The Salary Is Not the Full Cost: How to Compute SSS, PhilHealth, and Pag-IBIG Contributions in 2026

Let me begin with the number many business owners do not see.

When you hire an employee at a salary of ₱20,000 a month, that employee does not cost the business only ₱20,000. The salary is the first number. It is not the last.

On top of it are the employer's shares in SSS, PhilHealth, and Pag-IBIG. There may also be Employees' Compensation, 13th-month pay, paid leave, and other benefits. Taken together, these affect how much cash you need for payroll, how you price your products or services, and how many people the business can realistically afford to hire.

This is why government contributions should not be treated merely as deductions appearing on a payslip. They are part of the cost of employing people.

They are also part of your responsibility to them.

When you deduct an employee's contribution, that amount does not belong to the business. You are holding it temporarily so that it can be remitted, together with the employer's share, to the proper agency. Getting the computation right protects the employee's records, benefits, and savings. Getting the remittance right protects the business from penalties, reconciliation problems, and the loss of trust that follows when employees discover that their contributions were not properly recorded.

Fortunately, the arithmetic is not as difficult as the tables sometimes make it appear.

The pattern is the same, but the base is not

SSS, PhilHealth, and Pag-IBIG all begin with the same questions:

• What amount should the contribution be based on?
• What rate applies?
• How much belongs to the employee?
• How much belongs to the employer?
• Is there a minimum or maximum amount?

Once you understand those five questions, the tables become easier to read.

But there is one important warning: do not use one salary figure blindly for all three contributions.

SSS uses a Monthly Salary Credit, or MSC, based on a compensation bracket. PhilHealth uses the employee's monthly basic salary. Pag-IBIG uses what its rules call the employee's Fund Salary, subject to its own contribution ceiling.

The pattern is similar. The base is not always the same.

At a glance

• SSS: the base is the Monthly Salary Credit (MSC) from your compensation bracket. Employee share 5 percent, employer share 10 percent plus Employees' Compensation (EC). The MSC runs from ₱5,000 to ₱35,000.
• PhilHealth: the base is the monthly basic salary. Employee share 2.5 percent, employer share 2.5 percent. A ₱10,000 floor and a ₱100,000 ceiling.
• Pag-IBIG: the base is the Fund Salary. Employee share generally 2 percent, employer share 2 percent. Maximum Fund Salary of ₱10,000.

These are the latest official schedules I could verify as of July 30, 2026. The current SSS schedule took effect in January 2025, the latest PhilHealth schedule retains the 5 percent rate with its ₱10,000 floor and ₱100,000 ceiling, and the current Pag-IBIG Maximum Fund Salary of ₱10,000 has applied since February 2024.

SSS: Start with the salary bracket

The current SSS contribution rate is 15 percent of the employee's Monthly Salary Credit.

The employee shoulders 5 percent. The employer shoulders 10 percent. The employer also pays a separate Employees' Compensation contribution of either ₱10 or ₱30, depending on the employee's MSC.

The important term here is Monthly Salary Credit.

SSS does not simply multiply every employee's exact salary by 15 percent. Instead, it places the employee's compensation within a range and assigns the corresponding MSC.

Under the current schedule:

• The minimum MSC is ₱5,000.
• The maximum MSC is ₱35,000.
• The employee's share is 5 percent.
• The employer's share is 10 percent.
• The employer pays an additional EC contribution of ₱10 for an MSC of ₱14,500 and below, or ₱30 for an MSC of ₱15,000 and above.

Example: Employee earning ₱20,000

An employee earning ₱20,000 falls within the SSS compensation range corresponding to an MSC of ₱20,000.

The computation is:

• Employee share: 5 percent × ₱20,000 = ₱1,000
• Employer share: 10 percent × ₱20,000 = ₱2,000
• Employer-only EC contribution: ₱30

The total SSS amount remitted is therefore ₱3,030: ₱1,000 deducted from the employee and ₱2,030 paid by the employer.

At higher salary levels, the part of the MSC above ₱20,000 is credited to the employee's individual account under the SSS Mandatory Provident Fund program, now called the MySSS Pension Booster. The payroll computation still follows the official contribution table; the allocation happens within the SSS system.

PhilHealth: Use monthly basic salary

PhilHealth follows a more direct computation.

The current premium is 5 percent of the employee's monthly basic salary, shared equally between the employee and the employer:

• Employee share: 2.5 percent
• Employer share: 2.5 percent

The income floor is ₱10,000. This means that employees earning ₱10,000 or less are subject to the minimum monthly premium of ₱500.

The income ceiling is ₱100,000. This means that employees earning ₱100,000 or more are subject to the maximum monthly premium of ₱5,000.

One detail matters here: PhilHealth uses monthly basic salary, not necessarily everything appearing in gross pay.

Its published guidance says that the base does not include items such as sales commissions, overtime pay, allowances, 13th-month pay, bonuses, and other gratuity payments. That distinction becomes important when an employee receives several kinds of compensation in one payroll period.

Example: Employee with a ₱20,000 monthly basic salary

The total PhilHealth contribution is 5 percent × ₱20,000 = ₱1,000.

