On Thursday, the Social Security System (SSS) began implementing the increase in contributions from its members.
The contribution rate is now at 14% compared to 2022’s 13%. The state-run pension fund clarified that the 1% increase will be shouldered by employers, upping their contribution to 9.5%. Employees will continue to take on the remaining 4.5%.
SSS President and Chief Executive Officer Rolando Macaset said that under tax laws, “employers would be allowed to deduct their share of the contribution hike from their taxable income.”
“This underscores a whole-of-nation approach in securing the future of our workers with the Philippine government also contributing in the form of tax relief to employers,” he said.
The implemented hike is in accordance with the Social Security Act of 2018, which mandated a contribution increase “to ensure the financial viability of the state pension fund for private sector workers.”
Business groups asked SSS to suspend the Social Security Act of 2018. SSS countered that delaying the implementation would “reduce the actuarial life of the fund.”