Statutory Contributions in the Philippines: 2026 Employer Payroll Guide

Expanding your business and hiring in the Philippines gives you access to one of Southeast Asia’s most dynamic and adaptable workforces. The country is known for its high English proficiency, strong work ethic, and deep talent pool across industries like customer service, IT, finance, healthcare, and creative fields. Filipino professionals are also widely recognized for their cultural compatibility with Western markets, making them valuable assets for companies building regional or global teams.

However, tapping into this promising talent market also comes with important compliance responsibilities. Employers must follow local labor laws, including making mandatory statutory contributions that support employee welfare, such as healthcare, social security, and housing.

In other words, while the Philippines offers a wealth of skilled professionals to power your growth, success in hiring and retaining them begins with understanding and fulfilling your obligations as an employer. Let’s explore what these statutory contributions are and how they work.

Statutory Contributions in the Philippines at a Glance

Employers in the Philippines are generally responsible for calculating, withholding, and remitting several mandatory payroll related items. These include SSS, PhilHealth, Pag IBIG, employee withholding tax, and 13th month pay.

As of the latest official contribution schedules:

• SSS: 15 percent total contribution based on Monthly Salary Credit, split between 10 percent employer share and 5 percent employee share, with the Monthly Salary Credit capped at PHP 35,000. Employers also pay the Employees Compensation Program contribution, which is PHP 10 or PHP 30 depending on the employee’s Monthly Salary Credit.
• PhilHealth: 5 percent of monthly basic salary, shared equally between employer and employee, with PHP 10,000 income floor and PHP 100,000 income ceiling. For employed members, the contribution is split equally between employer and employee.
• Pag IBIG: The maximum fund salary used to compute employee and employer savings increased to PHP 10,000 per month under Circular No. 460, which means the common maximum monthly employer share is PHP 200.
• Withholding tax: Employers act as withholding agents and must file the monthly remittance return for income taxes withheld on compensation through BIR Form 1601 C.
• 13th month pay: Private sector rank and file employees who worked for at least one month in the calendar year are entitled to 13th month pay, which must be paid no later than December 24.

What Are Statutory Contributions in the Philippines?

Statutory contributions are government-mandated payments that employers and employees make to specific agencies to fund social protection programs. These include SSS (Social Security System), PhilHealth, Pag-IBIG Fund, and the Withholding Tax for income.

Each of these contributions serves a different purpose, from healthcare and housing to retirement and social welfare.

Key Statutory Contributions in Philippines

Employers in the Philippines should be familiar with several key statutory contributions that form part of their legal responsibilities. Here are the key points:

1. Social Security System (SSS)

The SSS provides employees with benefits related to sickness, maternity, disability, retirement, and death. Employers contribute 10% of the employee’s monthly salary, while employees contribute 5%, based on a salary credit table.

Both employer and employee shares must be remitted monthly to the SSS on or before the deadline based on the employer’s 10-digit SSS number. Failure to pay on time could lead to penalties and surcharges.

2. PhilHealth

PhilHealth provides universal healthcare coverage for employees in the Philippines. The premium rate as of 2025 stands at 5% of the monthly salary, shared equally between the employer and employee, with a salary base cap of PHP 100,000.

This contribution ensures employees can access medical benefits, hospital coverage, and other health services nationwide.

3. Pag-IBIG Fund (HDMF)

The Home Development Mutual Fund (HDMF), commonly known as Pag-IBIG, supports employees in building savings and accessing affordable housing loans.

Employers are required to contribute 2% of the employee’s monthly salary, while employees contribute 1–2%, depending on their income bracket. Payments are due monthly through Pag-IBIG’s online system or accredited partners.

Employees may also withdraw their Pag-IBIG savings after 10 to 20 years, depending on their membership type. For the Pag-IBIG I program, savings can be withdrawn after 20 years of continuous contribution, while members under Pag-IBIG MP2 (Modified Pag-IBIG II) can withdraw their savings after 5 years, with an option to renew. Early withdrawal is permitted in special cases such as retirement, permanent departure from the country, total disability, or death.

