Government-Mandated Employee Contributions and Benefits in the Philippines

July 8, 2025

When you hire employees in the Philippines, you are legally required to pay their salary, remit their government-mandated contributions, and provide certain employee benefits. Fulfilling these responsibilities keeps you compliant with labor laws while improving employee satisfaction and retention. We have listed the required contributions and benefits, along with key details you should know here.

List of Government-Mandated Contributions

Employers in the Philippines are legally required to remit monthly contributions to three main government agencies on behalf of their employees. These contributions form the core of every Filipino worker’s social protection.

Social Security System (SSS)

SSS provides financial assistance to employees in cases of sickness, maternity, disability, retirement, and death. As of the latest schedule, the total contribution is shared by the employer and employee, with the employer shouldering the larger portion.

Who contributes? Both the employer and employee
Employer share: 10% (for most salary brackets)
Employee share: 5%
Total contribution: 15% of the monthly salary credit

For more details, you can find the 2025 SSS Contribution Table here.

PhilHealth

PhilHealth covers hospitalization, outpatient care, and other medical-related services. Contributions are computed based on an employee’s basic monthly salary.

Who contributes? Both the employer and employee
Current rate: 5% of the monthly basic salary (split evenly between the employer and employee)
Income ceiling: Salary above ₱100,000 is still capped at ₱5,000 monthly contribution

You can refer to the 2025 PhilHealth Contribution Table here.

Pag-IBIG Fund (HDMF)

The Pag-IBIG Fund provides access to housing loans, savings programs, and calamity loans.

Who contributes? Both the employer and employee
Employee share: 1% (if earning less than ₱1,500) or 2% (if earning ₱1,500 and above)
Employer share: 2% of the employee’s monthly compensation

See the 2025 Pag-IBIG Fund Contribution Table here.

Remember to remit the correct amount and meet the deadlines to avoid penalties. If you need help, Triple I Consulting can streamline the processing of government contributions and other payroll tasks.

Mandatory Employee Benefits

In addition to the social security granted by government-mandated contributions, employers must provide statutory benefits that enhance the quality of life, health, and job satisfaction of Filipino workers. These employee benefits are mandated under the Labor Code and other relevant laws.

13th Month Pay

All rank-and-file employees who have worked at least one month during the calendar year are entitled to a 13th-month pay, equivalent to one-twelfth (1/12) of their total basic salary within the year. This must be paid no later than December 24.

Service Incentive Leave (SIL)

Employees who have rendered at least one year of service are entitled to five days of paid leave annually. This can be used for vacation or sick leave purposes.

Holiday Pay

Employees are entitled to 100% of their daily wage during regular holidays, even if they don’t work. If they work during a holiday, they are entitled to double pay (200%) for that day.

Overtime Pay

Work beyond eight hours a day must be compensated with an additional 25% of the hourly rate or more if performed during rest days or holidays.

Maternity and Paternity Leave

Maternity and paternity leave take effect upon the birth of a child or, in some cases, a miscarriage or emergency pregnancy-related situation.

Maternity leave: 105 days (with optional 15 more days for solo mothers)
Paternity leave: 7 days for married male employees

Other Leave Benefits

In addition to standard leave entitlements, employees in the Philippines may also qualify for special leave benefits under specific circumstances. These include the following:

Solo Parent Leave: Grants seven working days of leave annually to solo parents who have rendered at least one year of service, as provided under the Solo Parents’ Welfare Act.

VAWC Leave: Republic Act No. 9262 allows female employees who are victims of violence to take up to ten days of paid leave, which can be extended when necessary.

Special Leave for Women (RA 9710) entitles women to up to two months of leave with full pay following surgery caused by gynecological disorders.

Additional Voluntary Benefits Employers Can Offer

While not required by law, offering voluntary benefits can help businesses attract and retain talent. Some popular options include:

HMO or private health insurance
Performance-based bonuses
Flexible work arrangements
Mental health support programs
Training and development programs
Free Dental Care

Providing these can improve employee satisfaction and signal a company’s commitment to employee well-being. In many cases, this can be more effective than simply increasing an employee’s salary.

Summary

For businesses operating in the Philippines, understanding and complying with government-mandated contributions and employee benefits is a legal duty and a way of building a motivated workforce.

Here is a quick review of what we explained:

SSS, PhilHealth, and Pag-IBIG contributions are mandatory and shared by employers and employees.
Statutory benefits include 13th-month pay, service incentive leave, holiday and overtime pay, and maternity/paternity leave.
Optional benefits like HMOs and bonuses can enhance employee retention and satisfaction.

Are You Looking for an Easy Way to Process Government-Mandated Contributions? We Can Help

Navigating business regulations can be complex and time-consuming. Employers must implement a reliable payroll system, accurately calculate and deduct contributions, remit payments on time, and maintain updated employee records to ensure compliance. Failure to comply with these strict requirements can result in costly fines or penalties for your business.

That’s where Triple i Consulting comes in. We’re among the best accounting outsourcing companies in the Philippines, offering bookkeeping, payroll, auditing, and tax consultation services. Let our experienced lawyers and accountants provide comprehensive support for your business so you don’t have to stress over the paperwork.

You can find a list of our legal and accounting services here.