Philippine Labor Law Glossary
Definition: The Pag-IBIG contribution is the mandatory monthly payment to the Home Development Mutual Fund under Republic Act No. 9679, shared between employee and employer. Since February 2024 the salary base used in the computation is capped at ₱10,000, making the standard maximum ₱200 from the employee and ₱200 from the employer.
Sa Filipino · Filipino Explanation
Ano ang Pag-IBIG Contribution?
Ang Pag-IBIG contribution ay ang buwanang hulog sa Home Development Mutual Fund. Sapilitan ito sa lahat ng empleyadong sakop ng SSS o GSIS. May bahagi ang empleyado at may bahagi ang employer — magkaiba ang dalawa.
Simula Pebrero 2024, ang pinakamataas na sahod na ginagamit sa pagkuwenta ay ₱10,000 — kaya ₱200 ang karaniwang maximum na kaltas sa empleyado, at ₱200 naman ang counterpart ng employer. Dalawang bagay na dapat malaman: bawal ikaltas sa sahod mo ang share ng employer, at kahit hindi nag-remit ang employer, hindi mawawala ang karapatan mo sa benepisyo — may pananagutan ang employer, hindi ikaw.
Full Guide
Need the computation, remittance deadlines, penalties and employer duties? Read Pag-IBIG Contribution Philippines: Rates, Deadlines and Employer Duties.
Who Is Covered
Section 6 of Republic Act No. 9679 makes coverage automatic rather than optional: “Coverage in the Fund shall be mandatory upon: (a) all employees covered by the SSS and the GSIS, and their respective employers.”
There is no minimum service period and no waiver. If an employee is covered by SSS or GSIS, Pag-IBIG coverage follows, and the employer’s obligation to register and remit attaches with it.
The Statutory Rates
Section 7 sets the rates directly:
- Employees earning not more than ₱1,500 per month — one percent (1%)
- Employees earning more than ₱1,500 per month — two percent (2%)
- All employers — two percent (2%) of the monthly compensation of all covered employees
Note the asymmetry. The employee rate steps up at the ₱1,500 line; the employer rate is a flat 2% regardless of what the employee earns. An employee earning ₱1,500 or less therefore contributes 1% while the employer still contributes 2% on the same figure.
The Salary Cap and Why It Changed Without a New Law
Section 7 closes with a ceiling and a delegation: the maximum monthly compensation used in computing contributions “shall not be more than Five thousand pesos (₱5,000.00): Provided, That this maximum may be fixed from time to time by the Board of Trustees through rules and regulations adopted by it, taking into consideration actuarial calculations and rates of benefits.”
That proviso is why the operative figure differs from the one printed in the statute. HDMF Circular No. 460, signed 15 January 2024 and effective February 2024, raised the Maximum Fund Salary from ₱5,000 to ₱10,000. The Department of Budget and Management independently confirmed the change in Circular Letter No. 2024-2 dated 1 February 2024, noting that the maximum fund salary “was increased from P5,000 to P10,000 per month,” producing a contribution “equivalent to P200 per month per employee.”
So the current standard maximum is ₱200 employee + ₱200 employer = ₱400 per month. Anyone reading only Republic Act No. 9679 would compute ₱100 + ₱100 and be two years out of date. Figures stated as of August 2026 — check the latest HDMF circular before relying on them, since the Board can move the ceiling again without a statutory amendment.
The Employer Cannot Pass On Its Own Share
Section 7 is explicit that “an employer shall not deduct, directly or indirectly, from the compensation of its employees… the employer’s contribution.” A payslip showing ₱400 deducted from the employee for Pag-IBIG is on its face wrong: the employee’s share is the only part that may lawfully be withheld from wages.
Remittance Deadlines
HDMF Circular No. 275, issued 22 January 2010, keys the remittance deadline to the first letter of the employer’s name rather than to a single date for everyone:
| First letter of employer name | Remittance period |
|---|---|
| A to D | 10th to 14th day of the month |
| E to L | 15th to 19th day of the month |
| M to Q | 20th to 24th day of the month |
| R to Z and numerals | 25th day to the end of the month |
What Delinquency Costs
Two penalty measures appear in the sources and they should not be conflated. Section 23(b) of Republic Act No. 9679 fixes a penalty of “three percent (3%) per month” on unremitted contributions. HDMF Circular No. 275 expresses the same exposure operationally as “1/10 of 1% per day of delay.”
Circular No. 275 adds a consequence employers frequently overlook: an employer that deducted the employee’s share but failed to remit it is liable for the contributions “including all applicable interests and penalties, as well as the dividends that the contributions could have earned.” The employee is made whole for investment growth foregone, not merely for the principal.
