If you have ever looked closely at your payslip, you have probably noticed that your gross salary is noticeably larger than the amount that actually lands in your bank account. The difference is not a mistake or a single hidden fee — it is a set of mandatory deductions required by Philippine law. Three of them, SSS, PhilHealth, and Pag-IBIG, are taken out every month on top of your withholding income tax. This guide explains what each contribution is, exactly how much comes out of your pay, how much your employer adds on top, and why understanding these numbers matters for your take-home pay.
The three mandatory contributions at a glance
Every private-sector employee in the Philippines who is covered by these programs has three contributions deducted from their salary each month:
- SSS (Social Security System) — a social insurance program covering retirement, sickness, maternity, disability, death, and funeral benefits.
- PhilHealth (Philippine Health Insurance Corporation) — the national health insurance program that helps pay for hospital and medical care.
- Pag-IBIG Fund (Home Development Mutual Fund, or HDMF) — a savings and housing program that also provides short-term loans and annual dividends.
Your employer is legally required to register you with all three agencies, withhold the correct employee share from your pay, and remit it together with their own employer share. You do not need to pay any of these yourself unless you are self-employed, a voluntary member, or working informally. For a regular employee, it all happens automatically through payroll.
Key point for your taxes: All three contributions are subtracted from your gross salary before your withholding income tax is calculated. This means they directly reduce your taxable income, which in turn lowers the income tax you pay. We explain this in more detail in our income tax guide.
SSS: how much comes out of your pay
The Social Security System is the largest of the three contributions for most employees. The total SSS contribution is set as a percentage of your Monthly Salary Credit (MSC), which is a capped value the agency assigns to your actual salary rather than your raw pay. For 2026, the MSC ranges from a minimum of ₱5,000 to a maximum of ₱35,000, following the schedule set in SSS Circular 2024-006 that became effective in 2025.
The total SSS contribution rate is shared between you and your employer. The employee share is 5% of the MSC, while the employer pays a larger share (plus additional amounts for the Employees' Compensation and WISP funds). For the purpose of reading your payslip, the number you care about is the 5% employee share.
Because the MSC is capped, the employee deduction only grows up to a point and then stays flat. Here is how the employee share works across the MSC range:
| Monthly Salary Credit (MSC) | Employee Share (5%) | Notes |
|---|---|---|
| ₱5,000 (minimum) | ₱250 / month | Lowest possible employee deduction |
| ₱20,000 | ₱1,000 / month | Example midpoint |
| ₱35,000 (maximum) | ₱1,750 / month | Highest employee deduction; stays flat above this |
If your monthly salary is below ₱5,000, your MSC is still treated as ₱5,000, so you pay the ₱250 minimum. If you earn more than ₱35,000, your MSC is capped at ₱35,000 and your employee share stays at ₱1,750 — it does not keep rising with your salary. The official schedules and circulars are available on the SSS website.
In return for these contributions, SSS members build eligibility for retirement pensions, sickness and maternity benefits, disability and death pensions, and funeral benefits. The amount you can eventually claim depends on how much and how long you have contributed, which is one reason keeping track of your monthly SSS deductions is worthwhile.
PhilHealth: the national health insurance premium
PhilHealth is the government's national health insurance program. Under the Universal Health Care Act, the premium rate was increased gradually each year until it reached 5% of monthly basic salary in 2025, which is the rate that applies for 2026. Unlike SSS, PhilHealth uses your actual monthly basic salary directly (rather than a separate salary credit table), but it still applies a cap.
The 5% premium is split equally between you and your employer: the employee pays 2.5% and the employer pays 2.5%. The salary used to compute the premium is capped at ₱100,000 per month, so once your basic salary reaches that level your premium stops increasing.
| Monthly Basic Salary | Employee Share (2.5%) | Employer Share (2.5%) |
|---|---|---|
| ₱10,000 | ₱250 / month | ₱250 / month |
| ₱30,000 | ₱750 / month | ₱750 / month |
| ₱100,000 or more (capped) | ₱2,500 / month | ₱2,500 / month |
So the most an employee will ever pay into PhilHealth in a single month is ₱2,500, reached once basic salary hits ₱100,000. Current rates and the official premium computation are published by PhilHealth.
PhilHealth coverage helps reduce your out-of-pocket cost when you or your qualified dependents are confined in a hospital or need certain outpatient treatments. Because every employed member contributes, the fund can spread the cost of medical care across the whole working population.
Pag-IBIG Fund: your housing and savings contribution
The Pag-IBIG Fund, formally the Home Development Mutual Fund (HDMF), is the smallest of the three mandatory contributions for most workers. The employee contribution rate is 2% of monthly compensation. Since February 2024, the maximum monthly compensation credit used to compute Pag-IBIG was raised to ₱10,000, which means 2% of ₱10,000 equals a maximum employee contribution of ₱200 per month.
In practical terms, almost every employee earning above roughly ₱10,000 a month simply pays the ₱200 maximum. Those earning less than ₱10,000 pay 2% of their actual monthly compensation. The employer also contributes to Pag-IBIG on top of your employee share.
