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Home » Law and Taxation » Understanding Your Payslip: Payroll Deductions in the Philippines

Understanding Your Payslip: Payroll Deductions in the Philippines

in Law and Taxation on 01/06/14

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January 15 is so near na!

It is sweldo time again!

I bet most of you can’t wait (I can’t.  I practically squandered mine – just a little percentage lang naman, honestly…)and are itching to go to the nearest mall and withdraw at an ATM Machine.

But have you ever wondered about those confusing numbers and shocking deductions from your hard-earned salary or you are contented with what you can withdraw?

It is time to figure out your payslip amidst the number jumble.

Payslips are more than twice-a-month reminder of how much you are earning.  Besides stating your salary for that payroll period like what is in Nominak, it also contains other income not included in your basic monthly salary, such as unused vacation leaves, deductions that are dependent on company policy and deductions that are mandated by the Philippine government such as Philhealth, Social Security System, and Pag-IBIG
contributions.

Do you have your TIN Card?  How to apply here.

Your payslip may also be used as documentation when  applying for loans or credit accommodation, insurance and other purposes where proof of income is required.

WHAT ARE THE COMPONENTS OF A PAYSLIP?

  1. Basic gross pay for the payroll period
  2. Overtime
  3. Vacation and sick leaves
  4. Thirteenth month pay (if included in that month
  5. Bonuses, if any
  6. Deductions
                a. Philippine Health Insurance (Philhealth) contributions*
                b. Social Security System (SSS) contributions*
     c. Pag-IBIG (Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya at Gobyerno) Fund contribution*
     d.  Loan Payments (if any)
     e.  Withholding tax
     f.  Deductions brought about by company policy (such as stock option payments, company loans, union dues, etc.)
*GOVERNMENT-MANDATED BONUSES
 
A member of any of these government programs can be assured of financial benefits arising from possible events that result from loss of income.  Opportunities to avail of housing, medical, and financial aid are open to members provided that proper contributions and eligibility requirements are complied with.
Pag-IBIG MEMBERSHIP
 
With
the signing of Republic Act No. 9679, membership to the Fund shall be mandatory
for the following: 

a. All employees, workers, professionals, officers and companies who are
compulsorily                               covered by the SSS and GSIS

b. Uniformed members of the Armed Forces of the Philippines, the Bureau of Fire
Protection,                       the Bureau of Jail Management and Penology, and the Philippine National Police;
c. Overseas Filipino Workers (OFWs)
d. Filipinos employed by foreign-based employers, whether deployed locally or
abroad.
Membership
to the Fund is also open to the following:
 
a. Non-working spouses of Pag-IBIG members;
b. Filipino employees of foreign government or international organization, or
their wholly-                            owned instrumentality based in the Philippines, in the absence of an administrative                                agreement with the Fund;
c. Employees of an employer who is granted a waiver or suspension of coverage
by the Fund                      under RA 9679;
             d. Leaders and members of religious groups;
e. A member separated from employment, local or abroad, or ceased to be
self-employed but                        would like to continue paying his/her
                    personal contribution;
f. Public officials or employees who are not covered by the GSIS such as
barangay officials;                            and
g. Filipinos naturalized in other countries.
How much
is the monthly Pag-IBIG contribution?
The maximum monthly compensation used in computing the
employee contributions is set at PHP 5,000.00.
This means that the maximum member contribution and employer counterpart
per month are both currently PHP 100.00.
 While being a member
of Pag-IBIG is usually associated with housing loans, it also offers savings
benefits and short-term loans.
PHILHEALTH MEMBERSHIP
 
Every employee is mandated to join Philhealth through his
employer.  Philhealth provides financial
assistance for medical emergencies.
Membership is also extended to the following :
  1.  Self
    employed individua
  2.  Retirees
    and pensioners of the GSIS and SSS
  3.  Retirees
    and members who have reached the retirement age
  4.  Other
    eligible members are dependents, such as non-members, legitimate spouses,
    children below 21 years old who are unmarried and unemployed and parents 60
    years old and above.

 

PhilhealthPremium Contribution Table 2014
*Employee share represents half of the total monthly premium 
while the other half is shouldered by the employer.
The amount deducted by Philhealth is the first to be used up
during a medical emergency.  This
includes both in-patient and out-patient hospital care.  For confinement, you must have paid at least
three consecutive contributions
prior to your confinement to avail of the
benefit.
SSS MEMBERSHIP
 
SSS membership is compulsory for the following Filipinos:
  1. A private employee who is 60 years old and below
  2. A household helper earning at least PHP 1,000.00
  3. Seafarers, foreign government employees, a parent, a spouse
    or child below 21 years old of the owner of single proprietorship business
  4. Self-employed individuals.

