Eloisa S.

Gavilan BSBA-HR 2ndYr

Compensation Administration

Activity 1 Compensation Administration Search and have a reflection on how you will be benefited to
the following : 1. Social Security System (SSS) 2. Pag-Ibig 3. Philhealth

The government provides Filipinos social welfare services through the Social Security System
(SSS), the Government Service Insurance System (GSIS), the Home Development Mutual Fund
(Pag-IBIG), and the Philippine Health Insurance Corporation (PhilHealth). To ensure that
everyone has access to these services, employers and employees are required by law to
contribute to these agencies through salary deductions as specified in the Philippine Labor Code.

Filipinos who are not formally employed in the private or public sector may apply as voluntary
members provided that they qualify to the membership requirements to avail the benefits as well.
While you are required to regularly pay your contribution to these social services, you might as
well know the benefits that you can avail.

Social Security System (SSS)

SSS is a social insurance program that aims to provide protection to its members and
beneficiaries, while GSIS serves as the counterpart social insurance program for those who work
in government. SSS members can avail of maternity, sickness, disability, retirement, funeral and
death benefits. SSS also allows qualified members to take up salary, housing, business,
educational loans.

The SSS contribution is 11% of an employee’s monthly salary1. The employer is required to
shoulder 7.37% of the total 11% contribution, while the remaining 3.63% is shouldered by the
employee. Based on the SSS contribution schedule, the minimum salary credit is 1,000, while the
maximum is 20,000. Thus, the minimum contribution per month could range from ₱120.00 to
₱2,400.00 depending on the person’s salary.

To illustrate, an average employee earns ₱31,253.332 monthly. In this case, the monthly salary
credit is 16,000, which is the maximum amount. The employer is required to shoulder ₱1,178.70
and ₱581.30 will be deducted from the employee’s salary every month. For voluntary members,
they may choose a comfortable monthly contribution, but they will shoulder the entire 11% of
their reported monthly income.
Home Development Mutual Fund (Pag-IBIG Fund)

The HDMF, commonly known as Pag-IBIG (Pagtutulungan sa kinabukasan: Ikaw, Bangko,

Industriya, Gobyerno) Fund, was established to provide a national savings program and an
affordable house financing for Filipinos. Aside from housing programs, it also offers savings
program and multi-purpose loans that qualified members can avail.

Pag-IBIG fund has a fixed monthly contribution of ₱200.00. For employed individuals, ₱100.00
will be shouldered by the employer, while the remaining ₱100.00 will be deducted to the
monthly salary of the employee.

Philippine Health Insurance Corporation (PhilHealth)

PhilHealth implements the National Health Insurance Program that aims to provide Filipinos
with financial assistance and access to affordable health services. It covers hospital costs,
subsidy for room and boarding, medicine, and professional services.

The compensation of the employee has a corresponding salary base which will be the basis of the
PhilHealth contribution3. The employer is required to shoulder half of the contribution and the
remaining 50% will be deducted monthly to the salary of the employee. The minimum salary
base is ₱10,000 and the maximum is ₱50,000, which is equivalent to the minimum contribution
of ₱275.00 and the maximum is ₱1,375.00 per month.

To illustrate, an average employee earns ₱31,253.334 monthly. Base on the PhilHealth

contribution schedule, the monthly salary grade based on the PhilHealth contribution table is
31,000. The total monthly contribution of the employee is ₱775.00 to PhilHealth. The employer
will shoulder ₱387.50 Pesos and the remaining ₱387.50 will be deducted monthly from the
employee’s salary.