4. 13th Month Pay

In the Philippines, the 13th-month pay is a mandatory benefit under Presidential Decree No. 851. All rank-and-file employees who have worked for at least one month within a calendar year are entitled to receive it.

The payment must be equivalent to one-twelfth (1/12) of an employee’s total basic salary earned within the year and should be released on or before December 24.

Employer Cost Example: How Much Should You Budget?

When hiring in the Philippines, employers should budget beyond the employee’s base salary. In addition to monthly pay, the employer is responsible for statutory employer contributions such as SSS, PhilHealth, Pag IBIG, and the cost of 13th month pay.

Here is a simplified example for an employee earning PHP 60,000 per month.

Base monthly salary: PHP 60,000

Estimated employer statutory costs:

SSS employer contribution: PHP 3,500
This is based on the 10 percent employer share applied to the maximum SSS Monthly Salary Credit of PHP 35,000. Employers also pay the Employees’ Compensation Program contribution, which is PHP 30 for employees with an MSC of PHP 15,000 and above.

Employees’ Compensation Program: PHP 30

PhilHealth employer contribution: PHP 1,500
PhilHealth is set at 5 percent of monthly salary, shared equally between employer and employee. For a PHP 60,000 salary, the total monthly premium is PHP 3,000, so the employer share is PHP 1,500.

Pag IBIG employer contribution: PHP 200
Pag IBIG employer contributions are generally 2 percent of the employee’s monthly fund salary, with the Maximum Fund Salary increased to PHP 10,000. This means the common maximum employer share is PHP 200 per month.

13th month pay accrual: PHP 5,000
Employers should also budget for 13th month pay, which must be at least one twelfth of the employee’s total basic salary earned within the calendar year.

Estimated monthly employer statutory cost: PHP 10,230

Estimated total monthly employment cost: PHP 70,230

In this example, the employer should budget around 17 percent on top of base salary for core statutory costs. This estimate does not include private benefits, HMO coverage, allowances, overtime, bonuses, leave encashment, payroll administration, or other company specific costs.

Contribution Payment Schedules and Deadlines

Here’s a quick overview of typical remittance timelines:

Contribution Type	Payment Frequency	Remittance Deadline
SSS	Monthly	Last day of the month following the applicable month
PhilHealth	Monthly	PEN ends 0–4: every 11–15th of the following month PEN ends 5–9: every 16–20th of the following month
Pag-IBIG	Monthly	Based on the first letter of the employer’s business name A to D: 10th to 14th day of the month E to L: 14th to 19 day of the month M to Q: 19th to 24th day of the month R to Z Numeral: 25th day to at the end of the month
13th Month Pay	Annually	On or before December 24 of every year

Make Statutory Contributions in the Philippines Effortless

Managing payroll and compliance across multiple agencies can be complex, especially when hiring at scale. Partnering with a trusted talent solutions provider helps ensure every contribution, deduction, and compliance step is handled accurately.

That’s where Glints TalentHub makes a difference. Our platform helps businesses hire and manage employees in the Philippines with full compliance, from onboarding to payroll and statutory contributions. You’ll have peace of mind knowing your team is supported by local HR and legal experts who stay up to date with the latest regulations.

This article is brought to you by Glints TalentHub. Leading companies are actively building their borderless teams in Southeast Asia, Taiwan, and beyond. However, the prospect of going borderless can be daunting due to complex regulations and cultural ambiguities. With Glints TalentHub, you’ll have a dedicated team of in-market legal, HR, and talent experts by your side at every step of the way.

Glints TalentHub offers an end-to-end, tech-enabled talent solution that encompasses talent acquisition, EOR, and talent development. We empower businesses to leverage the strengths of regional talent efficiently to build high-performing, cost-efficient teams.

Schedule a no-obligation consultation with our experts to receive a tailored proposal today!