 

Computation of SSS Contribution
 
The wide range of SSS benefits and loans mainly covers the
following points: In case of death, sickness, disability, maternity.  In other cases wherein the loss of income
might occur, SSS is of service to help out its members.
Read:  What are your benefits as an SSS Member?

And here is a separate post on the detailed computation of your SSS Contribution, including the new SSS Contribution Table Effective 2014.And a post on your 13th Month Pay and is it taxable.

How to compute your Income Tax Withheld.

 

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Comments

  1. Nathalie says

    January 9, 2014 at 1:06 am

    How about GSIS contributions sis? Yun yung masakit-sakit talaga sa bulsa eh, ang laki-laki ng kaltas pero parang wala naman talagang tangible benefits. :/

    • venessapaula1@gmail.com says

      January 9, 2014 at 9:07 am

      Yup sis i will do a post on it 🙂

  2. Allan Domencil says

    January 9, 2014 at 8:05 am

    One thing I really want to know is how they compute for the witholding tax. Ang laki kasi ng kaltas. Yung ibang kasama ko, halos lahat lang ng OT pay nila sa tax napupunta.

    Allan (www.chemistdad.com)

    • venessapaula1@gmail.com says

      January 9, 2014 at 9:09 am

      Yup, I will do a post on it. Medyo madugo kasi kaya I will be discussing it in another post. I bet marami sa inyo ang biglang lumiit or lumaki ang sweldo this december? Yun ang effect ng year-end adjustment para masigurado ng bir na your tax due was properly withheld.

  3. Meikah Ybañez-Delid says

    January 10, 2014 at 2:28 am

    Very useful post, Marie! 🙂 Yeah, asar ang tax! Especially if your pay gets higher. Hehehe

  4. Dominique Goh says

    January 10, 2014 at 6:06 am

    Interesting to read about how taxation is in Philippines. It really looks complicated.

  5. Melgie Campbell says

    January 10, 2014 at 4:34 pm

    This is very useful! I should take a closer look kasi it seems like mostly sa sahod ko prang tax lahat heheheh..:)

  6. Vera says

    January 10, 2014 at 4:43 pm

    Ang daming nagreklamo about the 13th month pay release namin, kasi bakit daw na tax haha. Kaya important talagang conversation ang witholding tax. 🙂

    Happy New Year, Marie!

  7. Mayette Domencil says

    January 11, 2014 at 4:17 am

    My tax didn't change kahit may anak na ako, huhu… Sabi naman nila kasi daw na kay Daddy A naka-under sa dependent si Matt. So I look forward to your tax computation. Sana lang un overtime non taxable din, hehe…

    Mommy Maye
    http://www.ourfamilyblogsabout.info

  8. Sally Yu says

    January 14, 2014 at 11:12 am

    Hi Marie, I love your detailed post about these. Thanks for this useful info. Would you know how to continue paying for personal contribution both for Pag-ibig and Philhealth? Where are their offices? Pag-ibig would be P200 right while Philhealth would be based on the salary range? Thanks! 🙂

  9. Anonymous says

    January 19, 2014 at 9:42 am

    Hi, this question is kind of unrelated,but i've been looking in the net for answers on whether a company who is employing a minimum wage earner needs to file income tax return for this also if the company need to file compensation tax return for the employee?

    • venessapaula1@gmail.com says

      January 19, 2014 at 12:54 pm

      The Minimum Wage Earner's company will give him BIR Form 2316 – Certificate of Tax Withheld – (since MWE will be included in the alphalist that company will submit to the BIR). The BIR Form 2316 will contain his data as an MWE under items 12,13 and 14. This Form will serve as "substituted filing" The BIR Form 1604C/F with the alphalist which the company will file to the BIR shall consititute as the MWE's Income Tax Return and the BIR Form 2316 shall serve the same purpose as if the Employee's ITR has been filed. If some agencies or offices or banks require the MWE to submit the ITR, the BIR Form 2316 will do. Here's how the Form looks like: ftp://ftp.bir.gov.ph/webadmin1/pdf/16992316.pdf

  10. Lestat Leiffe says

    February 24, 2014 at 10:58 pm

    Hi… this is so helpful, would like to ask lang po regarding payslips? When should they be given to the emplyees? Is there any law in our labor code regarding this po? Hope you could enlighten us on this matter. God bless and thanks in advance. 🙂

  11. Anonymous says

    February 24, 2014 at 11:02 pm

    Hello po… this blog is so helpful for us, thanks for this. Would like to ask regarding payslips po. Hope you could enlighten us on this. When should be payslips be given out po? Is there a law sa labor code po natin regarding this? Our company po kasi late magbigay ng payslips, a month to month and a half, then sometime you need to request for it. Thanks in advance and God bless. 🙂

  12. Anonymous says

    March 10, 2014 at 12:07 pm

    ang witholding tax po bah kailangan ng minimum wage as a basis para sa deduction?

