Philippine payroll deductions are the second half of the payslip. Gross pay is built from basic salary, reviewed time records, and premiums. Deductions then split into amounts the law requires you to withhold when the employee is covered, and amounts the employee or a lawful instrument authorized. Mixing those two families into one “deductions” cell is how a valid SSS line hides an invalid shortage deduction.
This article was last reviewed in September 2026. Contribution figures in the ₱30,000 illustration are based on the latest reviewed official 2025 schedules as of September 2026 and must be re-verified on the SSS, PhilHealth, Pag-IBIG, and BIR sites. Premium rates mentioned for context follow the DOLE / BWC / NWPC 2024 Handbook on Workers’ Statutory Monetary Benefits; editions can change.
TimeBoxHR is designed to support configurable payroll rules, versioned contribution tables, and statutory reports so deductions can be listed rather than buried.
Gross pay first
You cannot deduct your way to a correct net from an incorrect gross. Before any contribution table opens:
- Confirm monthly-paid or daily-paid construction and the documented daily and hourly rates
- Attach the reviewed DTR: absences, paid leave, overtime, rest-day work, holiday type, night hours
- Apply handbook or CBA premiums
How to compute payroll walks that sequence with a ₱30,000 month. How to compute daily and hourly rates and monthly versus daily paid are the conversion articles. This page assumes gross already exists.
A special working day is typically treated as an ordinary working day for pay unless a proclamation or policy says otherwise. That affects gross, not the SSS table.
Mandatory statutory deductions
For covered employees, the usual statutory withholdings are:
- SSS employee share
- PhilHealth employee share
- Pag-IBIG employee share
- BIR withholding tax on compensation
Employer shares (SSS including Employees’ Compensation, PhilHealth, Pag-IBIG) are remitted by the employer. They are not subtracted from the employee’s net pay. Putting the employer SSS amount on the deduction side of the payslip is a presentation error that looks like an extra ₱3,030 taken from the employee.
Coverage is not universal for every worker classification. Confirm current agency rules for the person in front of you. Government rules and contribution schedules may change.
SSS
SSS employee and employer shares follow the compensation-to-monthly-salary-credit table in force for the month. The January 2025 schedule used in this article maps ₱30,000 monthly compensation to MSC ₱30,000: employee ₱1,500, employer ₱3,030 including EC ₱30.
Use the SSS contribution table and how to compute SSS contribution for brackets. Do not interpolate a percentage from memory when the official table is a step schedule.
PhilHealth
This illustration uses a 5% premium on ₱30,000 = ₱1,500, shared ₱750 / ₱750. Confirm the current rate, salary floor, and ceiling on the PhilHealth site before processing. See the PhilHealth contribution table.
Whether the 5% applies to basic only or to a broader compensation definition is an agency-rule question. Do not silently include overtime in the PhilHealth base for one employee and exclude it for another.
Pag-IBIG
Mandatory employee and employer contributions are commonly 2% each of monthly compensation up to a ₱10,000 maximum fund salary. At ₱30,000, the mandatory amounts in this illustration are ₱200 employee and ₱200 employer—not ₱600 each. Voluntary higher savings are a separate election and should be labeled as such. See the Pag-IBIG contribution table and how to compute SSS, PhilHealth, and Pag-IBIG.
BIR withholding tax
Withholding on compensation uses the current BIR table and the taxable base after amounts those rules allow (typically including the statutory employee contributions above, subject to the issuance you are using). This article does not publish a tax peso for ₱30,000 because brackets and issuances change. Open https://www.bir.gov.ph/, apply the table in force for the payroll month, and show tax as its own line.
Semi-monthly payers must decide whether they annualize, use a semi-monthly table, or true-up on the last cutoff. Document the method. Withholding the entire month’s tax on the 15th and again on the 30th is a process error, not a BIR requirement.
Authorized company and agency loan deductions
Labor standards treat many non-statutory deductions as allowed only when the law permits them or the employee authorized them for a lawful purpose. Typical items, when properly documented:
- SSS salary loan, calamity loan, or other SSS collections the agency instructs you to withhold
- Pag-IBIG housing or multipurpose loan amortizations
- Company cash advances and employee loans with written authorization and a remaining balance
- Union dues where a CBA or lawful check-off exists
- Insurance or HMO contributions the employee authorized, if the arrangement is lawful
Typical items that should not appear as a casual deduction:
- Cash shortages or equipment damage without a lawful process
- Uniforms or tools dumped on the payslip because operations is angry
- A “penalty” invented in chat
- A deduction that would take pay below applicable minimum-wage protections without a legally sound basis
This is not a complete legal list. When the deduction is not SSS, PhilHealth, Pag-IBIG, or BIR, ask whether you have a statute, a CBA, or a signed authorization—and whether the amount is still due.
Order of computation: gross to net
Use a sequence you can replay:
- Gross earnings (basic, premiums, other taxable or non-taxable earnings as classified).
- Employee SSS, PhilHealth, Pag-IBIG on the correct contribution bases.
- Taxable compensation after allowable deductions under current BIR rules.
