Simplify HR Tasks: Preparing Philippine Monthly Mandatory Contributions Made Easy

Simplify HR Tasks: Preparing Philippine Monthly Mandatory Contributions Made Easy

Handling HR and payroll tasks can be challenging — especially for small and medium enterprises (SMEs) in the Philippines. Between managing attendance, salaries, and government compliance, it’s easy for HR teams to feel overwhelmed.

One of the most critical parts of payroll management is preparing monthly mandatory government contributions such as SSS, PhilHealth, and Pag-IBIG. Missing deadlines or miscalculating payments can lead to penalties and employee dissatisfaction.

In this article, we’ll walk you through the step-by-step process of preparing monthly contributions — and how automation tools like PinoyCode can make the process faster, easier, and error-free.

What Are Mandatory Contributions in the Philippines?

In the Philippines, both employers and employees are required to contribute to three main government agencies:

  1. SSS (Social Security System) – Provides social insurance benefits such as sickness, maternity, disability, and retirement.
  2. PhilHealth – Offers health insurance coverage for employees and dependents.
  3. Pag-IBIG Fund (HDMF) – Helps employees save for housing and provides short-term loans.

These are mandatory under Philippine labor laws and must be remitted monthly by all employers.

When to Pay Monthly Contributions

ContributionPayment DeadlineNotes
SSSBased on employer number (10th–31st of the month)Check SSS circular for specific cut-off
PhilHealthEvery 11th–15th of the following monthMay vary for government offices
Pag-IBIGEvery 10th of the following monthEmployers may remit earlier

💡 Tip: Always refer to the latest circulars from each agency for updated deadlines and contribution tables.

Step-by-Step Guide to Preparing Monthly Mandatory Contributions

Let’s simplify the process for HR staff and business owners:

Step 1: Gather Employee Payroll Data
Before computation, make sure you have:

  • Employee list and IDs
  • Gross salary and pay period data
  • Attendance and overtime details

This ensures your contributions are based on accurate payroll amounts.

Step 2: Compute Employee and Employer Shares
🏦 SSS Contribution (2025 Rate Example)

  • Employee share: 4.5%
  • Employer share: 9.5%
  • Total: 14% of monthly salary credit (MSC)

Example:
If an employee’s MSC is ₱20,000
→ Employee share: ₱900
→ Employer share: ₱1,900
→ Total: ₱2,800

🏥 PhilHealth Contribution (2025 Rate Example)
Rate: 5% of monthly salary (split 50/50 between employer and employee)
Salary floor: ₱10,000
Salary ceiling: ₱100,000

Example:
If salary = ₱30,000 → 5% × ₱30,000 = ₱1,500
→ Employer share: ₱750
→ Employee share: ₱750

🏠 Pag-IBIG Contribution
Employee share: 1% (if monthly salary ≤ ₱1,500) or 2% (if > ₱1,500)
Employer share: 2%
(Capped at ₱100 employee contribution)

Example:
If salary = ₱30,000 → Employee ₱200 + Employer ₱200 = ₱400 total.

Step 3: Prepare Payment Reports
Each agency requires specific reports before remittance:

  • SSS R-3 or e-Contribution File
  • PhilHealth ER2 or Electronic Contribution Report
  • Pag-IBIG MCRF or Online File Upload

Generate these reports accurately to match your payroll data.

Step 4: Submit and Pay Online
Most agencies now accept online payments, making it easier than ever to stay compliant:

You can pay via bank transfer, payment center, or online gateways.

Step 5: Keep Records for Compliance
Keep soft and hard copies of:

  • Remittance receipts
  • Reports submitted
  • Acknowledgment emails or reference numbers

The DOLE requires employers to keep these records for at least 3 years for auditing and verification purposes.

How PinoyCode Simplifies Mandatory Contribution Preparation

Manually computing contributions each month can take hours — and even one wrong entry can cause compliance issues.

With PinoyCode, HR teams can save time and reduce errors through automation:

✅ Auto-computes SSS, PhilHealth, and Pag-IBIG deductions
✅ Generates monthly reports instantly
✅ Integrates with timekeeping and payroll
✅ Cloud-based access — anytime, anywhere
✅ 100% compliant with Philippine labor standards

By using PinoyCode, your HR team can focus more on people — and less on paperwork.

Final Thoughts

Preparing monthly mandatory contributions doesn’t have to be complicated. By following this step-by-step guide — and leveraging automation tools like PinoyCode — you can save time, avoid penalties, and ensure accuracy every single month.

Work smart. Stay compliant. Simplify HR with PinoyCode.

👉 Learn more at www.pinoycode.com

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