PhilHealth contributions set to increase in 2024, Pag-IBIG to follow
2024 Payroll Updates: PhilHealth, Pag-IBIG contributions set to increase

2024 Payroll Updates: PhilHealth, Pag-IBIG contributions set to increase

Posted on January 9, 2024

Heads up, employers! PhilHealth contributions are set to increase to 5% from the previous 4% of the monthly basic salary. This comes after an announcement that the Philippine Health Insurance Corporation (PhilHealth) has updated its premium schedule effective January 1, 2024. The adjustment applies to income levels ranging from P10,000 to P100,000. According to PhilHealth, these changes are in line with the Universal Health Care Law of 2019 and are part of the agency’s plan to expand benefits to members.

The increase was planned earlier but delayed by President Bongbong Marcos because of the pandemic’s impact on businesses. 

In addition to the PhilHealth contribution increase, the Home Development Mutual Fund (Pag-IBIG) will also be implementing changes to its contribution rates. Starting in 2024, the monthly contribution rate for Pag-IBIG will increase from 1% to 2% of the employee’s monthly compensation. The agency also plans to raise the Monthly Fund Salary from P5,000 to P10,000 for 2024. Consequently, members will now contribute P200 monthly, with employers matching this amount.

However, official announcements regarding this change are still pending. This adjustment aims to provide better social security benefits and housing opportunities for Filipino workers.

To facilitate a smooth transition, employers should align their payroll management immediately to reflect these changes. This will help to ensure compliance and avoid any disruptions in their payroll operations.

SSS stability in the coming years

In contrast to the adjustments in PhilHealth and Pag-IBIG, the Social Security System (SSS) will remain stable in 2024, maintaining the 14% total contribution rate. Employers will continue to contribute 9.5%, while employees will uphold their 4.5% share. However, anticipation builds for 2025, with an impending increase aligning with provisions from the Social Security Act of 2018.

The year 2024 presents a series of pivotal adjustments across PhilHealth, Pag-IBIG, and SSS contributions, necessitating keen attention from employers and payroll practitioners. Adapting to these changes requires a nuanced understanding of each adjustment’s implications and proactive strategies to integrate them effectively.

While PhilHealth’s increased premium aligns with broader healthcare goals, the Pag-IBIG Fund’s adjustment reflects evolving economic considerations. Concurrently, the SSS stability provides a consistent framework for contributions, with an eye on forthcoming adjustments in 2025.

Navigating changes ahead

As these changes take effect, employers need to be aware of these changes and ensure that their payroll systems are updated accordingly. It is crucial to accurately calculate and deduct the correct amount from employees’ salaries to avoid any discrepancies or penalties. Failure to comply with the new PhilHealth contributions, as well as the planned Pag-IBIG contribution increase may result in legal consequences and financial burdens for both employers and employees.

While these changes may pose additional financial responsibilities for employers, it is important to remember that they are ultimately aimed at improving the overall welfare of Filipino workers. The increased contributions will contribute to the sustainability and expansion of social security and healthcare benefits, ensuring a better quality of life for all members.

At CloudCfo, we recognize the complexities of payroll management in the face of regulatory shifts. Our dedicated team remains committed to supporting employers and payroll practitioners in navigating these changes seamlessly. For inquiries on how CloudCfo’s payroll services can assist you in 2024, please reach out for personalized guidance.

Stay informed, stay compliant, and navigate 2024 with confidence.

For inquiries on CloudCfo’s payroll services, contact us today.

DISCLAIMER: This article is strictly for general information purposes only. Nothing in this article constitutes or intends to constitute financial, accounting, regulatory or legal advice and must not be used as a substitute for professional advice. It is still necessary to consult your relevant professional adviser regarding any specific matter referenced above.

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