Private sector workers in the Philippines will experience increased Social Security System (SSS) deductions starting January 1, 2025.
This adjustment comes as part of a broader effort by the state-run pension fund to boost revenues and safeguard its financial stability for the future.
Under the newly released Circulars No. 2024-006 to 2024-010, the SSS contribution rate will rise to 15 percent from the current 14 percent, as set in the 2023 rate schedule.
These circulars, which were issued on December 19, 2024, apply to five member groups: business employers and employees, household employers and workers (kasambahay), self-employed individuals, voluntary members, and land-based Overseas Filipino Workers (OFWs).
Key Adjustments in Contribution Rates
For business employers and employees, self-employed members, voluntary members, and non-working spouses:
- Minimum Monthly Salary Credit (MSC): Increased to PHP 5,000.
- Maximum MSC: Adjusted to PHP 20,000.
For household employers and workers:
- Minimum MSC: Increased to PHP 1,000.
- Maximum MSC: Also set at PHP 20,000.
For land-based OFW members:
- Minimum MSC: Increased to PHP 8,000.
- Maximum MSC: Capped at PHP 20,000.
Members who have paid contributions in advance for January 2025 and beyond must ensure their payments align with the new minimum MSC, or they will need to settle any underpayment.
Mandatory Provident Fund Allocations
The new contribution schedule also affects members contributing at the higher MSC bracket of PHP 20,000 to PHP 35,000.
These contributions will be allocated to the Mandatory Provident Fund (MPF) Program, credited directly to members’ individual accounts.
Benefits under the MPF will be computed based on the total accumulated value, which includes contributions and net investment income.
Legal Basis for the Changes
These changes are guided by the Social Security Act of 2018 (Republic Act No. 11199) and are further supported by Social Security Commission Resolution No. 560-s.2024.
The adjustments aim to reinforce the SSS fund’s stability and provide improved benefits to its members in the long term.
Schedule of SSS Contributions (Effective January 2025)
Starting January 1, 2025, the Social Security System (SSS) in the Philippines will implement the final phase of its scheduled contribution rate increases, raising the rate to 15% from the current 14%.
Key Changes:
- Contribution Rate Increase: The total contribution rate will rise to 15%. For employed members, employers will contribute 10%, while employees will contribute 5%. Self-employed, voluntary members, and Overseas Filipino Workers (OFWs) will shoulder the entire 15% themselves.
- Monthly Salary Credit (MSC) Adjustments: The MSC, which determines the amount of contributions, will be updated to reflect the new rates. The exact MSC ranges and corresponding contributions will be detailed in the updated SSS Contribution Table for 2025.
Impacts on Members:
- Enhanced Benefits: The increase in contributions is designed to strengthen the SSS fund, ensuring its long-term sustainability and enabling the provision of enhanced benefits to members, including higher pension payouts upon retirement.
- Financial Planning Considerations: Members will need to account for the higher deduction in their financial planning. For employees, the additional 0.5% deduction from their salary may require adjustments in budgeting. Self-employed and voluntary members should prepare for the full 1% increase in their contributions.
- Employer Obligations: Employers will experience a 0.5% increase in their share of contributions, raising it to 10%. This adjustment underscores the shared responsibility between employers and employees in maintaining the social security system.
Video: SSS to push contribution hike in 2025 | ANC
State-run Insurance Fund SSS expects its net income to reach 140 billion pesos this year, a 68% increase from last year’s 83 billion pesos. This projection is due to a rise in membership, with net income already at nearly 57 billion pesos as of July. The SSS anticipates gaining at least 4 million new members this year, contributing an additional 3 billion pesos.
To keep the pension fund viable, SSS will implement the final tranche of the mandated contribution hike next year. Republic Act 11-199 mandates a 1% increase in the contribution rate every two years, starting from 12% in 2019 and reaching 15% in 2025. Under the new rate, employers will shoulder 10%, while employees’ share will rise to 5%.
PhilHealth Confirms No Rate Hikes
In related developments, the Philippine Health Insurance Corp. (PhilHealth) has announced that it will not impose rate increases for 2025, even after the bicameral committee’s decision to exclude its subsidy from the national budget.
Despite this loss of government funding, PhilHealth expressed confidence in its financial capacity to serve its 115 million members.
PhilHealth currently reports a surplus of PHP 150 billion, with total reserves reaching PHP 200 billion and investments nearing PHP 489 billion.
These strong financial metrics, according to the agency, make it possible to maintain or even lower contribution rates if mandated by the General Appropriations Act (GAA).
Public Reactions and Next Steps
The SSS’s announcement has sparked mixed reactions among members.
While some workers acknowledge the importance of protecting the fund’s future, others express concerns about the increased financial burden, particularly amid rising living costs.
Employers have also raised questions about the implications for payroll and compliance requirements.
SSS officials have assured the public that the adjustments are necessary to support members’ retirement and social protection needs.
Meanwhile, they encourage members to regularly check their contributions and MSCs to stay aligned with the new guidelines and maximize their benefits.
As the implementation date approaches, both SSS and PhilHealth emphasize the importance of maintaining transparency and engaging with stakeholders to address any concerns.
Further updates are expected as the agencies release additional guidelines on the changes.