Statutory employer obligations under Philippine law: SSS, PhilHealth, Pag-IBIG, 13th month, and separation pay.
A reference to the rates, wage bases, and procedural rules governing employer remittances under Philippine law.
Under Philippine law, employers bear several mandatory contribution and benefit obligations in addition to paying the statutory minimum wage. These include contributions to the Social Security System (SSS), contributions to PhilHealth (the national health insurance fund), contributions to the Home Development Mutual Fund (Pag-IBIG), and the annual 13th month pay mandated by Presidential Decree No. 851. Termination for authorized causes triggers statutory separation pay under the Labor Code. This page identifies the governing statute for each obligation and states the rates and wage bases as of May 2026.
Social Security System (SSS)
The mandatory social security contribution system for private-sector employees in the Philippines is established by the Social Security Act of 2018 (Republic Act No. 11199). Contributions are remitted to the Social Security System (SSS) and fund retirement, disability, death, maternity, and sickness benefits for covered members. Source: sss.gov.ph/sss-contribution-table.[1]
Contribution rate and schedule — effective January 2025
Under Republic Act No. 11199, the SSS contribution rate increased to 15 percent of the Monthly Salary Credit (MSC) effective January 2025 — the final scheduled increase under the Social Security Act of 2018's phased rate schedule. Of the total 15 percent: the employer contributes 10 percent and the employee contributes 5 percent.[1]
The MSC range applicable from January 2025 is ₱5,000 minimum to ₱35,000 maximum. Employers also remit Employees' Compensation (EC) contributions separately at rates prescribed by the Employees' Compensation Commission.
PhilHealth — National Health Insurance
The mandatory health insurance contribution for employed members in the Philippines is governed by the Universal Health Care Act (Republic Act No. 11223), administered by the Philippine Health Insurance Corporation (PhilHealth). Source: philhealth.gov.ph.[2]
§ 10 — Contribution rate and wage base
Under § 10 of Republic Act No. 11223, the premium contribution rate for employed members is 5 percent of monthly basic salary, representing the final rate under the UHC Law's phased schedule. The employer contributes 2.5 percent and the employee contributes 2.5 percent. The monthly salary floor is ₱10,000 and the ceiling is ₱100,000, resulting in a minimum monthly contribution of ₱500 and a maximum of ₱5,000. PhilHealth confirmed that the 5 percent rate applies for 2025 and 2026, with no further increase scheduled.[2]
Pag-IBIG — Home Development Mutual Fund
Mandatory contributions to the Home Development Mutual Fund (Pag-IBIG) are governed by the Home Development Mutual Fund Law of 2009 (Republic Act No. 9679), as implemented by HDMF Circular No. 460 (issued 15 January 2024, effective February 2024). Source: pagibigfund.gov.ph.[3]
§ 7 — Contribution rates and cap
Under § 7 of Republic Act No. 9679, both employer and employee contribute 2 percent of the employee's monthly compensation to the Fund. The Maximum Fund Salary (MFS) used for contribution computation was raised from ₱5,000 to ₱10,000 by HDMF Circular No. 460, effective February 2024. The maximum monthly contribution per party is accordingly ₱200 (2 percent of ₱10,000), for a combined maximum of ₱400 per month.[3]
For members with monthly compensation of ₱1,500 or below, the employee contribution rate is 1 percent and the employer rate is 2 percent, per the contribution schedule under RA 9679.
13th Month Pay
Mandatory 13th month pay for rank-and-file employees is governed by Presidential Decree No. 851 (1975), as modified by Memorandum Order No. 28 (1986). Source: Official Gazette of the Republic of the Philippines.[4]
§ 1 — Mandatory payment obligation
Section 1 of Presidential Decree No. 851, as modified by Memorandum Order No. 28 (1986), requires all employers to pay all their rank-and-file employees a 13th month pay not later than December 24 of every year. The 13th month pay is equivalent to one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year.[4]
§ 2 of the Decree, as interpreted by DOLE Implementing Rules and confirmed by Supreme Court jurisprudence. Only basic salary earned during the calendar year is included in the computation; overtime pay, allowances, profit-sharing payments, and other monetary benefits are excluded.Separation Pay
Under the Labor Code of the Philippines (Presidential Decree No. 442, as amended), separation pay is due to an employee terminated for authorized causes under Articles 298-299 of the Code.
