Published: July 6, 2018 | Updated: March 20, 2020 | Posted by: Venus Zoleta | Government Services
As an employer, you’re expected to comply with laws that protect the rights of employees against unfair labor practices. Regardless of the nature of your business and the number of people you hire, you have a legal and moral responsibility to provide your workers with government-mandated employee benefits under the Labor Code of the Philippines.
Whether you’re a business employer, a household employer, or an HR practitioner, here are the critical things you need to know about mandatory employee benefits in the Philippines.
Table of Contents
Under the Philippine Labor Code, employees are entitled to monetary benefits such as the minimum wage, 13th month pay, and overtime pay, among many others.
In addition, the Labor Code also requires employers to become members of the Pag-IBIG Fund, PhilHealth, and SSS, as well as remit monthly contributions on behalf of their employees to these government offices. This ensures that employees have access to affordable house financing, health insurance, and social security benefits, as mandated by the law.
Government-mandated benefits from the Pag-IBIG, PhilHealth, and SSS cover the following workers:
You need to register your business or company with Pag-IBIG, PhilHealth, and SSS to become an employer-member of these agencies. Only after doing so can you provide employee benefits mandated by the government.
When you register your business with the Department of Trade and Industry (DTI) through the Philippine Business Registry (PBR), you’ll also get your Pag-IBIG, PhilHealth, and SSS Employer’s Registration Numbers.
But if you fail to register through the PBR, go to each of the government offices and submit your proof of business existence according to the type of your business:
Visit the Pag-IBIG branch that maintains your records and then submit the following requirements:
Fill out and submit these documents to any PhilHealth office:
Fill out and submit the Employer Registration (SSS Form R-1) and Employment Report (SSS Form R-1A) plus a photocopy of your proof of business existence to the nearest SSS office.
Pag-IBIG, PhilHealth, and SSS have a unified registration process for household employers. If you hired a kasambahay, fill out and submit these documents to any branch of the three government offices:
Each time you hire an employee or household worker, you’re responsible for updating Pag-IBIG, PhilHealth, and SSS about the new employment. This will ensure the accuracy of the employee’s records, especially their contributions, with these government agencies.
Ask your new employees to submit their Pag-IBIG Membership ID (MID) Number to you. Those without an MID number can register as a Pag-IBIG member online.
To report your new employees, simply add them to the Member’s Contribution Remittance Form (MCRF) when remitting your company’s monthly Pag-IBIG contribution. Under the last column (“REMARKS”), indicate “N” (new hire) and the hiring date in MM/DD/YY format.
Submit these documents to the PhilHealth office where your business is registered:
Ask your new employees to submit their SSS number to you. Require the non-SSS members to register at the SSS branch where your company is registered.
When you have the SSS numbers of all your new hires, fill out and submit an SSS Form R1-A to the branch where your company is registered. Alternatively, you can submit the form online via the My.SSS online facility. Before you can do that, you need to register for an SSS online employer account.
You can register your new kasambahay with Pag-IBIG, PhilHealth, and SSS through the Kasambahay Unified Registration, a one-stop shop online registration facility.
Philippine labor laws require employers to deduct the monthly government contributions from their employees’ salaries and pay both the employee and employer share of contributions to Pag-IBIG, PhilHealth, and SSS.
|Monthly Basic Salary||Employer Share||Employee Share|
|PHP 1,500 and below||2%||1%|
|Over PHP 1,500||2%||2%|
The maximum monthly compensation used to compute an employee’s Pag-IBIG contribution is PHP 5,000. For employees earning higher than PHP 5,000, the total contribution is PHP 200—you’ll have to deduct PHP 100 from their salary and subsidize the other PHP 100.
|Monthly Basic Salary||Employer Share||Employee Share||Total Premium|
|PHP 10,000 and below||PHP 137.50||PHP 137.50||PHP 275.00|
|PHP 10,000.01 to PHP 39,999.99||PHP 137.51 to PHP 549.99||PHP 137.51 to PHP 549.99||PHP 275.02 to PHP 1,099.99|
|PHP 40,000.00 and above||PHP 550.00||PHP 550.00||PHP 1,100.00|
Employers and employees equally share the monthly contributions to PhilHealth.
Currently, the SSS contribution rate is 11% of an employee’s monthly salary credit, 7.37% of which is shouldered by the employer and 3.63% is deducted from the salary. In addition to the employer share, you’ll also have to pay for your monthly contribution to the Employees’ Compensation program that costs PHP 10 (for workers earning below PHP 14,750) or PHP 30 (for those earning over PHP 14,750).
To avoid penalties for late remittances, it’s important to take note of the contribution payment due dates of each government agency.
Here are the Pag-IBIG Fund payment due dates (following the applicable month) according to the first letter of employer or business name:
Payment deadlines (following the applicable month) for PhilHealth are based on the last digit of the PhilHealth employer number:
For SSS contribution payments, the due dates (following the applicable month) are based on the 10th digit of the employer’s ID number.
After deducting the monthly government contributions from your employees’ salaries, remit them along with your employer share to Pag-IBIG, PhilHealth, and SSS branches or their authorized collecting partners such as banks, Bayad Center, and SM payment counters.
The easiest way is to use Bancnet’s e-Gov, the centralized online facility for Pag-IBIG, PhilHealth, and SSS contribution filing and payments. It’s also convenient because you can access its 24/7 service anytime. (Note: SSS contribution payments are temporarily disabled on the e-Gov site as of June 2018.)
The government agencies also require you to prepare and submit remittance reports that serve as proof of employer’s monthly contribution payments.
Here are the contribution remittance forms you’ll use when filing and paying government contributions:
Make sure to register, update your employer and employee records, and pay contributions on time to avoid penalties. If you fail or refuse to remit contributions deducted from employee salaries, your workers will still be entitled to government-mandated employee benefits. However, their loan applications with Pag-IBIG or SSS won’t be approved.
Your employees can check if you’re remitting their Pag-IBIG, PhilHealth, and SSS contributions. If they find out that you aren’t paying, they can file a complaint against your company, and you might be fined and jailed for violation of Philippine labor laws.
Complying with government-mandated employee benefits in the Philippine is a serious business. If you take them for granted, it will cost you not just money but also your company’s reputation. Thus, be sure to know and understand all the mandatory employee benefits you must provide as an employer.