Running a business in the Philippines means remitting government-mandated contributions and providing employee benefits. Doing so ensures compliance, increases employee satisfaction, and shows stakeholders that you’re a legitimate and responsible establishment. Below, we’ve listed the required contributions, benefits, and other important details.
Government-Mandated Contributions
Philippine businesses must contribute to government agencies to provide employees with social security, healthcare, and housing benefits. Below are the primary contributions:
- Social Security System (SSS)
- Provides retirement pensions, disability coverage, maternity leave, and sickness benefits.
- Employers register employees and remit monthly contributions based on salary.
- Payments must be remitted monthly to avoid penalties. Contributions for MSCs above ₱20,000 are allocated to the Mandatory Provident Fund (MPF) for enhanced retirement benefits.
- The 2025 SSS Contribution Table is available here.
- PhilHealth
- Offers health insurance for hospitalization and medical expenses.
- Premiums are shared equally between the employer and employee.
- Current Rates (2025 Contribution Table is here):
| Salary Cap (PHP) | Premium Rate | Employer Share | Employee Share |
| 100,000 | 5% | 2.5% | 2.5% |
- Pag-IBIG Fund
- Supports housing loans, provident savings, and short-term loans.
- Both the employer and employee contribute based on salary.
- Contributions aid employees in homeownership and emergencies.
- Current Rates (2025 Contribution Table available here):
| Salary Base (PHP) | Contribution Rate | Employer Contribution (PHP) | Employee Contribution (PHP) |
| Up to 5,000 | 2% | 100 (max) | 100 (max) |
Ensure timely payment of the correct amount to avoid penalties. Our team can assist with managing government contributions and other payroll tasks efficiently.
Employee Benefits
Philippine labor laws require employers to provide certain benefits to support employee welfare and ensure compliance with the Labor Code. While not mandatory, others are commonly offered to boost employee satisfaction and retention.
Mandatory Benefits
These benefits are required by law and must be granted to eligible employees:
- 13th-Month Pay
- Mandatory for all rank-and-file employees.
- Equivalent to one-twelfth (1/12) of the total basic salary earned within the calendar year.
- Must be paid on or before December 24.
- Service Incentive Leave (SIL)
- Five days of paid leave annually. Can be used for vacation or sick leaves.
- Granted to employees who have rendered at least one year of service.
- Not applicable to those already enjoying paid vacation leaves of at least five days.
- Maternity Leave
- 105 days of paid leave for female employees;
- An additional 15 days for solo mothers;
- Covers live births, miscarriages, or emergency pregnancy terminations.
- Paternity Leave
- Seven days of paid leave for married male employees.
- Granted for the first four deliveries (including miscarriage) of the spouse.
- Solo Parent Leave (RA No. 8972)
- Seven working days of leave annually.
- Granted to qualified solo parents with at least one year of service.
- Special Leave for Women
- Up to two months of paid leave under the Magna Carta of Women (RA 9710).
- Granted after surgery due to gynecological disorders.
Non-mandatory but Common Benefits
While not required by law, these benefits are widely practiced by employers to improve morale and retention:
- Health and Wellness
- Dental and Vision Insurance: Covers routine care like eye exams or dental cleanings, often optional.
- Wellness Programs: Gym memberships, fitness stipends, or on-site wellness challenges.
- HSAs/FSAs: Accounts for medical expenses with tax benefits.
- Financial Benefits
- Retirement Contributions: 401(k) matching, profit-sharing, or extra pension contributions.
- Bonuses: Performance-based, signing, or profit-sharing bonuses.
- Stock Options/Equity: Ownership stakes, common in tech and startups.
- Work-Life Balance
- Flexible Work: Remote, hybrid, or flexible hours for better balance.
- Paid Time Off (PTO): Generous vacation policies, sometimes unlimited.
- Parental Leave: Extended or fully paid maternity, paternity, or adoption leave.
- Career Development
- Professional Development: Funding for courses, certifications, or conferences.
- Tuition Reimbursement: Coverage for further education.
- Mentorship Programs: Guidance from senior staff for growth.
- Perks and Lifestyle
- Company Discounts: Discounts on products or vendor partnerships.
- Free Meals/Snacks: On-site cafeterias or meal stipends.
- Commuter Benefits: Subsidies for transport or parking.
- Recognition and Rewards
- Recognition Programs: Awards or bonuses for milestones or performance.
- Gift Programs: Holiday, birthday, or anniversary perks.
Final Thoughts
Remitting government-mandated contributions and providing employee benefits is not just a legal requirement. By understanding and implementing SSS, PhilHealth, Pag-IBIG, and benefits like 13th-month pay, employers help ensure financial security, healthcare, and housing support for their workforce. This leads to improved employee satisfaction and retention. Consider offering additional benefits, even if not legally required, to further motivate your employees.
Computing and remitting government-mandated contributions can be difficult and time-consuming. We can help you streamline the process so you can stay compliant while focusing on growing your business.
Are You Keeping Up with Government-Mandated Contributions? With Our Help, You Don’t Have to Worry
Business Registration Philippines offers expert accounting and legal support to ensure you stay compliant with government-mandated contributions like SSS, PhilHealth, and Pag-IBIG. Outsourcing payroll, bookkeeping, and compliance tasks to our team is often more cost-effective than expanding your in-house staff. Contact us today to schedule a consultation with one of our experts.
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