Changes to Phl Statutory Contributions in 2024

As featured on PhilStar:  Changes to Phl Statutory Contributions in 2024

As the year draws to a close, employees and employers closely monitor the statutory contributions landscape that includes government agencies, such as the Social Security System (SSS), Philippine Health Insurance Corp. (PhilHealth) and Home Development Mutual Fund (Pag-IBIG), especially when it comes to changes in contribution rates and premiums.

This year, the SSS experienced a noteworthy one percent increase in the contribution rate. Additionally, there was an adjustment to the minimum and maximum monthly salary credit (MSC), increasing it from P3,000 to P4,000 and P25,000 to P30,000, respectively. Meanwhile, both PhilHealth and Pag-IBIG maintained their rates as President Marcos issued an order to suspend any premium adjustments, acknowledging the enduring impact of the pandemic on the economy.

As we approach 2024, individuals and businesses are bracing themselves for new developments in statutory contributions. The most recent update indicates that the SSS will witness stability in 2024, with no expected change to the 14 percent total contribution rate. Employers will continue to contribute 9.5 percent, while employees will retain their 4.5 percent share. However, there is an impending increase in 2025, aligning with the provisions of the Social Security Act of 2018.

In contrast, PhilHealth is gearing up for adjustments in the absence of a directive from the President. Come January 2024, the premium rate is set to rise from four percent to five percent. Concurrently, there will be an increase in the maximum monthly basic salary ceiling, escalating from P80,000 to P100,000. These changes align with the Universal Health Care Law enacted by President Duterte in 2019.

Turning attention to Pag-IBIG, a significant shift is on the horizon starting January 2024. The monthly fund salary (MFS) will increase from P5,000 to P10,000, accompanied by a contribution rate hike from one percent to two percent. This implies that a Pag-IBIG Fund member’s contribution will double in 2024, leaping from P100 to P200. Notably, this increase will be matched by the employer, adding another P200 to the contribution, as mandated by the Pag-IBIG Board. Originally scheduled for implementation in 2021, the hike was deferred due to the pandemic’s impact on businesses.

The anticipated hikes in PhilHealth and Pag-IBIG contributions have been long overdue, and unless the President issues a deferment once again, these changes are set to take effect in January 2024. Employers and employees are advised to proactively prepare their budgets for the impending adjustments in the new year, ensuring financial stability amidst these evolving statutory contributions. As the clock ticks down to 2024, Filipino workers face a bit of a financial shake-up. The key takeaway? Stay informed, get ready for the changes and make sure your budget is in check. Navigating through the statutory contribution adjustments is a small step that can make a big difference for the new year.