In the Philippines, mandatory benefits encompass contributions to Social Security (SSS), PhilHealth, and the Pag-IBIG Fund. Both employees and employers are mandated to contribute to these institutions, ensuring coverage for insurance, loans, and retirement benefits. However, as the new year commences, it is advisable for both employers and employees to proactively plan their budgets for potential adjustments in contributions, ensuring financial stability amidst evolving statutory requirements.
Originally scheduled for implementation in 2021, the hike in Pag-IBIG contributions was deferred due to the pandemic's impact on businesses. 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%. Therefore, a Pag-IBIG Fund member's contribution will double in 2024, increasing from P100 to P200. Employers are obligated to match this increase, adding another P200 to the contribution, as mandated by the Pag-IBIG Board.
With the enactment of Republic Act No. 11223, also known as the Universal Health Care Act, PhilHealth's premium rate for all direct contributors will be increased from 4% to 5% this year. This increment in the premium rate will be divided between employers and employees.
The Social Security Act of 2018 mandated an increase in SSS contribution rates. As per the act, there will be a 1% increase every two years until 2025. Consequently, SSS has already implemented a contribution rate increase in 2023, set at 4.5% of the gross pay (maximum Php 30,000). Employers contribute 9.5% of the gross pay, resulting in a total contribution of 14%.
Staying informed and proactively addressing these changes in mandatory contributions is essential to ensure compliance and comprehensive coverage for the workforce. For further questions or assistance in understanding these updates, feel free to reach out to Lockton Philippines at email@example.com (opens a new window).