Quick math: 2% × ₱10,000 maximum credit = ₱200. That ₱200 cap is why Pag-IBIG is usually the easiest of the three to estimate — for most office workers it is simply ₱200 every month. Details are published by the Pag-IBIG Fund.
Your Pag-IBIG savings do not disappear. The fund pools member contributions to finance housing loans at below-market rates, and it pays out annual dividends on your accumulated savings. After a qualifying number of years of membership, you become eligible to claim your total Pag-IBIG savings, which can be a meaningful lump sum at retirement.
A worked example: ₱30,000 per month
To see how the three contributions combine, let us walk through a concrete salary. Suppose you earn a basic salary of ₱30,000 per month. Here is exactly what would be deducted:
| Contribution | How it is computed | Employee Deduction |
|---|---|---|
| SSS | 5% of ₱30,000 MSC | ₱1,500 |
| PhilHealth | 2.5% of ₱30,000 salary | ₱750 |
| Pag-IBIG | 2% of ₱30,000 = ₱600, capped at ₱200 | ₱200 |
| Total employee contributions (monthly) | ₱2,450 | |
| Total employee contributions (annual) | ₱29,400 | |
Notice how Pag-IBIG is the only one that hits its cap at ₱30,000. Without the cap, 2% of ₱30,000 would be ₱600, but the ₱10,000 compensation ceiling brings it down to ₱200. SSS and PhilHealth, by contrast, are still well within their respective caps (₱35,000 and ₱100,000) at this salary level, so they are computed straight from the percentages.
After these three contributions, your income tax is then calculated on the remaining ₱27,550 — not on the original ₱30,000. That is the tax-reducing effect described earlier, and it is why these deductions and your withholding tax are best understood together. You can see the full breakdown for several salary levels on our examples page.
Side-by-side comparison of the three contributions
The table below summarises all three programs so you can compare them at a glance. All figures reflect the rates in effect for 2026.
| Program | Employee Rate | Basis / Cap | Max Employee / Month |
|---|---|---|---|
| SSS | 5% of MSC | MSC ₱5,000 – ₱35,000 | ₱1,750 |
| PhilHealth | 2.5% of salary | Salary capped at ₱100,000 | ₱2,500 |
| Pag-IBIG | 2% of compensation | Compensation capped at ₱10,000 | ₱200 |
Two things stand out from this comparison. First, each program applies its cap differently — SSS uses a salary-credit table, PhilHealth caps the salary itself, and Pag-IBIG caps the compensation used for the percentage. Second, the maximum combined employee contribution across all three is roughly ₱4,450 per month (₱1,750 + ₱2,500 + ₱200), but only very high earners approach that total.
How contributions interact with your income tax
This is the part many employees miss. Your withholding income tax is not calculated on your gross salary. Instead, the three mandatory contributions are deducted first, and income tax is computed on what remains. Using the ₱30,000 example above, taxable income becomes ₱27,550 before any other deductions are considered. The result is a slightly lower income tax bill than you would face if contributions were ignored.
Understanding this ordering helps explain your entire payslip: gross salary → minus SSS, PhilHealth, and Pag-IBIG → equals taxable income → income tax computed on taxable income → take-home pay. The mandatory contributions therefore play two roles at once — they fund your social benefits and they reduce your income tax. If you want to see this entire chain computed automatically for your own salary, our take-home pay guide walks through it step by step.
Frequently asked questions
Are these contributions really mandatory?
Yes. For private-sector employees, coverage under SSS, PhilHealth, and Pag-IBIG is required by law. Employers must register employees, deduct the correct amounts, and remit them together with the employer share. Self-employed individuals, freelancers, and voluntary members pay the contributions themselves.
Why does my SSS deduction stop increasing even when I get a raise?
Because SSS uses a Monthly Salary Credit that is capped at ₱35,000. Once your salary puts you at the top MSC bracket, your employee share stays at ₱1,750 per month regardless of further raises.
Is Pag-IBIG always ₱200?
For most employees earning above roughly ₱10,000 per month, yes. The contribution is 2% of compensation, but the compensation used is capped at ₱10,000, so 2% of ₱10,000 equals the ₱200 maximum.
Do these contributions lower my income tax?
Yes. They are deducted from your gross salary before withholding income tax is calculated, which reduces your taxable income and therefore your tax.
Let the calculator do the math
Working out SSS, PhilHealth, and Pag-IBIG by hand is straightforward for a single salary, but it gets tedious if you are comparing job offers, planning a budget, or checking whether your payslip is correct. Our calculator applies the exact 2026 rates and caps shown on this page and combines them with the correct income tax computation, so you get an accurate take-home pay figure in seconds.
Disclaimer
This page is educational information about how mandatory Philippine government contributions are generally calculated for 2026. It is not professional tax, accounting, or legal advice, and contribution rates and rules can change. For amounts that apply to your specific situation, always confirm with the official agencies — SSS, PhilHealth, and Pag-IBIG — or consult a qualified professional. Please read our full disclaimer.