Key facts at a glance
SSS employee share
5%
capped at ₱1,750/month
PhilHealth employee share
2.5%
floor ₱10,000 / ceiling ₱100,000 base
Pag-IBIG employee share
2%
capped at ₱200/month
On a ₱600,000 annual salary, SSS, PhilHealth, and Pag-IBIG together take ₱38,400 a year (₱21,000 SSS, ₱15,000 PhilHealth, ₱2,400 Pag-IBIG) before BIR income tax is even calculated. That leaves ₱561,600 as taxable income, which then owes ₱54,820 in BIR tax, for total deductions of ₱93,220 and a net take-home of ₱506,780 a year, about ₱42,232 a month.
This is why a Philippines payslip starts below gross well before the word tax appears anywhere on it. SSS, PhilHealth, and Pag-IBIG are mandatory, non-negotiable, and deducted first, and each one works differently: one scales with pay up to a cap, one has both a floor and a ceiling, and one is capped so low it barely moves regardless of salary.
See your exact SSS, PhilHealth, and Pag-IBIG breakdown.
Open the Philippines calculatorHow each contribution actually works
SSS takes 5% of your Monthly Salary Credit, a government-set figure derived from your actual pay, capped at ₱35,000. Once monthly gross crosses ₱35,000, SSS stops growing at exactly ₱1,750 a month, ₱21,000 a year, no matter how much more you earn above that. It funds retirement, disability, sickness, maternity, and death benefits, and your employer pays a separate, larger share alongside yours.
PhilHealth takes 2.5% of monthly basic pay (the full premium is 5%, split evenly between employee and employer), but the base it's calculated on has both a floor (₱10,000, so very low earners still pay on at least ₱10,000) and a ceiling (₱100,000, so the maximum employee share is ₱2,500 a month). It funds the national health insurance program.
Pag-IBIG takes 2% of monthly compensation, but is capped at just ₱200 a month, an amount that hasn't kept pace with salary growth the way SSS and PhilHealth's higher caps have. It funds a savings program and subsidized housing loans, and while modest, it's a real benefit you can eventually draw on or borrow against.
Whatever's left after all three is subtracted from gross pay becomes taxable income, which is what the BIR TRAIN Law's graduated brackets actually apply to, not the stated gross salary. See our dedicated BIR TRAIN explainer for how that part works.
The three mandatory contributions, side by side
| Contribution | Employee rate | Cap | What it funds |
|---|---|---|---|
| SSS | 5% of Monthly Salary Credit | ₱1,750/month max | Retirement, disability, sickness, and death benefits |
| PhilHealth | 2.5% of monthly basic pay | Floor ₱10,000 / ceiling ₱100,000 base | National health insurance coverage |
| Pag-IBIG | 2% of monthly compensation | ₱200/month max | Housing loans and provident savings fund |
Why higher earners pay a shrinking share
Because SSS caps at ₱35,000 of monthly pay and Pag-IBIG caps at just ₱200 a month regardless of salary, someone earning ₱150,000 a month pays the exact same peso amount of SSS and Pag-IBIG as someone earning ₱35,000 a month. Only PhilHealth keeps scaling, up to its own ₱100,000 ceiling. As salary rises past these caps, mandatory contributions shrink as a percentage of gross pay, even though BIR tax keeps climbing through its own higher brackets.
Turn your salary into a real take-home number
See SSS, PhilHealth, Pag-IBIG, and BIR tax broken down together.
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Frequently asked questions
Why does my Philippines payslip already look lower than my quoted gross salary before tax even shows up?
Because SSS, PhilHealth, and Pag-IBIG all come off your gross pay first, and only what's left is your taxable income under the BIR TRAIN schedule. On a ₱600,000 annual salary, that's ₱38,400 in combined contributions before BIR tax is even calculated, so the number labeled taxable income on your payslip is already meaningfully below your stated gross.
What is SSS and how is it calculated?
SSS (Social Security System) funds retirement, disability, sickness, maternity, and death benefits. The employee share is 5% of your Monthly Salary Credit (MSC), which is capped at ₱35,000, so the maximum you'll ever pay is ₱1,750 a month (₱21,000 a year) regardless of how much above ₱35,000/month you earn. Your employer contributes a separate, larger share on top, which doesn't come out of your pay.
What is PhilHealth and how is it calculated?
PhilHealth is the national health insurance program. The employee share is 2.5% of monthly basic pay (the full premium is 5%, split evenly between employee and employer), calculated on a contribution base with a ₱10,000 floor and a ₱100,000 ceiling. At the ceiling, that's a maximum employee contribution of ₱2,500 a month, ₱30,000 a year.
What is Pag-IBIG and why is the cap so much lower than SSS or PhilHealth?
Pag-IBIG (the Home Development Mutual Fund) is 2% of monthly compensation, but capped at just ₱200 a month, ₱2,400 a year, regardless of salary. It funds a savings program and subsidized housing loans, and the low cap reflects its original design around a modest, universal savings contribution rather than an income-scaled insurance premium the way SSS and PhilHealth are structured.
Do these contributions ever feel unfair or disproportionate at higher salaries?
Yes, and the reason is the caps. Because SSS and Pag-IBIG cap out at fixed peso amounts once monthly pay crosses ₱35,000, contributions become a shrinking percentage of gross pay as salary rises. A ₱50,000-a-month earner and a ₱150,000-a-month earner pay the exact same ₱1,750 SSS and ₱200 Pag-IBIG, only PhilHealth keeps scaling up to its own ceiling. That's by design, these are capped social insurance schemes, not income-proportional taxes, but it does mean the mandatory-contribution share of a payslip looks very different across income levels.
What's an edge case where these numbers don't apply as expected?
If monthly pay is below ₱10,000, PhilHealth still applies to a ₱10,000 floor rather than actual (lower) pay, so very low earners pay slightly more PhilHealth than a strict percentage-of-pay calculation would suggest. And changing employers mid-year resets contribution reporting with the new employer rather than carrying it over, which can occasionally cause a temporary mismatch in SSS or PhilHealth records until it's reconciled.
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