- Withholding tax.
- Other authorized deductions (agency loans, company loans, union dues, and similar).
- Net pay.
Non-taxable earnings (when an issuance treats them as such) should be in gross or a separate earnings bucket but not in the taxable base. Misclassifying a taxable allowance as non-taxable understates tax; the reverse over-withholds. That is a BIR question, not a timekeeping question.
Leave without pay reduces gross, not the deduction list. Paid leave keeps the day in gross. SIL is statutory subject to exceptions; VL and SL are usually company benefits. Encode leave before you invent an extra deduction to “fix” an absence.
Simplify payroll deductions with TimeBoxHR
TimeBoxHR keeps SSS, PhilHealth, and Pag-IBIG contribution tables configurable and versioned, and produces statutory reports for those agencies and the BIR. Configurable payroll rules are how a January 2025 SSS version can sit beside a later circular without rewriting the register by hand. Timekeeping still has to feed a reviewed gross.
Worked slice: ₱30,000 month, statutory employee shares
Reuse the gross from the payroll computation article so the deduction side is not a second invented month: ₱30,477.29 gross after one unpaid absence, two ordinary OT hours, one worked-regular-holiday additional 100%, and three ordinary night hours. Contribution bases in this illustration remain ₱30,000 monthly compensation, not ₱30,477.29. Re-verify that choice against current agency definitions.
| Deduction | Employee amount | Source used in this illustration |
|---|---|---|
| SSS | ₱1,500.00 | Jan 2025 table, MSC ₱30,000 |
| PhilHealth | ₱750.00 | 5% of ₱30,000, half share |
| Pag-IBIG | ₱200.00 | Mandatory at ₱10,000 MFS |
| Statutory subtotal | ₱2,450.00 | Re-verify 2025 schedules |
| BIR withholding | Per current table | Not invented here |
| Example SSS salary loan | ₱1,000.00 | Only if the agency abstract says so |
| Illustrative deductions if loan exists | ₱3,450.00 + tax |
Subtotal after statutory contributions only: ₱30,477.29 − ₱2,450.00 = ₱28,027.29, then tax, then the ₱1,000 loan if authorized.
Employer remittance on the same illustration (not a net-pay deduction): SSS ₱3,030 including EC ₱30, PhilHealth ₱750, Pag-IBIG ₱200, total ₱3,980, plus the employer’s withholding-tax remittance of whatever was withheld.
These contribution figures are based on the latest reviewed official 2025 schedules as of September 2026 and must be re-verified.
Payslip and register presentation
Show, at minimum:
- Gross components (basic, absence, OT, holiday, night, other earnings)
- Each statutory employee share
- Withholding tax
- Each loan or other authorized deduction, named
- Net pay
Do not combine SSS + PhilHealth + Pag-IBIG into “government.” Employees cannot check a ₱2,450 blob against three official tables. Do not fold a company loan into “adjustments.”
Statutory reports for SSS, PhilHealth, Pag-IBIG, and BIR should tie back to the same register. If the SSS collection report and the payslip SSS line disagree, the deduction was never controlled.
A payroll system for the Philippines is doing its job when a reviewer can open one employee and reproduce net from the DTR and the tables. How timekeeping improves payroll still applies: you cannot deduct correctly from hours you never classified. Overtime and holiday stacks remain in overtime and holiday pay; they change gross, which then changes nothing on Pag-IBIG mandatory ₱200 if you are already at the ₱10,000 maximum fund salary—and may change SSS if compensation used for MSC includes those premiums. Know which base you configured.
Common deduction errors
- Withholding employer SSS from the employee
- Charging Pag-IBIG at 2% of ₱30,000 instead of the mandatory MFS cap
- Using a stale SSS table after a January effectivity date
- Double-taking full-month contributions on both semi-monthly payslips
- Computing tax on gross before SSS, PhilHealth, and Pag-IBIG when the current BIR rule deducts them first
- Continuing a loan for months after the abstract says zero
- Deducting a shortage without a file
- Naming a deduction “misc” so it cannot be audited
- Applying statutory tables to an employee who is not covered, or skipping them for someone who is
Minimum-wage employees and special groups can have different withholding or coverage outcomes. Confirm current rules rather than copying the ₱30,000 illustration downward.
How TimeBoxHR Handles This
TimeBoxHR builds deductions after timekeeping: DTR scanning or geofenced mobile attendance, leave requests that flow into DTR and payroll, holiday calendars by branch or location, and overtime requests with configurable statutory pay including night differential and holiday premiums.
SSS, PhilHealth, and Pag-IBIG contribution tables are configurable and versioned so official schedule changes can be loaded as new versions. Statutory reports for SSS, PhilHealth, Pag-IBIG, and BIR are part of payroll. TimeBoxHR is designed to support configurable payroll rules. It will not invent authorization for a company loan, and it will not replace a reading of the current agency circular.
Re-verify every government figure before the next cutoff. The ₱1,500 / ₱750 / ₱200 employee split in this article is a September 2026 review of 2025 schedules, not a promise those pesos will still be correct when you run payroll.
