Employer’s Guide to Government-Mandated Employee Benefits in the Philippines

Published: July 6, 2018 | Updated: November 17, 2020 | Posted by: Venus Zoleta | Government Services

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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.

Pag-IBIG, PhilHealth, and SSS Employee Benefits

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Under the Philippine Labor Code[1], 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.

Who Can Receive Mandatory Employee Benefits?

Government-mandated benefits from the Pag-IBIG, PhilHealth, and SSS cover the following workers:

  • Permanent, temporary, or provisional employees (hired by private companies) under the age of 60 with a monthly income of more than PHP 1,000
  • Household workers with a monthly income of at least PHP 1,000, including kasambahays, drivers, cooks, and gardeners.
  • Filipinos working for Philippine-based or foreign-based employers and are working locally or overseas
  • Foreigners not older than 60 years old who are living and working in the Philippines, except for those who are exempted under the country’s totalization agreements

Employer Registration with Pag-IBIG, PhilHealth, and SSS

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:

  • Micro-enterprise: Mayor’s Permit or Barangay Certification
  • Single proprietorship: Business Permit or Registration of Business Name from DTI
  • Partnership or Philippine corporation: Articles of Partnership/Incorporation from the Securities and Exchange Commission
  • Foreign-owned corporation: Articles of Incorporation and License to Transact Business in the Philippines
  • Cooperative: Certificate of Registration from the Cooperative Development Authority[2].

How to Register as a Business Employer with Pag-IBIG

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Visit the Pag-IBIG branch that maintains your records and then submit the following requirements:

  • Employer’s Data Form
  • Specimen Signature Form
  • SSS Certification (if you’re registered with SSS already)
  • Proof of business existence

How to Register as a Business Employer with PhilHealth

Fill out and submit these documents to any PhilHealth office:

  • Proof of business existence
  • Two copies of Employer Data Record form (ER1)[3]
  • Two copies of PhilHealth Membership Registration Form (PMRF) for each employee

How to Register as a Business Employer with SSS

Fill out and submit the Employer Registration (SSS Form R-1)[4] and Employment Report (SSS Form R-1A)[5] plus a photocopy of your proof of business existence to the nearest SSS office.

How to Register as a Household Employer

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:

  • Household Employer Unified Registration Form
  • Household Employment Unified Report Form (three copies)
  • Kasambahay Unified Registration Form
  • SSS Specimen Signature Card (SSS Form L-501)
  • Pag-IBIG Specimen Signature Form

New Employee Registration with Pag-IBIG, PhilHealth, and SSS

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.

How to Register New Employees with Pag-IBIG

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[6].

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.

How to Register New Employees with PhilHealth

Submit these documents to the PhilHealth office where your business is registered:

  • Accomplished PMRFs of new hires (whether they’re PhilHealth members or not)
  • Two copies of PhilHealth Report of Employee-Members form (ER2)

How to Register New Employees with SSS

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.

How to Register Newly Hired Kasambahays

You can register your new kasambahay with Pag-IBIG, PhilHealth, and SSS through the Kasambahay Unified Registration, a one-stop shop online registration facility.

Remitting Your Employees’ Government Contributions

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.

How Much Should Employers Contribute?

Pag-IBIG Contribution Rates

Monthly Basic SalaryEmployer ShareEmployee Share
PHP 1,500 and below2%1%
Over PHP 1,5002%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.

PhilHealth Contribution Rates

Monthly Basic SalaryEmployer ShareEmployee ShareTotal Premium
PHP 10,000 and belowPHP 137.50PHP 137.50PHP 275.00
PHP 10,000.01 to PHP 39,999.99PHP 137.51 to PHP 549.99PHP 137.51 to PHP 549.99PHP 275.02 to PHP 1,099.99
PHP 40,000.00 and abovePHP 550.00PHP 550.00PHP 1,100.00

Employers and employees equally share the monthly contributions to PhilHealth.

SSS Contribution Rates

SSS schedule of contributions

Photo from the SSS website

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).

Payment Due Dates to Remember

To avoid penalties for late remittances, it’s important to take note of the contribution payment due dates of each government agency.

Pag-IBIG Contribution Payment Deadlines

Here are the Pag-IBIG Fund payment due dates (following the applicable month) according to the first letter of employer or business name:

  • A to D: 10th to 14th day of the month
  • E to L: 15th to 19th day of the month
  • M to Q: 20th to 24th day of the month
  • R to Z and 0 to 9: 25th to the last day of the month

PhilHealth Contribution Payment Deadlines

Payment deadlines (following the applicable month) for PhilHealth are based on the last digit of the PhilHealth employer number:

  • 0 to 4: 11th to 15th day of the month
  • 5 to 9: 16th to 20th day of the month

SSS Contribution Payment Deadlines

For SSS contribution payments, the due dates (following the applicable month) are based on the 10th digit of the employer’s ID number.

  • 1 or 2: 10th day of the month
  • 3 or 4: 15th day of the month
  • 5 or 6: 20th day of the month
  • 7 or 8: 25th day of the month
  • 9 or 0: Last day of the month

How to Pay Pag-IBIG, PhilHealth, and SSS Contributions

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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:

  • Pag-IBIG: Member’s Contribution Remittance Form (MCRF)
  • PhilHealth: Electronic Premium Remittance System (EPRS)
  • SSS: Contribution Collection List (SSS Form R-3) and Employer Contributions Payment Return (SSS Form R-5)

Penalties for Violation of Rules on Mandatory Employee Benefits

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.

Criminal penalties for failure to register, update records, or deduct and report government contributions:

  • Pag-IBIG: A fine of not less than but not more than twice of the unpaid amount, six-year maximum imprisonment, or both
  • PhilHealth: A fine of PHP 5,000 to PHP 10,000 multiplied by the total number of employees of the company
  • SSS: A fine of PHP 5,000 to PHP 20,000, imprisonment of up to 12 years, or both

Penalties for late remittance:

  • Pag-IBIG: 1/10 of 1% of the amount due per day of delay
  • PhilHealth: 2% of the amount due per month of delay
  • SSS: 3% of the amount due per month of delay

Final Thoughts

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.