Under Section 23(e), unpaid contributions are collectible “in the same manner as taxes… under the National Internal Revenue Code,” and an action may be brought within twenty years from the time the delinquency is known.
Criminal Exposure
Section 25 provides a fine “not less than, but not more than twice, the amount involved or imprisonment of not more than six (6) years, or both.” Where the offender is a corporation, “the penalty shall be imposed upon the members of the governing board and the president or general manager” — liability reaches named individuals, not just the company.
Non-Remittance Does Not Cost the Employee the Benefit
This is the provision every employee should know. Section 23(d): “Failure or refusal of the employer to pay or to remit the contributions herein prescribed shall not prejudice the right of the covered employee to the benefits under this Act.”
The employee’s entitlement is not contingent on the employer having actually paid. The remedy runs against the employer, and the member’s benefits stand.
Legal Basis
| Authority | Classification | Rule supported | Official source |
|---|---|---|---|
| Republic Act No. 9679, Section 6 | Statute | Makes Fund coverage mandatory on all employees covered by SSS and GSIS and their employers. | Official text |
| Republic Act No. 9679, Section 7 | Statute | Sets the 1% / 2% employee rates and the flat 2% employer rate, the ₱5,000 statutory ceiling with Board authority to adjust it, and the bar on deducting the employer share from wages. | Official text |
| HDMF Circular No. 460 (15 January 2024, effective February 2024) | Implementing circular | Raises the Maximum Fund Salary from ₱5,000 to ₱10,000, making the maximum ₱200 employee and ₱200 employer. | Confirmed in DBM Circular Letter No. 2024-2 |
| HDMF Circular No. 275 (22 January 2010) | Implementing circular | Sets the remittance schedule by first letter of the employer’s name, the 1/10 of 1% per day penalty, and liability for dividends the contributions could have earned. | Issued under Republic Act No. 9679 |
| Republic Act No. 9679, Sections 23 and 25 | Statute | Duty to remit, 3% per month penalty, tax-style collection within twenty years, criminal penalties reaching corporate officers, and preservation of employee benefits despite non-remittance. | Official text |
Practical Examples
Employee earning ₱35,000: The salary base is capped at ₱10,000. Employee share is 2% of ₱10,000 = ₱200; employer share is 2% of ₱10,000 = ₱200.
Employee earning ₱8,000: Below the cap, so the actual salary is used. Employee share 2% = ₱160; employer share 2% = ₱160.
Employee earning ₱1,400: The lower band applies to the employee only. Employee share 1% = ₱14; employer share is still 2% = ₱28.
Common Misunderstandings
Misunderstanding: The maximum Pag-IBIG contribution is ₱100 because Republic Act No. 9679 caps the salary base at ₱5,000.
Correct approach: The statute permits the Board of Trustees to move that ceiling, and Circular No. 460 did so in February 2024. The operative Maximum Fund Salary is ₱10,000 and the standard maximum employee share is ₱200.
Misunderstanding: If the employer never remitted, the employee loses the contributions and the benefits attached to them.
Correct approach: Section 23(d) preserves the employee’s right to benefits regardless. The employer bears the contributions, interest, penalties and the dividends the money would have earned.
Common Questions
Can I contribute more than the maximum?
Yes. The ₱200 figure is the maximum mandatory employee share based on the capped salary. Members may contribute above it voluntarily, though the employer’s counterpart obligation remains fixed at the statutory computation.
Is Pag-IBIG deducted from the 13th month pay?
Contributions are computed on monthly compensation. Whether a particular pay component forms part of that base is determined by HDMF rules; where an employee is already at the ₱10,000 cap the question is academic, since the contribution is already at its maximum.
How do I check whether my employer is actually remitting?
Members can verify posted contributions through their Pag-IBIG membership record. A gap between what appears on the payslip and what is posted to the record is the practical trigger for raising the matter with the employer or with the Fund.
Sources and Legal Citations
- Republic Act No. 9679, the Home Development Mutual Fund Law of 2009, Sections 6, 7, 23 and 25, official text. Classification: statute.
- HDMF Circular No. 460, signed 15 January 2024, effective February 2024, raising the Maximum Fund Salary to ₱10,000. Classification: implementing circular.
- Department of Budget and Management, Circular Letter No. 2024-2, 1 February 2024, official text, confirming the increase from ₱5,000 to ₱10,000 and the resulting ₱200 monthly figure. Classification: government circular.
- HDMF Circular No. 275, 22 January 2010, on remittance schedules, penalties for delay and liability for foregone dividends. Classification: implementing circular.
Disclaimer
This glossary entry is for general educational and legal-information purposes and is not legal advice. Contribution ceilings are set by the HDMF Board of Trustees and change without amendment to the statute; confirm the current circular before applying the figures above.