Philippines Statutory Contribution Hike: Ensuring Financial Stability Amidst Evolving Requirements | Lockton (2024)

FAQs

What is the statutory contribution for the Philippines in 2024? ›

However, starting February 2024, the monthly fund salary (MFS) will rise from P5,000 to P10,000. This increase will be accompanied by a corresponding rise in the contribution rate from 1% to 2%.

The four main statutory contributions employers must deduct from employees' salaries are income tax, social security, health insurance, and the Home Development Mutual Fund.

It can range from ₱4,000 to ₱30,000.

Look for your monthly income bracket in the Range of Compensation column. Go to the rightmost column of the Monthly Salary Credit section, then get your corresponding MSC. Compute your monthly SSS contribution using this formula: MSC x Contribution Rate = Monthly Contribution Amount.

The new salary rates that is effective on January 1, 2024 pursuant to EO No. 64, s. 2024 shall be in accordance with the First Tranche Monthly Salary Schedule for Civilian Personnel, which is attached as AnnexA to this Circular.

The most recent update indicates that the SSS will witness stability in 2024, with no expected change to the 14 percent total contribution rate. Employers will continue to contribute 9.5 percent, while employees will retain their 4.5 percent share.

This setup means members and their employers each contribute ₱100 monthly towards the member's savings. However, from February, the MFS will rise to P10,000, meaning both employee and employer Pag-IBIG contributions will be ₱200.

mandatory coverage shall contribute an amount equivalent to 2% of his/her monthly compensation. Said employee may opt to pay the employer counterpart.

Benefits from Mandatory Contributions (SSS, PhilHealth, PagIBIG) By law, employers must withhold contributions from employees for their Social Security System (SSS), PhilHealth, and Pag-IBIG benefits.

Your monthly pension is ₱1,200 if your CYS is between 10 and 20 years. Your monthly pension is ₱3,400 (₱2,400 + ₱1,000) if your CYS is 20 years or more.

Can I stop paying SSS after 10 years? ›

However, once you become a covered SSS member, you become a member for life. The contributions that you remit become savings for the future that will serve as basis for the granting of social security benefits in times of contingencies. Membership cannot be withdrawn and contributions paid cannot refunded.

If you earned Social Security benefits, you can visit or live in most foreign countries and still receive payments.

The contribution rates for land-based OFWs are as follows: For those earning a monthly salary of PHP 10,000 or less, the contribution rate is 14% of the regular monthly salary credit. For example, your monthly salary credit is PHP 9,500, so in this case, your contribution amount would be PHP 1,330 (₱9500 x 14%).

Both private and government employees must contribute to the Pag-IBIG Fund and PhilHealth. Membership is optional, however, for self-employed persons, Overseas Filipino Workers (OFWs), and Non-Working Spouses (NWSs). Foreign nationals working in the Philippines must also make contributions to SSS, HDMF, and PhilHealth.

There's no penalty if you miss a payment, but the SSS doesn't let you pay retroactively for missed contributions.

₱10,000 x 0.02 = ₱200

Note: Despite having small calculated contributions, the minimum contribution now is set at ₱200 in 2024 for all employed Pag-IBIG members.

Highlights of changes for 2024. The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans, as well as the federal government's Thrift Savings Plan is increased to $23,000, up from $22,500. The limit on annual contributions to an IRA increased to $7,000, up from $6,500.

The International Monetary Fund (IMF) also predicts that the Philippine economy will grow by 6.0 percent in 2024, supported by acceleration in public investment and improved external demand for the Philippines' exports.