Employment & Compliance

SSS, PhilHealth, and Pag-IBIG: an employer's guide to statutory benefits

2 July 2026 · 6 min read

In short

Every Philippine employer must contribute to three government funds on top of salary: SSS (social security), PhilHealth (health insurance), and Pag-IBIG (housing fund), plus withhold income tax and pay 13th-month pay. Together these add roughly 11 to 16 percent to the base salary and are legally mandatory.

Hiring in the Philippines means more than paying a salary. There are statutory contributions every employer must make, and getting them wrong creates legal and financial risk. Here is what each one is and what it costs.

What is SSS?

The Social Security System (SSS) is the Philippines' social insurance program, covering retirement, disability, sickness, and maternity benefits. The current contribution rates are published in the official SSS contribution table. Both employer and employee contribute, with the employer paying the larger share, calculated on the employee's monthly salary credit.

What is PhilHealth?

PhilHealth is the national health insurance program. Contributions are a percentage of basic salary, shared between employer and employee, up to a cap, with current rates published by PhilHealth. It provides baseline health coverage, which most employers supplement with private health cover for professional roles.

What is Pag-IBIG?

The Home Development Mutual Fund, known as Pag-IBIG, is a savings and housing loan program. Contributions are modest, a small percentage of salary, again shared between employer and employee.

What about tax and 13th-month pay?

Employers withhold income tax from salaries and remit it to the Bureau of Internal Revenue. Separately, 13th-month pay, equal to one twelfth of annual basic salary, is legally mandatory under Presidential Decree No. 851 and must be paid by 24 December each year. Budget for it monthly rather than as a year-end surprise.

What does it all add up to?

Together, statutory employer costs add roughly 11 to 16 percent on top of the base salary. The rate is highest at junior level and falls to about 11 percent at senior level, because every one of these contributions is capped. When you compare the cost of a Philippine hire to a Western one, use the fully loaded figure, not the headline salary. An employer of record handles all of these contributions for you.