What Deductions Are Taken From My Salary?
Mandatory salary deductions in the Philippines include SSS (RA 11199), PhilHealth (RA 11223), Pag-IBIG (RA 9679), and withholding tax (TRAIN Law).
Four mandatory deductions are taken from every employed worker's salary in the Philippines: SSS, PhilHealth, Pag-IBIG, and withholding tax. These are required by law — your employer has no choice but to deduct them. Together, they typically amount to 8-15% of your gross salary depending on your income level. Here is what each one is and how much it costs you.
1. SSS (Social Security System)
Legal basis: Republic Act No. 11199 (Social Security Act of 2018)
SSS provides members with social insurance benefits: sickness, maternity, disability, retirement, death, and funeral benefits. Your contribution amount depends on your salary bracket.
How it's computed: Your monthly salary is mapped to a Monthly Salary Credit (MSC) ranging from ₱5,000 to ₱35,000. The employee share is:
- Regular SS: 5% of MSC (capped at MSC ₱20,000 = ₱1,000 max)
- MPF: 5% of MSC excess above ₱20,000 (applies if your MSC exceeds ₱20,000)
| Monthly Salary | Employee Share |
|---|---|
| ₱10,000 | ₱500 |
| ₱15,000 | ₱750 |
| ₱20,000 | ₱1,000 |
| ₱25,000 | ₱1,250 (₱1,000 SS + ₱250 MPF) |
| ₱30,000 | ₱1,500 (₱1,000 SS + ₱500 MPF) |
| ₱35,000+ | ₱1,750 (maximum) |
Your employer also pays their share (roughly double your amount), but this does not reduce your take-home pay.
2. PhilHealth (Philippine Health Insurance Corporation)
Legal basis: Republic Act No. 11223 (Universal Health Care Act of 2019)
PhilHealth provides health insurance coverage for hospitalization, outpatient care, and other medical expenses. The contribution is a flat percentage of your salary.
How it's computed: The 2025 premium rate is 5% of basic monthly salary, split equally:
- Employee share: 2.5% of basic monthly salary
- Employer share: 2.5% of basic monthly salary
The salary floor is ₱10,000 and the ceiling is ₱100,000:
| Monthly Salary | Your Deduction (2.5%) |
|---|---|
| ₱10,000 or below | ₱250 (minimum) |
| ₱20,000 | ₱500 |
| ₱25,000 | ₱625 |
| ₱50,000 | ₱1,250 |
| ₱100,000+ | ₱2,500 (maximum) |
3. Pag-IBIG (Home Development Mutual Fund / HDMF)
Legal basis: Republic Act No. 9679 (Home Development Mutual Fund Law of 2009)
Pag-IBIG is a savings program that also enables members to apply for housing loans and multi-purpose loans. The contribution is relatively small.
How it's computed: For employees earning over ₱1,500/month, the employee share is 2% of monthly salary, capped at a maximum compensation base of ₱10,000:
| Monthly Salary | Your Deduction |
|---|---|
| ₱1,500 or below | 1% of salary |
| Above ₱1,500 | ₱200 (2% of ₱10,000 cap) |
For most employees, the Pag-IBIG deduction is a flat ₱200/month. Your employer matches this with another ₱200.
4. Withholding Tax (BIR)
Legal basis: Republic Act No. 10963 (TRAIN Law), National Internal Revenue Code
Income tax is withheld from your salary by your employer and remitted to the Bureau of Internal Revenue (BIR). The amount depends on your taxable income after deducting SSS, PhilHealth, and Pag-IBIG contributions.
