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CEBU, Philippines — Workers in the private sector will notice changes in their paychecks as Social Security System (SSS) contribution rates rise starting on January 1, 2025.
This increase, aimed at securing the financial health of the state-run pension fund, will impact workers and employers alike but promises to strengthen the system’s ability to provide benefits for years to come.
The contribution rate will climb from 14 percent to 15 percent, as outlined in the new set of guidelines released by the SSS on December 19.
These updated rules will affect not just business employers and their employees, but also household workers, self-employed individuals, voluntary and non-working spouse members, as well as land-based Overseas Filipino Workers (OFWs).
What the changes mean for workers, employers
Under the new system, private sector workers and employers will see an adjustment in their Monthly Salary Credits (MSC), which determine how much they contribute to SSS. For instance:
Business employers and employees, self-employed, voluntary, and non-working spouse members: Minimum MSC will rise to P5,000, with a maximum of P20,000.
Household employers and workers: The minimum MSC will increase to P1,000, and the maximum will also be P20,000.
Land-based OFW members: Minimum MSC will jump to P8,000, with the maximum set at P20,000.
Those whose contributions fall between P20,000 and P35,000 will be directed into the Mandatory Provident Fund (MPF) Program, where they will grow based on the contributions made and any earnings from the investment.
For workers who have already paid ahead for 2025, the SSS urges them to settle any shortfall to align with the new minimum MSC.
Understanding the new SSS contribution table
The Social Security System (SSS) has released its updated contribution table, detailing the monthly contributions based on members’ compensation, effective January 1, 2025. Contributions are payable under two programs: the Social Security (SS) program and the Employees’ Compensation Program (ECP).
Under the SS program, members’ contributions are calculated at 15 percent of their Monthly Salary Credit (MSC), which represents the compensation base for benefits. The MSC ranges from a minimum of P5,000 to a maximum of P20,000, with contributions shared between employers (10 percent) and employees (5 percent). For contributions exceeding P20,000 but not beyond P35,000, the amount will be allocated to the Mandatory Provident Fund (MPF).
The ECP, meanwhile, remains an employer-only contribution. Employers will contribute P10 for employees with an MSC of P14,500 and below and P30 for those with an MSC of P15,000 and above. This policy, in effect since 2007, ensures additional coverage for work-related contingencies.
Additionally, all self-employed members have been covered under the ECP since September 2020, as per the Employees’ Compensation Commission (ECC) and SSS Joint Memorandum Circular No. 1, Series of 2020.
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Simplified computation (Example: ₱15,000 salary)
Step 1: Calculate the Total SS Contribution (15% of MSC)
– MSC: P15,000 × 15% = P2,250
– Employer’s share (10%): P15,000 × 10% = P1,500
– Employee’s Share (5%): P15,000 × 5% = P750
Step 2: Add ECP Contribution
– For an MSC of P15,000, the employer adds P30 to cover the ECP.
Total Contributions:
– Employee: P750 (deducted from salary)
– Employer: P1,500 (SS) + P30 (ECP) = P1,530
– Grand Total: P2,280
A necessary step for long-term security
SSS President and CEO Rolando Ledesma Macasaet explained that the increase is not just a regulatory change, but a vital step to keep the pension system strong for the 13 million workers it serves.
He stressed that the hike will not be a burden for employees, as it will be shouldered by employers.
“We understand that these changes may be difficult for some, but we are confident that this is in the best interest of our workers,” Macasaet said.
Macasaet also said that this adjustment would bring immediate benefits to Filipino workers.
“By bolstering the system, we are ensuring that workers and their families are protected against risks like illness, disability, and old age. This is not a cost, but an investment in their future,” he added.
For most employees earning less than P25,000 a month, the hike won’t affect their take-home pay, as employers will bear the brunt of the contribution increase.
For businesses, however, the adjustment will represent an additional operational cost. To help ease this burden, employers can also deduct their contributions from taxable income.
Employer reaction and SSS’s response
Meanwhile, not everyone is happy with the increased rates. Employer groups like the Philippine Chamber of Commerce and Industry (PCCI) and the Employers Confederation of the Philippines (ECOP) have expressed concerns, calling for a suspension of the increase.
They argue that the additional cost could be challenging for some businesses, especially smaller ones.
Despite this pushback, SSS officials remain firm on the necessity of the increase. They argue that delaying or halting the increase would hurt the fund’s future viability.
“While we understand the challenges faced by employers, we must prioritize the long-term health of the system and the well-being of the workers who rely on it,” he said.
He appealed to employers to see the contribution hike as an investment in the future.
“It’s not just an added expense; it’s a step toward ensuring that workers are protected throughout their lives,” Macasaet said.
He called on businesses to work together with the SSS in this shared responsibility.
PhilHealth has confirmed that it will not raise its contribution rates for 2025, despite the government removing its subsidy from the national budget. While the agency acknowledged the loss of financial support, it assured the public that it could still manage its finances without increasing premiums.
They even hinted at the possibility of lowering rates, citing its reserve funds, which could help absorb the impact of the funding cut. /clorenciana