    • Marissa Bautista-Bulatao says

      May 10, 2014 at 6:29 am

      If pasok sa minimum wage ang sahod mo, exempt ka sa withholding

  13. Anonymous says

    May 7, 2014 at 10:37 am

    Hi! I just want to ask, if I have SSS loan and Pag IBIG loan, do they affect my tax?

    • Marissa Bautista-Bulatao says

      May 10, 2014 at 6:30 am

      Nope. Your withholding tax will be based on your taxable compensation income (and hindi nabawas doon ang mga hulog mo sa loan mo)

  14. Anonymous says

    September 23, 2014 at 12:31 pm

    What is the percentage of the the tax withheld to the overall compensation?

    • venessapaula1@gmail.com says

      October 8, 2014 at 3:17 am

      The income tax system in our country is progressive, meaning the tax is dependent on your taxable income. the higher your income is, the higher is your tax.

  15. Anonymous says

    November 14, 2014 at 2:39 am

    hi how can I be sure kung hinuhulog ng company namin ung monthly contribution namin sa Philhealth or SSS? thanks in advance po.

  16. Anonymous says

    January 11, 2015 at 10:03 am

    Can you withdraw the Payment/Tax Withheld in BIR? The Total Taxable Compensation Income?

    Just asking? Cause I only recieved 1,034 peso in my Company benefit… though it's only 2 months.. I just resigned .. and recieved this reference of Payment/Tax Withheld I don't have knoledge about the Tax thanks in advance…

    • venessapaula1@gmail.com says

      January 11, 2015 at 11:35 am

      The tax credit/refund will show in your bir form 2316. If you are going to have a new job, you need this 2316. Income tax kasi is due annually. for example, for year 2014, your total income for 2014 will be taxable on april 15. ang ginawa sana ng company mo is to refund the tax withheld after the computation of your tax due.

    • Anonymous says

      January 12, 2015 at 4:23 am

      Yes po I have that form 2316 recieved from my company I just resigned po last year may 2014.. yung naka lagay po sa Total Taxable Compensation Income amount is 16,027 peso so.. pwede ko po ba ma withdraw yun o hindi na po? Thanks po in advance..

    • Anonymous says

      March 21, 2015 at 2:26 pm

      Yes or no lang po kung ung Taxable is not a withdrawal or the Non-Taxable is a withdrawal?

      May makukuha pa po ba ko mam? Tnx in advance.

    • venessapaula1@gmail.com says

      March 22, 2015 at 4:45 am

      Yung taxable compensation income is yung total income mo subject to tax. Tax due is the tax on that taxable compensation income. tax withheld is the amount na nawithhold sa kumpanya. if nawithholdan ka ng tama, even or 0 ito (halimbawa: tax due-2000, tax withheld 2000, tax still due – 0).i don't understand what you mean by withdraw? total taxable compensation income kasi is your income/sweldo. naibgay na sa yo ng kumpanya mo. if mas malaki yung tax withheld sa 2316 mo, that means nasobrahan ka ng withholding. if magtatrabaho ka ulit, give the 2316 sa new employer mo para come end of the year, icoconsolidate nila yung income mo from your previous company para magzero out. if di ka naman nagkatrabaho after may 2014 and may tax withheld sa 2316 mo, file bir form 1700 http://www.bir.gov.ph/images/bir_files/old_files/pdf/82202BIR%20Form%201700.pdf attach your 2316. If tax due is less than tax withheld (ex tax due 2000, tax withheld – 3000, overpayment 1000), your return will also serve as an application for tax refund in which case the bir will need to give back the overpayment within 2 years

  17. Harizon cabigas says

    August 18, 2015 at 10:26 am

    Mai deduction na po ba sa salary kahit d kapa member sa SSS at philhealth? Kasi mai mga deduction na po sa payroll ko..tapos pag check ko sa SSS at philhealth ko..d pa ako member parang hindi nag submit ng report for employee coverage ang employer ko..thanks

    • venessapaula1@gmail.com says

      September 4, 2015 at 10:17 pm

      Hi, Harizon. Baka yung deduction from your payroll is Income Withholding tax. SSS and philhealth deductions are different but check your payslip on what your employer is deducting and ask them 🙂

  18. Anonymous says

    December 3, 2015 at 1:53 am

    Hello mam.magkanu po ang mandatory deduction s pagibig pagnagcompute ng tax is it 100 or 2% of d basic.thank u and
    God bless.

  19. Anonymous says

    December 21, 2015 at 1:21 am

    hi mam, ask lang is Payslip a mandatory requirement for an employer to give to it his employee ?

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