2025 TRAIN Law tax brackets (annual):
| Taxable Income (Annual) | Tax Rate |
|---|---|
| ₱250,000 and below | 0% (exempt) |
| ₱250,001 - ₱400,000 | 15% of excess over ₱250,000 |
| ₱400,001 - ₱800,000 | ₱22,500 + 20% of excess over ₱400,000 |
| ₱800,001 - ₱2,000,000 | ₱102,500 + 25% of excess over ₱800,000 |
| ₱2,000,001 - ₱8,000,000 | ₱402,500 + 30% of excess over ₱2,000,000 |
| Over ₱8,000,000 | ₱2,202,500 + 35% of excess over ₱8,000,000 |
Key point: The first ₱250,000 of annual taxable income (approximately ₱20,833/month) is tax-exempt. This means low-income earners may have zero or very minimal withholding tax.
Complete Example: ₱25,000 Monthly Salary
Here is a breakdown of all deductions for an employee earning ₱25,000/month:
| Deduction | Monthly Amount |
|---|---|
| SSS (EE share) | ₱1,250.00 |
| PhilHealth (EE share) | ₱625.00 |
| Pag-IBIG (EE share) | ₱200.00 |
| Total mandatory contributions | ₱2,075.00 |
| Taxable income (₱25,000 - ₱2,075) | ₱22,925.00 |
| Annual taxable income estimate | ₱275,100.00 |
| Annual tax (15% of excess over ₱250K) | ₱3,765.00 |
| Monthly withholding tax (approx.) | ₱313.75 |
| Total deductions | ₱2,388.75 |
| Estimated take-home pay | ₱22,611.25 |
Note: Actual withholding tax may vary slightly based on the BIR withholding tax table used by your employer and any additional exemptions.
Other Possible Deductions
Beyond the four mandatory deductions, your payslip may also show:
- Loan repayments — SSS salary loan, Pag-IBIG multi-purpose loan, company cash advance (requires your written authorization)
- Union dues — If you are a union member and a CBA is in effect
- Insurance premiums — Group insurance plans (requires your written consent)
- Tardiness/absences — Deductions for unauthorized absences or tardiness beyond the grace period (subject to company policy)
All non-mandatory deductions require your written authorization under Article 113 of the Labor Code.
Related Guides
- Net Pay Calculator — Compute your take-home pay after all deductions
- SSS Contribution Calculator — Look up your exact SSS contribution
- PhilHealth Contribution Calculator — Compute your PhilHealth premium
- Withholding Tax Guide (TRAIN Law) — Detailed tax bracket guide with worked examples
- Can My Employer Deduct From My Salary Without Consent? — Your rights regarding unauthorized deductions
Legal References
- Republic Act No. 11199 (Social Security Act of 2018) — SSS contribution rates
- Republic Act No. 11223 (Universal Health Care Act of 2019) — PhilHealth premium rates
- Republic Act No. 9679 (Home Development Mutual Fund Law of 2009) — Pag-IBIG contribution rates
- Republic Act No. 10963 (TRAIN Law) — Income tax brackets and ₱250,000 exemption threshold
- Labor Code of the Philippines (PD 442, as amended) — Article 113 (restrictions on wage deductions)
This guide is for informational purposes only and does not constitute legal, tax, or financial advice. While we strive for accuracy by citing official Philippine laws and government circulars, regulations change. Consult a qualified professional or the relevant government agency for advice specific to your situation.
Frequently Asked Questions
- How much is deducted from my salary each month?
- For a ₱25,000 monthly salary: SSS ₱1,250, PhilHealth ₱625, Pag-IBIG ₱200, and withholding tax (varies based on your tax bracket). Total mandatory deductions are roughly ₱2,000-₱3,000 before tax, depending on your situation.
- Can my employer deduct other amounts from my salary?
- Under Art. 113 of the Labor Code, employers cannot make deductions from wages without the employee's written consent, except for deductions required by law (government contributions, tax) or authorized by the employee in writing.
- Why is my PhilHealth deduction different from my coworker's?
- PhilHealth is computed as 2.5% of your basic monthly salary (employee share), so it varies with salary level. SSS also varies by salary bracket. Only Pag-IBIG is typically the same (₱200/month for most employees earning over ₱1,500).
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