SSS Contribution 15% Rate Hike Takes Effect: What It Means for Filipinos

•  SSS Implements 15% Contribution Rate, Impacting Businesses and Workers

• SSS Contribution Rate Increase: What You Need to Know

• Understanding the New SSS Contribution Rate and its Implications

 

The Social Security System (SSS) has ushered in the new year with an increase in its monthly contribution rate, a move that will impact both Filipino households and the local business sector.  Starting January 1, 2025, the state-run social insurance and pension fund implemented a 15 percent contribution rate for its members, up from 14 percent in 2023.  

This adjustment is mandated by Republic Act 11199, also known as the Social Security Act of 2018. The law stipulates a gradual increase in the contribution rate every two years, culminating in the final increase this year. This phased approach began in 2019 with a 12 percent contribution rate, which rose to 13 percent in 2021 and 14 percent in 2023.  

"This higher rate is essential to ensure the long-term sustainability of the SSS and its ability to provide social security benefits to its members," explained Carlo Villacorta, SSS Head for Public Affairs and Special Events Division.

The 15 percent contribution rate will be shared between employers and employees, with employers shouldering 10 percent and employees contributing the remaining 5 percent.  This shared responsibility aims to balance the financial burden while ensuring the SSS remains adequately funded.  

Key Changes and Implications:

•     Increased deductions: Employees will see a slight decrease in their take-home pay due to the higher contribution rate. Employers will also face increased expenses for their employees' SSS contributions.   
• Mandatory Provident Fund (MPF): Contributions to Monthly Salary Credits (MSCs) ranging from P20,000 to P35,000 will be allocated to the MPF program. This program allows members to accumulate additional savings for their retirement, with benefits calculated based on total contributions and investment income.  
•     Ensuring compliance: 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.

While the increase may pose short-term financial adjustments for both individuals and businesses, it is a crucial step towards strengthening the SSS and ensuring its capacity to provide social security protection for current and future generations of Filipinos. The SSS encourages its members to stay informed about these changes and plan their finances accordingly.