Social Security System (SSS) is a social insurance program mandated by Philippine government intended for workers in the private sector. Every member submits a monthly contribution and in turn becomes entitled to benefits in times of sickness, maternity, retirement, disability, death, funeral and unemployment.
This blog provides the basics of SSS Contribution that will serve as a guide for employers who withhold monthly contributions shared by them and their employees.
HOW TO COMPUTE YOUR SSS CONTRIBUTION?
REVISED SSS CONTRIBUTION TABLE 2021 (FOR EMPLOYERS AND EMPLOYEES)
UPDATE: Based on the new SSS Circular No. 2020-033, SSS Contribution rate increases to 13% (4.5% for EE and 8.5% for ER) along with changes in Minimum and Maximum Monthly Salary Credit (MSC) effective January 2021. A new mandatory contribution for members having at least P20,000 monthly salary credit are also required to pay SSS Provident Fund contribution.
1. Range of Compensation
From this column, look for the bracket that corresponds to your employee’s monthly salary.
2. Monthly Salary Credit and Regular SS
To get a Regular SS contribution, you must base it on their monthly salary credit.
For instance, your employee’s basic salary is Php21,000.
From the bracket, you can see that its MSC (excluding provident fund) is Php20,000. As an employer, you will contribute Php1,700 and Php900 for every employee having Php20,000 MSC.
MSC x Rate
Employer: P20,000 x 8.5% = 1700
Employee: P20,000 x 4.5% = 900
3. Employee’s Compensation (EC)
Employers also have to pay a monthly contribution for the Employees’ Compensation (EC) Program.If your employee has a salary below P15,000, you are required to contribute Php10 and Php30 for Php15,000 and above employee’s salary.
From the above example, you will contribute Php30. You now have a Php1,730 contribution and Php900 for your employee.
4. Mandatory Provident Fund (MPF)
MPF will only be applied if your employee has a monthly salary credit of at least Php20,000 and contribution shall be shared by both. Furthermore, MPF Contributions shall always be paid together with Regular SS and EC.
Continuing the example, from the excess of Php20,000 in your total MSC, you will withhold Php45 to your employee, and Php85 for your share.
Employer: Php1,000 x 8.5% = Php85
Employee Php 1,000 x 4.5% = Php45
5. Total Contribution
On the rightmost column, you will see the total contribution for both employer and employee.
Therefore, if the employee has a basic salary of Php21,000, employer will withhold Php945 from employee’s salary, and will share Php1,815 in the total contributions that will be remitted to the said agency.
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