Starting January 2025, Social Security System (SSS) Philippines increased its contribution rate from 14% to 15%. This is the last tranche of increases mandated under Republic Act No. 11199, or Social Security Act of 2018, aimed at enhancing the long-term sustainability of the SSS fund to continue supporting the members of today and tomorrow.
Split Contribution Rate: Employer vs Employee
The allocation of the contribution between employers and employees changed with the increase to an updated contribution rate of 15%. Employers now have to contribute 10% of the total while employees contribute 5%. In practical terms, for every ₱1,000 earned by an employee, ₱100 goes to the employer and ₱50 to the employee. This structure ensures that both parties play a role in securing the employee’s future benefits.
Generally Increase in Allocation of Monthly Salary Credits (MSP)
Aside from the aforementioned increase in rate, SSS is about to increase its setting on Monthly Salary Credit (MSC) brackets. The lowest MSC has been increased from ₱4,000 to ₱5,000 for a judiciary to a maximum of ₱30,000, now raised to ₱35,000. Such amendments would create a better reflection of the very capacity of members to earn, thus also opening the possibility of payout from increased benefits in later years.
Positive Impact on Life of Fund of SSS
So, changes in contribution rates and adjustment in MSC were projected to increase the life of SSS funds considerably. Supported till now, at least, for 2032, the fund life estimates have now been expected to stretch till 2053. This added life thus ensures that the system will continue to provide services for several decades into the future.
Forecast and Financial Benefits of Collection
At a projection that SSS would be likely to collect an extra 51.5 billion pesos in 2025, 35% of this amount goes into the Mandatory Provident Fund accounts of SSS members, around 18.3 billion pesos. The purpose of this fund is to give members better savings for retirement than their normal SSS benefits.
Responsibilities from Employers and Employees
Employers should deduct correct employee contributions and remit them wholly together with the employers’ share on time to the SSS. If these contributions are not remitted on time, penalties will be galloping, and employees will be deprived of the benefits that they have earned. Employees are, therefore, also enjoined to check the SSS records from time to time to ascertain that their contributions are duly accounted for.
What Next for the SSS?
According to SSS, no more increases are likely given the completion of the contribution hikes under RA 11199 in this most recent increase. The focus of the organization will shift toward enhancing digital services, bettering investment returns, and attaining broader social security coverage to include more Filipinos.