Payslip Requirements and Government Contribution Compliance Philippines

Payslip Requirements & Government-Contribution Compliance in the Philippines

(Comprehensive legal overview as of 8 July 2025)


1. Governing Laws & Issuances

Area Principal Authority Key Statutes / Regulations
Payslip issuance Labor Code (Art. 103), DOLE Dept. Order (DO) No. 11-92 §6, DO No. 20-93; reiterated in Labor Advisory No. 11-2014 & Labor Advisory 11-2020 (electronic payslips)
Mandatory deductions & remittances Republic Acts: RA 11199 (SSS Act of 2018), RA 11210 & RA 1161 (Social Security Act), RA 7875 & RA 11223 (PhilHealth), RA 9679 (Pag-IBIG Fund), NIRC 1997 (withholding tax)
Record-keeping Art. 109 Labor Code; BIR RR No. 2-2015 (books retention); Data Privacy Act of 2012
Administrative sanctions DOLE’s Visitorial & Enforcement Power (Art. 128 Labor Code); SSS & PhilHealth charter penalties; Pag-IBIG Circulars; BIR penalties

Note: Local ordinances (e.g., Manila City Ordinance No. 7857) may add clerical rules but cannot diminish national minimum standards.


2. Payslip Content: Minimum Mandatory Fields

DOLE expects payslips to be understandable, itemized, and issued every pay period (weekly/semi-monthly/monthly). The template (paper or electronic) must show at least:

  1. Employee Identifiers

    • Full name & signature / acknowledgment field
    • Employee or payroll number
  2. Work & Pay Details

    • Pay period covered (start–end date)
    • Basic rate (hourly/daily/monthly) & employment status
    • Actual days/hours worked, overtime, night-shift, rest-day or holiday premiums
    • Leave with pay (type and days)
  3. Earnings Itemization

    • Basic wage
    • COLA / wage distortion adjustments
    • 13th-month accrual or pro-rated amounts (if advanced)
    • Incentives, allowances, commissions, service charges (for hotels & restaurants, RA 11360)
  4. Mandatory Statutory Deductions

    Scheme Employee Share (typical) Employer Share Remittance Due*
    SSS (regular) 4.5 % to 5 % 8.5 % to 9.5 % on or before
    15th, 31st of month following applicable month
    WISP/WISP Plus fixed ₱650 (if applicable) ₱650 bundled with SSS submissions
    PhilHealth 2.25 % (year 2025 ceiling ₱90,000 salary base) 2.25 % 11th–15th of the month following
    Pag-IBIG 1 % (≤₱1,500) or 2 % (>₱1,500) 2 % 10th day of the following month
    Withholding Tax based on BIR table (TRAIN Law) 10th/15th or last day of following month; quarterly & annual Alphalists

    Deadlines reflect SSS Circular 2022-033, PhilHealth Circular 2020-0005, Pag-IBIG Circular 448, and BIR RR 11-2018.

  5. Other Deductions (must have written employee authorization & comply with Art. 113 Labor Code): loans, salary advances, union dues, canteen charges, cooperative contributions, etc.

  6. Net Pay & Mode of Payment (cash, check, or payroll credit)

  7. Employer Details

    • Registered business name, address, TIN
    • SSS/PhilHealth/Pag-IBIG employer numbers

3. Electronic Payslips & Data Privacy

  • Legality. DOLE Labor Advisory 11-2020 allows soft copies (PDF/email/web portal) as long as employees can easily access, download, print, and dispute within a reasonable time.
  • Consent & Access Control. Employers must comply with the Data Privacy Act: secure transmission (TLS/SSL), password protection, role-based access.
  • Retention. Art. 109 Labor Code: at least three (3) years; BIR requires ten (10) years for payroll registers if used for tax audit.

