MANILA - The Social Security System (SSS) has begun implementing the hike in contributions from members, the state-run pension fund said on Thursday.
SSS said that the contribution rate will now be 14 percent, up from 13 percent last year.
“Under the new contribution rate, employers will shoulder the one percent increase, which means their contribution will now be at 9.5 percent. The remaining 4.5 percent will be deducted from the employee,” SSS said in a statement.
The state-run pension fund said the hike was based on the provisions of Republic Act of RA 11199, which mandated higher contributions to ensure the financial viability of the fund.
SSS President and Chief Executive Officer Rolando Ledesma Macasaet meanwhile noted that under existing 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,” Macasaet explained.
Business groups earlier urged the SSS to suspend the increase in SSS contributions citing inflation.
SSS however rejected the call saying this would reduce the actuarial life of the fund.