides retirement, disability, maternity, sickness, death, funeral, and unemployment benefits.
PHIC covers in-patient, out-patient, Z benefits, and SDG-related healthcare services.
Pag-IBIG offers housing loans, short-term loans, and savings programs for employees under 60.

In the Philippines, employers play a crucial role in ensuring employee welfare through mandatory employer contributions to government programs such as the Philippines Social Security System (SSS), the Philippines Health Insurance Corporation (PHIC), and the Home Development Mutual Fund (Pag-IBIG). These contributions collectively safeguard employees’ health, financial stability, and retirement security.

Under the Social Security Act of 2018 (Republic Act No. 11199), all private-sector employers are legally required to register their employees with the SSS and remit monthly contributions. This framework underscores the Philippines’ commitment to social protection, labor welfare, and payroll compliance.

For international businesses expanding into the Philippines, understanding these regulations is essential. Partnering with an Employer of Record (EOR) Philippines provider such as Slasify simplifies the process by ensuring full compliance with local payroll and tax regulations while managing all mandatory contributions on behalf of the employer.

Employer Contribution Overview

Employers in the Philippines are required to remit monthly contributions for both local and expatriate employees. These include allocations to the Philippines Social Security System SSS, PHIC, and Pag-IBIG. The employer contribution ensures that workers remain covered and can access vital benefits when needed.

Employer Payroll Contribution

Type of Contribution	Contribution for Locals	Contribution for Expatriates
Regular SS	9.5% 10%	9.5% 10%
Mandatory Provident Fund (WISP)	9.5% 10%	9.5% 10%
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

Type of Contribution	Contribution for Locals	Contribution for Expatriates
Regular SS	4.5% 5%	4.5% 5%
Mandatory Provident Fund (WISP)	4.5% 5%	4.5% 5%
Philippine Health Insurance Corporation (PHIC)	2%	2%
Home Development Mutual Fund (Pag-IBIG)	1%–2%	–
Total	12%–13%	11%

Key takeaway: Employers are legally mandated to ensure that all government contributions are up to date. Late or inaccurate remittances may trigger post-payment adjustments (PPA) or payroll reconciliation, potentially leading to penalties and compliance risks under Philippine labor laws.

 

The Philippines Social Security System (SSS)

Established in 1957, the Philippines Social Security System (SSS) remains a cornerstone of private sector employee protection. The system offers a comprehensive range of benefits funded through employer contributions and employee deductions.

Benefit Type	Description
Retirement	Available for members aged 60+ with at least 120 months of contributions. Benefits can be received as a pension or a lump sum.
Disability	Monthly pension for members with 36+ months of contributions before disability; otherwise, a lump-sum benefit.
Sickness	Provides 90% of the daily salary for at least three days of confinement, given three months of contributions within the last year.
Maternity	Female employees receive 105 days of paid leave, reimbursable through SSS.
Death & Funeral	Beneficiaries receive a pension or lump-sum benefit.
Unemployment	Cash assistance for involuntarily separated employees who meet contribution requirements.

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.

“We’ve heard the clamor for higher pensions loud and clear. The SSS is the solution.”
— Rolando Ledesma Macasaet, President and CEO, Philippines Social Security System (SSS)

Key takeaway:

Timely and accurate contribution reporting ensures continued access to SSS benefits and compliance with Philippine labor and payroll standards.

 

Philippine Health Insurance Corporation (PHIC)

The Philippine Health Insurance Corporation (PHIC) manages the National Health Insurance Program (NHIP), which provides affordable healthcare services to all Filipinos. Contributions are shared between the employer and employee, forming part of the mandatory employer contribution system. 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 the United Nations’ Sustainable Development Goals.

"We've heard the clamor for higher pensions loud and clear. The SSS is the solution."

— Robert Joseph M. De Claro, President and CEO of the Social Security System (SSS)

Key takeaway:

Consistent employer contribution to PHIC ensures that employees can access necessary healthcare while promoting a healthy, productive workforce.

