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Manila Bulletin devider Business devider Private sector workers face higher SSS deductions beginning 2025

Private sector workers face higher SSS deductions beginning 2025

Published Dec 27, 2024 05:44 am

Private sector workers will soon face higher Social Security System deductions as the state-run pension fund announced increased contribution rates to shore up revenues and ensure long-term stability.

Effective Jan. 1, 2025, the SSS contribution rate will rise to 15 percent, according to Circulars No. 2024-006 to 2024-010, which cover five member groups. These circulars, released on Dec. 19, supersede Circulars No. 2022-033 to 2022-037, which outlined the 2023 contribution rate at 14 percent.

The adjusted contribution rate will apply to all business employers and employees, household employers and workers (kasambahay), self-employed individuals, voluntary and non-working spouse members, and land-based Overseas Filipino Worker (OFW) members.

For business employers and employees, self-employed members, voluntary members, and non-working spouse members, the minimum Monthly Salary Credit (MSC) will increase to P5,000, while the maximum MSC will be adjusted to P20,000.

For household employers and workers, the minimum MSC will increase to P1,000, with the maximum also adjusted to P20,000.

For land-based OFW members, the minimum MSC will increase to P8,000, with a maximum MSC of P20,000.

Members who have paid contributions in advance for January 2025 and beyond must settle any underpayment to maintain their contributions at the new minimum MSC.

Contributions to MSCs ranging from P20,000 to P35,000 will be allocated to the Mandatory Provident Fund (MPF) Program. These contributions will be credited to members' individual accounts, with benefits calculated based on the total accumulated value, including contributions and net investment income.

These changes are mandated by the Social Security Act of 2018 (Republic Act No. 11199) and Social Security Commission Resolution No. 560-s.2024.

PhilHealth confirms no rate hikes

In related news, the Philippine Health Insurance Corp., commonly known as PhilHealth, announced that there would be no rate increases, despite not receiving a subsidy from the government.

Earlier this month, the bicameral committee decided to remove PhilHealth's subsidy from the 2025 budget.

However, PhilHealth expressed its willingness to adjust if the General Appropriations Act (GAA) requires it. The agency also hinted at the possibility of lowering rates, citing substantial reserve funds.

PhilHealth reported a surplus of P150 billion, a total reserve of P200 billion, and nearly P489 billion in investments, asserting its strong financial position and ability to serve its 115 million members.

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