Philippine Labor and Social Legislation Context

In the Philippines, employer obligation to deduct and remit SSS, PhilHealth, and Pag-IBIG contributions is always tied to the existence of compensation actually paid or payable to the employee for the covered period. Where there is no compensation (zero earnings) for a particular month or payroll period, there is no legal obligation for the employer to remit employee or employer shares for any of the three agencies.

This principle is consistent across all three institutions and has been repeatedly affirmed in their respective laws, implementing rules, circulars, and formal opinions.

Legal Basis and Official Position of Each Agency

1. Social Security System (SSS)

Governing Law: Republic Act No. 11199 (Social Security Act of 2018)
Key Provisions:

Section 8(a): “Compensation” means all remuneration for services performed.
Section 18: Contributions are based on the monthly salary credit derived from actual compensation.
SSS Circular No. 2019-008, SSS Circular No. 2020-032, and numerous advisory opinions:
→ When an employee has no compensation for a particular month (leave without pay, suspension without pay, floating status with no pay, AWOL, etc.), both EE and ER shares are zero for that month.
→ The employer is not required to pay or remit anything for that period.
→ The employer must, however, report the employee in the monthly R-3 (or e-R-3 via My.SSS) and indicate the applicable month with zero contribution. Failure to report the employee (even with zero contribution) is punishable under Section 28 of RA 11199.

SSS Official Stand (repeated in employer seminars and written advisories):
“No pay, no contribution.”
The employer has no authority to advance or shoulder the contribution on behalf of the employee when there is no compensation, unless the employer voluntarily treats it as additional pay (which would then create a new contribution base — not recommended).

2. Philippine Health Insurance Corporation (PhilHealth)

Governing Law: Republic Act No. 11223 (Universal Health Care Act) and its IRR
Key Circulars:

PhilHealth Circular No. 2019-0009 (Premium Contribution Schedule)
PhilHealth Circular No. 2020-0014 (Guidelines on Premium Contributions during the COVID-19 Pandemic and Beyond)
PhilHealth Advisory dated May 20, 2020 and subsequent clarifications

Explicit Rule:
Premium contributions of employed members are computed based on the monthly basic salary.
When the monthly basic salary is zero, the premium contribution is zero.
Therefore, the employer is not required to remit any amount for that member for that particular period.

PhilHealth has repeatedly stated in writing:
“Employers are not obliged to pay premium contributions for employees who are on leave without pay or have no earnings for a given period.”

The member remains covered under the National Health Insurance Program by virtue of being a registered member, but no new premium is posted for months with zero contribution.

3. Home Development Mutual Fund (Pag-IBIG Fund)

Governing Law: Republic Act No. 9679 (Pag-IBIG Fund Law of 2009)
Key Guidelines:

Employer Circular No. 426 (Revised Guidelines on Pag-IBIG Contributions)
Pag-IBIG Circular No. 460 (2023 Contribution Rates)

Clear Rule:
Monthly contributions (both employee and employer shares) are based on the employee’s monthly compensation.
When monthly compensation is zero, both shares are zero.

Pag-IBIG has consistently ruled:
“No salary, no contribution required from employer or employee.”
The employer must continue to include the employee in the Monthly Collection List (MCL) or RF-1 with zero amount. Failure to report the member (even with zero contribution) violates the continuing registration obligation under RA 9679.

Common Scenarios Where Employees Have Zero Earnings

Scenario	SSS Position	PhilHealth Position	Pag-IBIG Position	Employer Obligation
Leave Without Pay (LWOP)	No contribution required	No contribution required	No contribution required	Report only, zero remittance
Suspension without pay	No contribution required	No contribution required	No contribution required	Report only, zero remittance
Floating status (no work assignment, no pay)	No contribution required	No contribution required	No contribution required	Report only, zero remittance (note: floating >6 months may be constructive dismissal)
Absences without pay / AWOL	No contribution required	No contribution required	No contribution required	Report only, zero remittance
Strike (legal or illegal)	No contribution required for strike days without pay	Same	Same	Report only
Zero-hour or on-call employees with no hours rendered in the month	No contribution required	No contribution required	No contribution required	Report only
Employee on maternity leave beyond the 105/120 paid days	No contribution required for unpaid extension	Same	Same	Report only

Important Reporting Requirements (Non-Compliance is Penalized)

Even when contributions are zero, employers must continue to report the employees:

SSS → Submit R-3/ML-2 every month showing applicable month with zero amount
Penalty for non-reporting: P5,000–P20,000 per violation + 2% per month penalty on any unreported contributions (if later found due)
PhilHealth → Include in quarterly RF-1 or monthly e-Premier/PMRF with zero premium
Penalty: 2% per month interest on unpaid premiums (when due) + administrative cases
Pag-IBIG → Include in MCF/MCL with zero amount
Penalty: P1,000 per employee per month for non-remittance/non-reporting + criminal liability under RA 9679

Can the Employer Voluntarily Shoulder the Contributions?

Yes, but it is not required and is strongly discouraged by all three agencies because:

It creates taxable compensation income for the employee.
It generates a new contribution base that the employee may later be asked to reimburse.
It may be interpreted as an admission that there was actually compensation.

All three agencies have stated that advancement of contributions during zero-earnings periods is not allowed unless treated as salary (which defeats the purpose).

Employee Option: Voluntary or Self-Employed/OFW Continuation

Employees who wish to avoid gaps in their contribution records (important for SSS maternity, sickness, disability, retirement; Pag-IBIG housing loan eligibility and dividends; PhilHealth benefit availment) may pay voluntarily:

SSS → Register/change to Voluntary or OFW/Self-Employed
PhilHealth → Pay as Direct Contributor (Konsulta or regular)
Pag-IBIG → Continue as Voluntary Member

The employer has no obligation to facilitate or shoulder these voluntary payments.

Summary of the Uniform Rule Across All Three Agencies

When an employee has no earnings for a covered period:

Contribution base = zero
Employee share = zero
Employer share = zero
Remittance required = zero
Reporting required = yes (include with zero amount)
Employer liability for non-remittance = none
Employer liability for non-reporting = exists (fines and possible criminal liability)

This rule has been in force for decades and was reaffirmed during the COVID-19 pandemic through various moratorium and grace-period circulars that explicitly recognized the “no pay, no contribution” principle.

Employers who continue to remit contributions during zero-earnings months are, in effect, overpaying and creating unnecessary tax and audit complications for themselves and their employees.

Final Answer: No. Employers are not legally required — and in fact should not — remit SSS, PhilHealth, or Pag-IBIG contributions (employee or employer shares) when the employee has no earnings for the period concerned. Proper reporting with zero contribution is mandatory; remittance is not.