What are payroll taxes in Philippines?
- Similar to social security in the United States, the Philippines has a social security system which is a mandatory employee benefit. The Philippines Social Security System consists of the following:
- Social Security System (SSS): the SSS was created to provide private employees and their families with protection against disability, sickness, old age, and death. All persons under the age of 60 who earn income from employment of more than P1,000 per month are required to contribute to the SSS. Employee contributions for social security are deducted from employee’s salary payments. These are withheld by the employer on a monthly basis.
- Home Development Mutual Fund (HDMF): the HMDF is a provident savings system providing housing loans to private and Philippine government employees, and to self-employed persons who elect to join the Fund.
- Philippine Health Insurance Corporation (PhilHealth): PhilHealth is administered by the Philippine National Health Corporation, which is designed to provide employees with a practical means of paying for adequate medical care in the Philippines.
- Employers in the Philippines are required to make contributions to the above funds. The current monthly SSS contribution rate as of 2020 is maximum of PHP 1,630 from the employer and PHP 800 from the employee.
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