4. Compliance Workflow & Reporting Obligations

Step Action Primary Tool / Form
1 Enroll new hires in SSS, PhilHealth, Pag-IBIG SSS R-1A / R1-E, PhilHealth ER2, Pag-IBIG MCRF
2 Compute contributions per payroll Latest brackets (updated January of each year)
3 Generate Electronic Contribution Report SSS R-3 / Electronic Contribution Collection List (E-CCC), PhilHealth ERV, Pag-IBIG RF-1
4 Pay & upload Bank partner or eGov PH System
5 File tax withholding BIR Forms 1601C (compensation), 1604C, Alphalist DAT files
6 Year-end Annualization & 2316 issuance Provide signed BIR Form 2316 to each employee before 31 Jan
7 Annual contribution confirmation SSS MSS summary, PhilHealth Member Data Record (MDR) updates, Pag-IBIG POP (Proof of Payment)

Failure to follow any step exposes the employer to fines, surcharges, interest, plus possible criminal prosecution for “failure or refusal to pay.”


5. Penalties & Enforcement Snapshot

Agency Fine / Imprisonment Administrative Remedies
DOLE ₱5,000–₱100,000 per affected worker &/or closure (Art. 303) Compliance Order; Show-Cause; Writ of Execution
SSS 3 % per month penalty & prison (6 yrs-1 day → 12 yrs) Issuance of Warrant of Distraint/Levy
PhilHealth 3 % per month + ₱5,000–₱10,000 per violated employee Compromise agreement; suspension of accreditation
Pag-IBIG 2 % per month + surcharge + 6-yr jail Employer counterpart delinquency program
BIR 25 %–50 % surcharge + 12 % interest + compromise penalties; prison 2-4 yrs Tax assessment; garnishment

6. Common Compliance Pitfalls

  1. Consolidated payslips (bi-monthly salary but single payslip) → violates requirement to issue every payout.
  2. Using old SSS/PhilHealth tables after annual adjustments.
  3. Multiplying daily wage by 30 instead of 26/313 divisor, causing under-remittance.
  4. Un-itemized “Other deductions” without written authority.
  5. Delayed final pay (>30 days after separation) without explaining pro-rated contributions.
  6. One-time year-end adjustment for under-withheld tax instead of monthly withholding.

7. Best-Practice Checklist

✔️ Task
Maintain a master payroll ledger mapping each payslip line item to the GL account and statutory return.
Subscribe to Gov.ph email circulars; refresh deduction tables every January or upon special issuance (e.g., PhilHealth premium moratoriums).
Integrate e-Gov PH or SSS R4-File Generator into payroll software to eliminate manual encoding.
Capture digital acknowledgments (e-signature or portal click-wrap) to prove payslip receipt.
Archive encrypted PDF payslips in separate storage from HRIS to meet retention and privacy rules.
Conduct an annual payroll compliance audit (internal or external) covering: payslip content, posting of Labor Law Poster, remittance deadlines, and variance between BIR 2316 vs. SSS/PhilHealth totals.

8. Employee Remedies & Employer Defenses

  • Workers may lodge complaints at the DOLE Regional Office, NLRC, or via SINGLE-ENTRY Approach (SEnA).
  • Burden of proof on employer: submit payslips, payroll registers, proof of remittances, and government receipts (OR).
  • Employers who can show good-faith error (e.g., system migration) may seek waiver of surcharges but not of principal liability.

9. Emerging Trends & 2025 Outlook

  1. Unified Multi-Agency eContribution System (eGov PH Service Portal) – phased rollout aiming to consolidate SSS, PhilHealth, Pag-IBIG, and BIR obligations into one payment file; expect mandatory adoption by Q4 2026.
  2. Greater digital wage payment – Bangko Sentral’s Paleng-QR and InstaPay fees reduced to drive e-payslips with QR-code validation.
  3. AI-assisted payroll validation – DOLE exploring API links for real-time payslip compliance checks during routine inspections.
  4. Data Privacy audits – National Privacy Commission (NPC) focusing on payroll vendors handling biometric time-keeping data.

10. Practical Takeaways

  1. Issue itemized payslips each pay day; electronic is fine if employees can print.
  2. Embed statutory contribution formulas into payroll systems and update tables promptly.
  3. Remit and file on time to avoid hefty interest and criminal sanctions.
  4. Retain payroll records for at least 10 years; secure them under DPA guidelines.
  5. Audit annually and educate HR/payroll staff on latest DOLE, SSS, PhilHealth, Pag-IBIG, and BIR circulars.

Disclaimer: This article provides general legal information as of July 8 2025 and is not a substitute for individualized legal advice. Consult labor-law counsel or certified payroll professionals for specific cases.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.