Employer Liability for Failure to Remit SSS Contributions (Philippines): A Complete Legal & Practical Guide

For finance/HR, business owners, accountants, and employees who need the “what, why, and how” on SSS remittance lapses—legal exposure, penalties, enforcement, and clean-up steps.

1) What the law requires (obligations at a glance)

Coverage & registration. Employers must register themselves and their employees with the Social Security System (SSS) and keep member records updated upon hiring (no “wait-and-see” or probation exceptions for coverage).
Withhold & remit, on time. Employers must withhold the employee share and pay the employer share, then remit the full amount (both shares) to SSS on or before the SSS-prescribed monthly due date.
Report new hires & changes. Timely filing of employment reports, salary changes, and separation notices is mandatory.
No excuses bucket. Cash-flow issues, bank outages, or client non-payment do not excuse missing the statutory deadline; at most they support a payment plan, not a defense.

The governing statute is the Social Security Act (as amended, most recently by R.A. 11199). It strengthened penalties and enforcement versus delinquent employers.

2) What counts as a violation

Failure to register the company and/or employees with SSS.
Failure to remit contributions on time (late or missed months).
Deducting the employee’s share but not remitting it (most serious—treated as misappropriation).
Under-reporting compensation to shrink contributions.
Failure to submit reports (hiring/separation/salary).
Misclassifying employees as contractors to avoid contributions.

Each is independently actionable; doing several at once compounds penalties.

3) Liability map: civil, administrative, criminal

A) Civil & administrative exposure (money and measures)

Principal contributions due (employer + employee shares) for all months in arrears.
Penalties/interest: by law, monthly penalties accrue on unpaid contributions from due date until fully paid (R.A. 11199 set the statutory penalty at 2% per month; earlier laws were higher). No cap until satisfaction, unless a condonation/penalty relief program applies.
Collection & enforcement: SSS may issue demand assessments, garnish bank accounts, and levy/seize property after due process. It may also close or enjoin operations through appropriate actions if the employer persists in violating the law.
Clearances & permits: Delinquencies can block SSS clearance, which many LGUs and government agencies require for business permits, accreditations, and bids.

B) Personal liability of officers

The responsible corporate officers (e.g., president, managing partner, GM, HR/finance heads who control payroll remittances) may be held personally and solidarily liable for unremitted contributions and may face criminal prosecution.

C) Criminal liability (when things turn penal)

Failure or refusal to remit SSS contributions—especially where the employee share was deducted—is a criminal offense under the SSS law, punishable by fine (commonly in the ₱5,000–₱20,000 range) and/or imprisonment (commonly 6 years and 1 day up to 12 years).
Separate crimes under the Revised Penal Code (e.g., estafa/misappropriation, falsification) may also apply where facts fit (e.g., issuing fake remittance confirmations, forging SSS receipts).

Key risk: Deducting from the employee then keeping the money is treated as conversion—expect criminal filing, not just a billing letter.

4) Who else can be on the hook (joint liability)

Principal–contractor setups. If you use third-party contractors, the principal can be held jointly and severally liable with the contractor for statutory benefits of the contractor’s employees (including SSS), especially in labor-only contracting scenarios. Keep vendor SSS compliance proofs on file.

5) Effect on employees (benefits & stop-gaps)

Employees remain covered. As a matter of social policy, employees should not be prejudiced by employer delinquency. SSS can recognize coverage and pursue the employer for the money.
But… unposted months can delay claims (sickness/maternity/retirement/loans) until SSS reconciles records.
Practical fix: Employees can file a complaint with SSS and present payslips/HR certifications showing payroll deductions; SSS then assesses and pursues the employer while facilitating benefits where possible.

6) Prescription (how far back SSS can go)

Civil collection of contributions typically carries a long prescriptive period (commonly up to 20 years from the time the cause of action accrued or was discovered).
Criminal cases follow their own prescriptive rules, but the clock pauses while the offender is absent or cannot be served.
Do not assume “old” delinquencies are safe; SSS routinely collects multi-year arrears.

7) Typical SSS enforcement sequence (for employers)

Demand / Statement of Account (SOA). Specifies months, amounts, and penalties.
Conference / Reconciliation. Employer submits payroll proofs; SSS computes final liability.
Final Demand / Warrant-type remedies. If unpaid, SSS may move to garnish or levy after due process.
Criminal referral. Particularly where deductions were taken but not remitted, or refusal is willful.

8) Clean-up roadmap for delinquent employers

Do this immediately; every month adds penalty.

