Social security
in the Philippines.

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Social security in the Philippines – Overview

Social security in the Philippines plays a pivotal role in providing financial protection to workers and their families against the economic impacts of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden.

Administered by the Social Security System (SSS), this social insurance program is essential for both employees and employers to understand.

Below we explain how social security contributions work in the Philippines.

What does the social security system in the Philippines cover?

The Social Security System (SSS) in the Philippines is a government-mandated social insurance program that provides various benefits and coverage to its members. The SSS is designed to provide financial protection and assistance to employees and their beneficiaries during specific life events or contingencies. The SSS covers the following benefits:

Retirement Benefit: Members who have reached the age of 60 and have paid at least 120 monthly contributions are eligible to receive a monthly pension for life. Alternatively, members who are at least 65 years old, regardless of the number of contributions paid, are also eligible for a monthly pension.
Disability Benefit: Members who become permanently disabled and unable to work due to sickness or injury are entitled to a monthly disability pension. To qualify, the member should have paid at least 36 monthly contributions before the disability occurred.
Death Benefit: In the event of the member’s death, their beneficiaries (spouse, dependent children, or parents) may receive a lump-sum death benefit and a monthly pension, depending on the member’s contributions and the number of eligible beneficiaries.
Sickness Benefit: Members who are unable to work due to illness or injury can avail of daily cash allowances for a maximum of 120 days in a calendar year.
Maternity Benefit: Female members who have paid at least three monthly contributions within the 12-month period before the semester of childbirth are entitled to a daily maternity allowance for a maximum of 105 days for normal delivery or 120 days for caesarean section.
Funeral Benefit: A funeral grant is provided to the beneficiaries or family members of a deceased member to help cover funeral expenses.

What are the mandatory contributions for employees to social security in the Philippines?

Employees are required to contribute 4.5% of their monthly salary to social security, with a maximum monthly salary credit of PHP 20,000. This means that even if an employee’s salary exceeds PHP 20,000, the maximum monthly contribution remains based on PHP 20,000.

What are the mandatory contributions for employers to social security in the Philippines?

Employers are required to contribute 9.5% of the employee’s monthly salary, with a maximum monthly salary credit of PHP 20,000 as well. As stated above, this means that even if an employee’s salary exceeds PHP 20,000, the maximum monthly contribution remains based on PHP 20,000.

These compulsory contributions are sometimes referred to as a payroll tax.

How do mandatory contributions compare to the surrounding countries?

The mandatory contributions for employers in surrounding countries of the Philippines are as follows:

Vietnam: 17% of an employee’s monthly salary
Indonesia: 5.7% to 24.7% of an employee’s monthly salary, depending on the type of employment risk class assigned to the company’s industry.
Singapore: For employees below 55 years old, the employer contributes 17% of the employee’s ordinary wages; for employees aged 55 to 60 years old, the employer contributes 13% of the employee’s ordinary wages; for employees aged 60 to 65 years old, the employer contributes 9% of the employee’s ordinary wages.

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FAQs

How much do employers need to contribute to social security in the Philippines?

Employers need to contribute 9.5% to social security in the Philippines.

What situations does social security cover for employees in the Philippines?

Social security in the Philippines covers things like retirement, disability, death, sickness, maternity leave, and partial funeral payment coverage.

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