The Pag-IBIG Fund is a government program that provides financial security for Filipino workers. Established to promote savings and provide affordable housing loans, Pag-IBIG contributions are mandatory for employers and employees. Businesses are responsible for remitting contributions and should be aware of the new 2024 updates (which are still in effect as of 2025).
To keep you updated, we’ll explain the new rate, the 2025 Pag-IBIG contribution table, and how to compute and pay your contributions.
What Are Pag-IBIG Contributions?
Pag-IBIG contributions are monthly savings deducted from a member’s income, matched by employers for employed members, and remitted to the Pag-IBIG Fund. These contributions serve as a savings program, earning dividends over time, and make members eligible for benefits like housing loans, multi-purpose loans, and calamity loans. The acronym Pag-IBIG stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya at Gobyerno, reflecting its collaborative approach to financial empowerment. Membership is mandatory for employees covered by the Social Security System (SSS) and voluntary for self-employed individuals, OFWs, and others, ensuring access to long-term financial tools.
New Pag-IBIG Contribution Rates for 2025
Pag-IBIG implemented significant updates to its contribution structure, effective February 2024, and still in effect in 2025. The Maximum Fund Salary (MFS) used to compute contributions increased from ₱5,000 to ₱10,000, doubling the maximum contribution from ₱100 to ₱200 per member and employer. Regular savings dividend rate also rose from 6.05% in 2023 to 6.60% in 2024; MP2 returns also ticked up from 7.05% to 7.10%.
These changes aim to enhance members’ savings, increase loan eligibility, and sustain the fund’s housing programs.
Pag-IBIG Contribution Table for 2025
Below is the simplified Pag-IBIG contribution table for 2025, based on the updated MFS and rates:
| Monthly Salary | Employee Rate | Employer Rate | Total |
|---|---|---|---|
| ₱1,500 and below | 1% | 2% | 3% |
| Over ₱1,500 – ₱10,000 (MFS cap) | 2% | 2% | 4% |
Note: For MFS above ₱10,000, contributions are capped at ₱200 each for employee and employer.
How to Compute Pag-IBIG Contributions
Computing how much is your Pag-IBIG contribution can be straightforward using the formula: Monthly Fund Salary × Contribution Rate.
Here are examples:
Example 1: Employee earning ₱12,000 monthly
- MFS is capped at ₱10,000.
- Employee share: ₱10,000 × 2% = ₱200
- Employer share: ₱10,000 × 2% = ₱200
- Total contribution: ₱400
Example 2: Employee earning ₱6,500 monthly
- MFS is below the ₱10,000 cap, so the full amount is used.
- Employee share: ₱6,500 × 2% = ₱130
- Employer share: ₱6,500 × 2% = ₱130
- Total contribution: ₱260
Registering and computing each employee for Pag-IBIG contributions can get complicated for larger businesses. Our expertise and advanced payroll software make handling government-mandated contributions much easier. If you need assistance, reach out to us for reliable payroll solutions and other accounting services.
How to Pay Pag-IBIG Contributions
Pag-IBIG offers multiple payment channels for convenience. Employers’ deadlines are typically on the 10th day of the following month. Employers file combined returns for employee and employer shares.
Here’s how to pay:
- Register as an Employer: Register at a Pag-IBIG branch to obtain an Employer ID if not yet registered.
- Enroll Employees: Ensure all employees are registered with Pag-IBIG and have Membership IDs. Submit employee details via the Pag-IBIG online portal or at a branch.
- Generate Payment Reference Number (PRN): Log in to the Pag-IBIG Employer Online Services portal. Go to the “Contributions” section, enter the contribution period and employee details, and generate a PRN for the total contributions.
- Select Payment Channel: Choose an accredited payment facility, such as Pag-IBIG branches, partner banks (e.g., BDO, Metrobank), e-wallets (e.g., GCash, Maya), or payment centers (e.g., Bayad Center).
- Remit Payment: Use the PRN to pay the total contribution amount at the chosen channel via cash, bank transfer, or digital payment. Ensure timely payment to avoid penalties.
- Verify Payment: Keep the transaction receipt. Check the payment status on the Pag-IBIG Employer portal to confirm contributions are credited to employee accounts.
- Maintain Records: In compliance with government regulations, keep the official receipt (OR) and employee payslips.
While online remittance is convenient, it does potentially make businesses more prone to errors. Ensure your contributions are accurate and remitted before the deadline.
Registering employees, handling paperwork, and meeting deadlines can be overwhelming for businesses with many employees. Our expertise and state-of-the-art payroll software simplify the remittance of government-mandated contributions, making it quick and stress-free. Contact us for professional payroll services and full accounting support.
Final Thoughts
The 2025 Pag-IBIG contribution updates are meant to show the fund’s commitment to improving members’ savings and loan benefits. By understanding the new update, using the contribution table, and leveraging convenient payment methods, you can stay compliant and ensure your employees have better access to benefits like affordable housing and emergency loans.
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 comply 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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