Internal audit. Match payroll vs SSS posted records by employee/month; list gaps.
Stop the bleeding. Resume current remittances first (current compliance tempers enforcement), then work backward.
Self-report & reconcile with SSS. Bring payroll registers, proof of deductions, and any prior partial payments.
Negotiate a payment plan. SSS may allow installment payment agreements for principal/penalties; keep to schedule.
Watch for condonation windows. SSS occasionally offers penalty condonation/relief programs (you must still pay principal and often interest).
Officer sign-off & controls. Adopt written cut-off calendars, dual approvals, and bank auto-debit to prevent relapse; assign a compliance owner.
Vendor chain check. Collect SSS compliance certificates from contractors quarterly; stop using non-compliant vendors.

9) Employee playbook (if your employer isn’t remitting)

Check your SSS posting (My.SSS or branch printout).
Gather proof: payslips with SSS deductions, employment contract/ID, HR emails.
Write HR/Payroll: request posting/remittance within a fixed date; attach proofs.
File with SSS if unresolved: ask SSS to assess the employer for the unremitted months; include your documents.
Parallel options:
- DOLE/NLRC if wage deductions were unlawful or there are broader money claims;
- Criminal complaint (through SSS/legal or prosecutors) where deductions were taken but not remitted.
Proceed with your benefit claim (sickness/maternity/retirement); SSS can often process while it pursues your employer.

Short demand template (employee → HR/Payroll)

Subject: Unremitted SSS Deductions – [Your Name / Months] Dear HR/Payroll, My SSS contributions for [months] are unposted despite payroll deductions (see attached payslips). Kindly remit/post and confirm by [date]. If unresolved, I will seek SSS intervention. Thank you.

10) Computation example (how penalties bite)

Assume an employee’s combined monthly SSS contribution (EE+ER) is ₱2,000. The employer missed 6 months, due on the 10th of each succeeding month. Statutory penalty = 2% per month on each missed month from its due date.

Month 1 delinquency ages 6 months → penalty ≈ ₱2,000 × 2% × 6 = ₱240
Month 2 ages 5 months → ₱200
Month 3 ages 4 months → ₱160
Month 4 ages 3 months → ₱120
Month 5 ages 2 months → ₱80
Month 6 ages 1 month → ₱40

Total principal: ₱12,000 Total penalties (illustrative): ₱840 Payable (excluding any interest/fees): ₱12,840

In practice SSS computes per employee, per month, adds any interest/fees, and updates the running total until full payment.

11) Defenses (what doesn’t work—and what sometimes does)

Doesn’t work: “Cash-flow problem,” “client delayed us,” “bank was down,” “employee resigned,” or “we plan to remit later.”
Sometimes works (to mitigate, not erase):
- Good-faith error with immediate cure (e.g., payroll migration glitch corrected swiftly);
- Documented disaster affecting records (with rapid reconstruction and payment);
- Proof of actual remittance misapplied to a wrong ER number (SSS can re-allocate).
Never a defense: Deducting the employee share and keeping it.

12) Collateral consequences for employers

Government deals at risk: difficulty obtaining LGU permits, government bidding eligibility, and project clearances without SSS compliance proofs.
Loans/financing: banks often require SSS compliance certifications.
Reputational & HR risk: employee complaints to SSS/DOLE, attrition, and criminal exposure for officers.

13) Compliance checklist (employers)

Company & all sites registered with SSS (ER IDs reflected correctly)
All employees registered; new hires filed immediately
Cut-off calendar mapping payroll to SSS due dates (with buffer)
Dual-control approvals for remittances; e-payment enrolled
Monthly reconciliation: payroll vs SSS posted contributions
Contractor SSS proofs on file (quarterly)
Escalation SOP if any month slips (same-day catch-up)
Designated compliance owner (and backup) with KPIs

14) Quick FAQ

Is a payment plan an admission of guilt? No—it’s a compliance tool. It won’t erase prior liability, but it halts escalation and reduces criminal risk if you keep to it.

Can SSS go after me personally if I’m “just” the accountant? If you control or sign off on remittances, you can be named a responsible officer. Keep written escalations when cash constraints threaten compliance.

We under-reported salaries before. How do we fix it? File amended reports and pay the difference + penalties. Under-reporting is treated as a willful violation if left uncorrected.

We’re a small shop—do the same rules apply? Yes. All employers, even micro-enterprises and household employers, must comply.

15) Bottom line

Remit on time, every time. The employee share is trust money; keeping it invites criminal liability.
Penalties snowball monthly; delaying “to catch up later” is the costliest choice.
If delinquent, self-reconcile, resume current payments, and agree a plan with SSS—then do not miss again.
Employees should speak up early—SSS can post or credit service and chase the employer so benefits aren’t derailed.

This guide is general information, not legal advice. For significant arrears (multi-year, many employees, or officer exposure), consult counsel to structure repayment, manage criminal risk, and align payroll/controls to prevent recurrence.