Shared equally:

• Employee share: ₱500
• Employer share: ₱500

The employer deducts the employee's ₱500 share and adds another ₱500 from the business.

Pag-IBIG: The contribution reaches its maximum early

Pag-IBIG is usually the smallest of the three amounts, but it is still important to compute correctly.

For employees earning more than ₱1,500, the standard contribution rates are:

• Employee share: 2 percent
• Employer share: 2 percent

For employees earning ₱1,500 or below, the employee rate is 1 percent, while the employer rate remains 2 percent.

The Maximum Fund Salary is ₱10,000. This means that once an employee's Fund Salary reaches ₱10,000, the mandatory contribution no longer increases under the standard rate.

The ₱10,000 Maximum Fund Salary has applied since February 2024 under Pag-IBIG Fund Circular No. 460.

Example: Employee earning ₱20,000

Because the employee earns more than the ₱10,000 Maximum Fund Salary, Pag-IBIG uses ₱10,000 as the contribution base.

The computation is:

• Employee share: 2 percent × ₱10,000 = ₱200
• Employer share: 2 percent × ₱10,000 = ₱200

The total Pag-IBIG savings credited for the month is ₱400.

This is why most employees earning at least ₱10,000 will have the same standard mandatory Pag-IBIG deduction of ₱200, unless a higher voluntary savings arrangement applies.

Put the three together

Now let us return to the employee earning ₱20,000 a month. Assume that ₱20,000 is also the appropriate base for the example under the applicable agency rules.

• SSS: employee ₱1,000, employer ₱2,030
• PhilHealth: employee ₱500, employer ₱500
• Pag-IBIG: employee ₱200, employer ₱200
• Total: employee ₱1,700, employer ₱2,730

The employee's pay after these three government deductions is ₱20,000 less ₱1,700, or ₱18,300. That is before withholding tax and any other authorized deductions.

The employer's immediate monthly payroll cost is ₱20,000 in salary plus ₱2,730 in employer contributions, or ₱22,730. That is before 13th-month pay, paid leave, company benefits, training, equipment, recruitment costs, and the other expenses involved in employing someone.

This is the number a business owner needs to understand.

An employee with a salary of ₱20,000 does not require only ₱20,000 in monthly cash. The statutory employer contributions alone add ₱2,730 to the month's payroll requirement.

If your pricing assumes that labor costs only the amount written in the employment contract, the business may be losing margin without realizing it.

The contribution table is not usually where mistakes begin

For one employee, the arithmetic is manageable.

The difficulty begins when you have several employees, different salary levels, new hires, resignations, unpaid absences, allowances, commissions, salary adjustments, and multiple payroll cutoffs.

The problem is not simply multiplying a rate.

The real work is making sure that:

• the correct contribution base is used for each agency;
• the employee and employer shares are separated properly;
• the deduction agrees with the payslip;
• the employer's share is recorded as an expense;
• the total amount is recognized as a liability until remitted;
• the remittance agrees with the agency report; and
• the payment is made on time and can later be reconciled.

One wrong salary base repeated across twenty employees is no longer a small error. One missed remittance repeated across several months becomes a much larger problem.

And because these amounts belong to employee benefits and savings, the issue is not merely technical. It affects people.

Payroll and accounting should not live in separate worlds

Every payroll contribution creates more than one accounting effect.

There is the employee deduction. There is the employer expense. There is the amount payable to the government agency. Then there is the eventual cash payment when the contribution is remitted.

When payroll is prepared in one spreadsheet and accounting is maintained somewhere else, someone must copy all those figures from one place to another.

That is where mismatches begin.

The payroll report says one number. The general ledger says another. The remittance file contains a third. At year-end, the accountant must determine which one is correct.

A connected system should not require the same amount to be entered repeatedly.

The contribution computed through payroll should already become:

• the correct deduction from the employee;
• the correct employer expense;
• the correct government contribution payable; and
• the correct cash requirement for remittance.

That is the direction behind Quenta Payroll. The goal is not simply to produce a payslip. It is to connect payroll with the rest of the business, so that the deduction, the expense, the liability, and the cash impact tell one consistent story.

Professional judgment still belongs with the business and its accountant. But the system should remove the unnecessary repetition that makes mistakes more likely.

Learn more about Quenta Payroll and how it prepares SSS, PhilHealth and Pag-IBIG contributions as part of each payroll run.

The number to remember

SSS, PhilHealth, and Pag-IBIG are not three mysterious tables.

For each one, you need to know the contribution base, the rate, the employee's share, the employer's share, and the applicable floor or ceiling.

The computation can be learned.

The harder part is doing it correctly for every employee, every cutoff, and every month, and making sure that what was deducted, recorded, reported, paid, and remitted all agree.

The salary is not the full cost. The deduction is not the whole story. And the contribution is not complete until it has been computed correctly, recorded properly, and remitted on time. That is what a good payroll system should help a business do.

The rates and thresholds in this article are based on the latest official schedules verified as of July 30, 2026. Government agencies may issue new circulars, advisories, or contribution tables. Before processing payroll, confirm the current schedules directly with SSS, PhilHealth, and Pag-IBIG, particularly when dealing with unusual compensation arrangements, retroactive adjustments, or special employee classifications.