Employee Benefits
Employee Benefits are the indirect and non-cash compensation paid by an employer to employees besides their regular pay.
When your company employs individuals, they are entitled to various benefits in the Philippines, as mandated by the government, like holidays, overtime, and leave benefits.
Some benefits mandated by law are SSS, Pag-IBIG, and Philhealth.
The above benefits vary from firm to firm or industry to industry.
Types of employee benefits:
The employee benefits may include wage and compensation benefits, service incentive leave, holidays or overtime, 13th-month pay, medical insurance, and retirement benefits.
We summarize the mandatory benefits and provisions for employees in the Philippines under the Labor Code and special laws:
| NCR | P537 (Effective November 22, 2018) |
| CAR | P300 — P320 |
| Region I | P256 — P310 |
| Region II | P340 |
| Region III | P393 — P400 (P339 in Aurora) |
| Region IV-A | GCA: P325.50 — P400 EGA: P317.50 — P344 RBA: P317 — P327 |
| Region IV-B | Establishments with 10 workers or above: P290 Establishments with less than 10 workers: P247 |
| Region V | Upon effectivity: P305 (for establishments with 10 or more employees) P295 (for establishments with less than 10 employees) |
| Region VI | P365 |
| Region VII | P366 |
| Region VIII | P305 |
| Region IX | P316 |
| Region X | WCI — P338.00 WCII — P331.00 WCIII — P323.00 WCIV — P304.00 |
| Region XI | Upon effectivity: P370 |
| Region XII | P311 |
| Region XIII | P305 |
| ARMM | P280 |
OVERTIME
The overtime wage depends on the service rendered by the employee beyond the schedule stated in the contract.
The compensation paid is equivalent to their regular wage, including a 25% premium.
The overtime pay does not include the mandatory lunch break in the 8-hour workday.
Overtime rates vary depending on work time, like a regular workday, holiday, rest day, and night shift.
For the regular workday, the overtime pay is plus 25% of the hourly pay rate, plus 20% on a rest day, regular or special holiday.
PREMIUM PAY
Generally, the Premium pay is provided on non-working days (rest days/special holidays) like the last day of the year, All Saints’ Day, and Ninoy Aquino day.
The premium rates are entitled to
- Additional 30% of an employee’s daily basic rate on a rest day/special holiday.
- Additional 50% of an employee’s daily basic rate on a special holiday.
- Additional 30% of the regular holiday on an employee’s rest day.
Usually, the premium pay applies to employees covered by the holiday-pay rule.
13th-month pay is an additional compensation given to employees in the Philippines, typically in December.
It’s a compulsory benefit given to employees under Presidential Decree No. 851.
Rank-and-file employees can receive their 13th-month who have worked for at least one month in a company.
Suppose a company hired an employee at the end of the year; an employee can receive at least 1/12th of their basic salary within a year.
Basic 13th Month Pay Formula:
Monthly Basic Salary x 12 months ÷ 12 months
For example, if your basic monthly salary is PHP 30,000, and you started working for your company last June, your 13th month computation should look like this:
(PHP 30,000 x 6 months) ÷ 12 months = PHP 15,000
HOLIDAY PAY
The Labor Code requires the remuneration of an employee’s daily basic wage for all non-working regular holidays. There are 12 regular and 3 special non-working holidays in the Philippines.
12 regular holidays as of (Republic Act No. 9849):
- New Year’s day
- Maundy Thursday
- Araw ng Kagitingan
- Labour Day
- Rizal Day
- Good Friday
- Independence Day
- National Heroes’ Day
- Eid al-Fitr
- Eid Adha
- Bonifacio Day, and
- Christmas.
NIGHT-SHIFT DIFFERENTIAL
Night shift differential (NSD) or night shift pay applies to employee for work done between the hours of 10pm to 6am.
An additional 10% applies to the regular wage for every hour at work.
Service Incentive Leave
An employee who has worked for a year can get five Service Incentives Leave for a year as per article 95 of the labor code.
An employee can use SIL for vacation or sick leave.
Parental Leave
Parental leave is of three types:
- Paternal: As per the Paternity leave act of 1996, seven days of paternal leave is granted to the married fathers, effective up to the first four deliveries of the legitimate spouse.
- Maternal: A company where any pregnant woman employee who has worked for at least six months can get full pay as her regular salary and:
- At least two weeks (before the due date), and
- Four weeks (after the delivery or miscarriage).
The new mothers can also extend the maternal leave to 30 days unpaid leave.
3. Solo-Parent Leave
Besides parental leave, the Philippines labor code drew a special leave for solo-parent employees, as described in the Solo Parents Welfare, Republic Act No. 8972.
The solo-parent must have been working for a year in a company to get this leave that allows them to leave for seven days.
Special Leave Benefits for Women
The special leave benefits for women are of two types:
- As per the Anti-Violence Against Women and Their Children Act of 2004, leave for women and their children who are the victims of violence gets ten days of leave with full pay.
- Magna Carta for Women – as per the Magna Carta of Women, women who underwent surgery because of gynecological disorders get two months’ leave with full pay. Given that she has rendered at least six months of service.
Bereavement Leave
Bereavement leave is unpaid three days’ additional time off from work entitled to an employee to grieve for the demise of their immediate family members.
De Minimis Benefits
De Minimis benefits are leave credits or small amounts of money granted to the employees in situations like:
- calamity leaves
- daily meal allowance
- transportation
- clothing allowance and
- other non-monetary goods.
SSS
The Social Security System is a social insurance program created to provide private employees and their families’ protection against sickness, disability, maternity, retirement, old age, death, and funeral.
Usually, the SSS contribution is a shared payment between the employer and employee.
The SSS contribution is 11% of an employee’s monthly salary; however, that varies depending on an employee’s monthly salary.
The employer must shoulder about 7.4% of the total 11% contribution, and the employee’s shoulders the rest 3.7%.
Suppose an employee earns ₱31,253.332 monthly; the maximum monthly salary credit is ₱16,000.
The employer shoulder about ₱1,178.70, and the employee shoulder ₱581.30 deducted from the monthly salary.
PhilHealth
PhilHealth is a health insurance program that implements the National Health Insurance Program for private employees.
It provides health care privileges and financial assistance such as hospital costs, medicine, subsidy for room and boarding, and professional service.
The PhilHealth payment is shoulder by both the employer and employee.
The employer shoulders half of the contribution, whereas the employee shoulders the remaining 50%, which is deducted monthly from the employee’s salary.
Pag-IBIG
Pag-IBIG (Pagtutulungan sa kinabukasan: Ikaw, Bangko, Industriya, Gobyerno) or HDMF (The Home Development Mutual Fund).
It is a national savings program established to provide affordable house financing for Filipinos, multi-purpose loans, calamity loans, and secured savings.
Both the employer and the employee share the payments for this program.
The monthly contribution for the pag-IBIG fund is ₱200.
An amount of ₱100 is shoulder by the employer, and the remaining ₱100 by an employee, deducted from the monthly salary.
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