I was the go-to person of my friends/colleagues in work when they’re trying to compute these deductions. So if you are looking on how to compute SSS contribution, Pag-ibig, PhilHealth, and BIR withholding tax then I think you came to the right place. You’ll be dealing with numbers but don’t worry because I made sure that you can easily follow the steps.
New SSS Contribution Table 2019
This post is updated due to the changes in SSS contribution in view of the recently approved “Social Security Act of 2018”. As a result, the table below is the new SSS contribution for an employed, self-employed, voluntary member, non-working spouse, kasambahay, and OFW member.
Definition of Terms
- Range of Compensation – is the lower and upper bound of your Monthly Salary Credit
- Monthly Salary Credit (MSC) – is used by SSS to calculate the employee’s benefits and just right beside the range of compensation.
- Employee Contribution (EE) – is the amount of contribution shouldered by the employee.
- Employer Contribution (ER) – is the amount of contribution shouldered by the employer.
- Self-employed (SE), Voluntary Member (VM), and OFW\
How to Compute Your Monthly SSS Contribution
The SSS contribution is the amount paid by the member in exchange for government-initiated social benefits. This is computed at 12% of your average monthly salary credit (MSC) but not exceeding Php 20,000. The employee’s share is 4% while the employer pays the remaining 8%.
Here is how to compute SSS contribution:
1. Use the Right SSS Contribution Table
SSS provided several tables to use depending on which category you fall into. So remember to always use the employee’s table if you are an employee, self-employed if you are doing business, non-working spouse if you are dependent on your spouse’s income, and so on.
2. Get your MSC
Look at the right table and search which bracket under the range of compensation your salary fits in. For example, if you are earning Php 20,000 per month then your salary is in the last bracket which is Php 19,750 and above. The corresponding MSC for the range of compensation is Php 20,000.
3. Look at the Employees Share
Using the MSC you found in step 2 the resulting employee (EE) share is Php 800. You can also manually compute this by multiplying your MSC with 4%.
So for example, if you are an employee earning Php 30,000 per month your SSS contribution will be Php 800 while your employer share is at Php 1,630. Recall that the maximum MSC is pegged at Ph 20,000 only.
How to Compute Pag-ibig Contribution
Home and Development Mutual Fund (HDMF) or otherwise known as Pag-ibig is a mandatory benefit given to employees. With the goal to provide both savings and shelter to every Filipino. Contributing member like you may get the savings, total contribution plus accumulated dividends when you reach any of the following:
- after 20 years of contribution
- at retirement
- when no longer able to work because of injury, illness, and/or insanity
- decided to migrate to another country
Also, note that the maximum compensation used to compute the contribution for this benefit is being shared by the employee and the employer is pegged at Php 5,000 only.
Here is the Pag-ibig contribution table 2019:
|Php 1,500 and below||1%||2%|
|Over Php 1,500||2%||2%|
So if you are earning Php 30,000 per month then your Pag-ibig contribution will be Php 100. Your salary is already above Php 1,500 so your contribution will be computed using 2% of Php 5,000 or simply Php 100.
How to Compute PhilHealth Contribution
PhilHealth or the Philippine Health Insurance Corporation has increased its premium contribution for the purpose of sustaining the growing need of Filipinos for medical care. The change in contribution has started last January 2018 that increased it to 2.75% from 2.5% of the member’s basic monthly salary.
Here is the PhilHealth contribution table 2019:
|Monthly Premium||Employee Share||
|10,000 & below||275||137.5||137.5|
|10,000.1 to 39,000||275.02 to 1,099.99||137.51 to 549.99||137.51 to 549.99|
|40,000 & above||1,100||550||550|
The table was derived from the simple formula of multiplying your monthly salary by 2.75% and dividing it by 2. This is done because the contribution is equally shared by the employer and employee with the maximum monthly salary of Php 40,000.
If you are earning Php 30,000 per month then your contribution is simply computed using the formula above (monthly salary*0.0275/2). In short, you just need to insert your monthly salary to the formula that will result to (Php30,000*0.0275/2) = Php 412.
How to Compute BIR Withholding Tax (2019)
Presently, the update in tax system commonly called as the TRAIN law has increased the threshold for non-taxable income up to Php 20, 833. This means that if you are earning less than Php 20,833 then you’re not subject for withholding tax.
Here is how you can compute for your BIR withholding tax:
1. Identify how frequent you receive your salary
Are you receiving your income weekly, semi-monthly, or monthly? Knowing this can help you recognize which bracket to use.
2. Compute for your net income
Withholding tax is computed using the net income. Remove first all the deductions like SSS, Pag-ibig, and PhilHealth from your gross income and look for the appropriate bracket.
3. Compute for the BIR withholding tax
Once you figured out which bracket to use you may now subtract the Compensation Level (CL). The resulting amount must then be multiplied to the corresponding withholding tax rate. And then add the minimum prescribed withholding tax under your bracket to get your withholding tax for that period.
As an example, if you are an employee earning Php 30,000 per month your withholding tax can be computed using the table above. First, you must identify the tax bracket where your salary falls after deducting SSS, Pag-ibig, and PhilHealth contribution. The resulting amount is Php 28,688 which falls on the second bracket. Your withholding tax should be Php 1,571 or 20% of Php 28,688 after being reduced by Php 20,833.
Computation of the Total Monthly Contribution
After learning how to compute for each monthly deductions you can now compute for the total deduction in your monthly salary. Using the previous example, in this case, let’s see how much you can get after the deductions.
You will get a total of Php 2,883 worth of deductions in your salary. Thus, your takehome pay is Php 27,117 only.
I hope this post helped you in computing for your SSS contribution, Pag-ibig, PhilHealth, and withholding tax with confidence. Always remember that knowing where your money goes is power when it comes to personal finance.
Even having all these memberships it may not be enough to give you peace of mind and financial security. So you must have a contingency plan or what we can “Plan B” to guard your future and the people you loved the most.
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Federico is an electronics engineer, financial blogger, insurance agent, and a certified investment solicitor. A multi-awarded financial advisor with clients ranging from lawyers, doctors, engineers, accountants, business owners, company directors, and OFWs to minimum wage earners had sought advice from him in achieving lifetime financial freedom.