Art. 298 [283] — Authorized causes and separation pay schedule
Under Article 298 [formerly Article 283] of the Labor Code of the Philippines, in cases of termination for authorized causes (installation of labor-saving devices, redundancy, retrenchment to prevent losses, or closure of business not due to serious business losses), the affected employee is entitled to separation pay as follows:
- Installation of labor-saving devices or redundancy: one month pay, or one month pay per year of service, whichever is higher;
- Retrenchment to prevent losses, or closure not due to serious losses: one-half month pay per year of service, or one month pay, whichever is higher.
No separation pay is required where the closure or cessation of operations is due to serious business losses or financial reverses.
A fraction of at least six months of a year of service is considered as one whole year for computation purposes.
Summary table — statutory employer obligations under Philippine law
| Obligation | Governing Statute | § / Art. | Employer Rate | Wage Base / Cap (PHP) | Notes |
|---|---|---|---|---|---|
| SSS | Social Security Act of 2018 | RA 11199, § 18 | 10% of MSC | MSC: ₱5,000 min / ₱35,000 max | Employee: 5%. Total: 15%. Effective January 2025 (final rate under RA 11199). Employer also pays EC contribution separately. |
| PhilHealth | Universal Health Care Act | RA 11223, § 10 | 2.5% of monthly basic salary | Salary floor ₱10,000; ceiling ₱100,000. Max contribution: ₱5,000/month total. | Employee: 2.5%. Total: 5%. Final rate under UHC Law. No increase for 2026. |
| Pag-IBIG / HDMF | Home Development Mutual Fund Law of 2009 | RA 9679, § 7 | 2% of monthly compensation | Max Fund Salary: ₱10,000/month. Max contribution per party: ₱200/month. | Employee: 2%. MFS raised from ₱5,000 to ₱10,000 by HDMF Circular No. 460, eff. Feb 2024. |
| 13th Month Pay | Presidential Decree No. 851 (as modified by Memo Order 28, 1986) | PD 851, § 1 | 1/12 of annual basic salary | All rank-and-file employees | Due by December 24. Managerial employees excluded under § 2. Only basic salary included — not OT or allowances. |
| Separation Pay (Authorized Causes) | Labor Code of the Philippines | Art. 298 [283] | 1 month/year (redundancy / labor-saving devices); 0.5 month/year (retrenchment / closure) | All regular employees terminated for authorized causes | Not required for closure due to serious financial losses. Fraction of ≥ 6 months counts as full year. |
- Social Security Act of 2018, Republic Act No. 11199 (Philippines). SSS Contribution Table. https://www.sss.gov.ph/sss-contribution-table/. SSS Circular 2024-06 mandating 15% rate from January 2025. Accessed May 2026.
- Universal Health Care Act, Republic Act No. 11223,
§ 10(Philippines). PhilHealth Advisory PA2025-0002. https://www.philhealth.gov.ph. Philippine Information Agency confirmation of 5% rate for 2026: pia.gov.ph. Accessed May 2026. - Home Development Mutual Fund Law of 2009, Republic Act No. 9679,
§ 7(Philippines). HDMF Circular No. 460 (15 January 2024), effective February 2024. Pag-IBIG Fund. https://www.pagibigfund.gov.ph. Accessed May 2026. - Presidential Decree No. 851,
§ 1(Philippines), as modified by Memorandum Order No. 28 (1986). Official Gazette of the Republic of the Philippines. https://www.officialgazette.gov.ph. Supreme Court E-Library. elibrary.judiciary.gov.ph. Accessed May 2026. - Labor Code of the Philippines, Art. 298 [283] (Presidential Decree No. 442, as amended). Library of Labor Law Philippines. https://library.laborlaw.ph. Accessed May 2026.
For information on how citations are verified and what sources are used, see the Methodology page.