 

Home Development Mutual Fund (Pag-IBIG)

The Home Development Mutual Fund (Pag-IBIG), also known as the Pag-IBIG Fund, provides employees with housing and savings opportunities. It is mandatory for all Filipino employees under 60 who are covered by the Philippines Social Security System SSS.

Key takeaway:

Accurate and timely employer contribution to Pag-IBIG allows employees to enjoy long-term benefits such as affordable housing loans and short-term financial assistance.

 

Slasify: Simplifying Payroll and Compliance in the Philippines

Managing multi-agency payroll compliance can be challenging for global employers unfamiliar with Philippine regulations. As a trusted Employer of Record (EOR) Philippines provider, Slasify simplifies payroll management and ensures compliance with all local labor laws.

Slasify’s global payroll solution automates calculation and remittance of employer contributions to SSS, PHIC, and Pag-IBIG, while also supporting post-payment adjustments (PPA) and payroll reconciliation. This helps minimize manual errors and guarantees compliance with the Department of Labor and Employment (DOLE) requirements.

FAQ for Employer Contribution and the Philippines Social Security System (SSS)

1. What is the Philippines Social Security System (SSS), and why is it important for employees?

The Philippines Social Security System (SSS) is a government-mandated social insurance program designed to provide financial protection for employees and their families. It offers benefits covering retirement, disability, sickness, maternity, death, funeral, and unemployment. Regular and accurate employer contribution to SSS ensures continuous access to these benefits and compliance with national labor laws.

2. How are employer contributions to the Philippines Social Security System (SSS) calculated for local and expatriate employees

The employer contribution to the Philippines Social Security System SSS is based on the employee’s monthly salary credit, following the official SSS contribution schedule. For local employees, the total employer share typically equals 9.5% of the monthly salary credit plus contributions to other funds, bringing the overall cost to around 23% + PHP 10 (or PHP 30 for higher salaries). Expatriates contribute slightly less since the Pag-IBIG Fund is not mandatory for them.

3. What benefits are covered under the Philippine Health Insurance Corporation (PHIC)?

The Philippine Health Insurance Corporation (PHIC) administers the National Health Insurance Program (NHIP), providing access to affordable healthcare for all Filipino employees. Benefits include inpatient coverage, outpatient consultations, diagnostic and preventive services, and high-cost medical treatments (Z benefits) such as for cancer and heart surgery. 

Consistent employer contribution to PHIC ensures continuous coverage and compliance with the Universal Health Care Act (Republic Act No. 11223).

4. Who is required to contribute to the Home Development Mutual Fund (Pag-IBIG)?

Under the Pag-IBIG Fund Law (Republic Act No. 9679), all Filipino employees under 60 who are registered with the Philippines Social Security System SSS are required to make Pag-IBIG contributions, which include a corresponding employer contribution. 

These contributions enable employees to access housing loans, short-term loans, and savings programs that promote long-term financial stability. Expatriates are generally excluded unless they choose to register voluntarily.

5. How can Slasify help employers manage payroll, compliance, and contributions in the Philippines?

Slasify provides a fully compliant payroll and employer contribution management solution for businesses operating in the Philippines.

The platform automates remittances to SSS, PHIC, and Pag-IBIG, manages post-payment adjustments (PPA), ensures timely tax filing, and streamlines payroll reconciliation.

With Slasify, employers can stay compliant with Philippine labor and social security laws while ensuring employees receive their rightful benefits accurately and on time.

About Slasify

Founded in 2016 in Taiwan and now headquartered in Singapore, Slasify began with a vision. We saw the rapid expansion of businesses outpacing traditional work models. Inspired by the rise of the internet and the growing demand for flexibility, our founders created Slasify to bridge the gap between global businesses and remote talent. What started as a small team with a big dream has grown into a global powerhouse. Today, Slasify serves over 150 countries and operates in 130 currencies, empowering businesses to expand without borders. Read more!