Sunday, February 15, 2015

Coverage and Computation of Pag-IBIG Monthly Contributions

All employees who are or obligated to be covered by the Social Security System (SSS), if that actual membership in the SSS shall not be a condition prior to the mandatory coverage in the Fund. It shall include, but are not limited to:

1. A private employee, whether permanent, temporary, or provisional who is not over sixty (60) years old;

2. A household helper earning at least P1,000.00 a month. A household helper is any person who renders domestic services exclusively to a household such as a driver, gardener,  cook, governess, and other similar occupations;

3. A Filipino seafarer upon the signing of the standard contract of employment between the seafarer and the manning agency, which together with the foreign ship owner, acts as the employer;

4. A self-employed person regardless of trade, business or occupation, with an income of at least P1,000.00 a month and not over sixty (60) years old;

5. An expatriate who is not more than sixty (60) years old and is compulsorily covered by the Social Security System (SSS), regardless of citizenship, nature and duration of employment, and the manner by which the compensation is paid. In the absence of an explicit exemption from SSS coverage, the said expatriate, upon assumption of office, shall be covered by the Fund. 

An expatriate shall refer to a citizen of another country who is living and working in the Philippines.

6. All employees who are subject to mandatory coverage by the Government Service Insurance System (GSIS), regardless of their status of appointment, including members of the judiciary and constitutional commissions;

7. Uniformed members of the Armed Forces of the Philippines, the Bureau of Fire Protection, the Bureau of Jail Management and Penology, and the Philippine National Police;
Filipinos employed by foreign-based employers, whether they are deployed here or abroad or a combination thereof.

Based on IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 9679 OR THE “HOME DEVELOPMENT MUTUAL FUND LAW OF 2009”, OTHEWISE KNOWN AS Pag-IBIG (Pagtutulungan sa kinabukasan: Ikaw, Bangko, Industriya at Gobyerno) Fund” of RULE VI CONTRIBUTIONS stated the following:

Section 1. Rate of Contributions. Covered employees and employers shall contribute to the Fund based on the monthly compensation of covered employees as follows:

Employees earning not more than One thousand five hundred pesos (P1,500.00) per month – one percent (1%).

Employees earning more than One thousand five hundred pesos (P1,500.00) per month – two percent (2%).

All employers – two percent (2%) of the monthly compensation of all covered employees.

The maximum monthly compensation to be used in computing employee and employer contributions shall not be more than Five thousand pesos (P5,000.00); Provided, that this maximum and the contribution rates may be fixed from time to time by the Board through rules and regulations adopted by it, taking into consideration actuarial calculations and rates of benefits. Provided further, that the foregoing rates shall likewise be the same for the self-employed and voluntary members.

A member may, however, be allowed to contribute more than what is required herein should he or she so desires. The employer, however, shall only be mandated to contribute what is required under there Rules unless the employer agrees to match the member’s increased contribution.

Notwithstanding any contract to the contrary, an employer shall not deduct, directly or indirectly, from the compensation of its employees covered by the Fund, or otherwise recover from them, the employer’s contribution with respect to such employees.


Assuming that an Employee is receiving a Monthly Basic Salary or Earnings (Net of Absences, Late, Overtime) amounting to Php.18,000.00, the Employer-Employee Pag-IBIG Total Monthly Contributions is with details as follows:

Employer (ER) Contribution (Contribution of the Employer): 100.00
Employee (EE) Contribution (Deduction to Employee Payroll): 100.00

NOTE: The maximum monthly compensation to be used in computing employee and employer contributions shall not be more than Five thousand pesos (P5,000.00). 
P5,000.00 x 2% = P100.00

Please refer for updates and other concerns related to this.

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