PhilHealth Contribution Rates for Minimum-Wage Earners in the Philippines

A practitioner’s guide to the law, rules, computation, and compliance

I. Statutory and Regulatory Basis

National Health Insurance Act — Republic Act No. 7875, as amended by RA 9241 and RA 10606, created the National Health Insurance Program (NHIP) and PhilHealth, established membership classes, contribution duties, and penalties.
Universal Health Care (UHC) Act — RA 11223 (and its IRR) reorganized membership into direct and indirect contributors, set the premium-rate schedule (phased increases over several years), authorized income floors and ceilings for contribution computation, and strengthened “no-denial of service” and portability rules.
Implementing Circulars — PhilHealth periodically issues circulars fixing the applicable premium rate for a given year, the monthly basic salary floor and ceiling, and employer-employee cost sharing for the employed/direct contributors. These circulars operationalize RA 11223 and are binding on employers.

Practical point: Courts and agencies will read RA 11223 and PhilHealth circulars in pari materia. When in doubt, the later, specific PhilHealth circular for the contribution year governs the rate and salary brackets, while the statute and IRR govern principles (e.g., who pays, penalties, entitlement).

II. Who Counts as a “Minimum-Wage Earner” (MWE)?

Definition (Tax/DOLE context): An MWE is an employee paid the statutory minimum wage for their region/industry/classification, as fixed by the relevant Regional Tripartite Wages and Productivity Board (RTWPB).
For PhilHealth purposes: MWEs in private employment belong to the Employed Sector (Direct Contributors). They are not exempt from PhilHealth premiums by reason of being on minimum wage (unlike certain kasambahay cases below). The employer and employee share the premium 50-50 unless a special law says otherwise.

Special case — Kasambahay: Under the Batas Kasambahay (RA 10361), if the kasambahay earns below the statutory threshold set in PhilHealth guidance, the employer shoulders the full premium. Above the threshold, the standard 50-50 sharing applies.

Government JO/Contract of Service: Typically treated as direct contributors without an employer share (i.e., self-pay), unless a specific arrangement exists.

III. Contribution Mechanics for MWEs (Employed/Direct Contributors)

A. The Formula

PhilHealth premiums for employees are computed from Monthly Basic Salary (MBS), subject to a floor and a ceiling:

Let R = PhilHealth premium rate for the applicable year (as set by RA 11223 schedule and the year’s circular).
Let F = Salary floor (minimum MBS used for computation; if actual MBS < F, use F).
Let C = Salary ceiling (maximum MBS used; if actual MBS > C, use C).
Let MBS* = min( max(MBS, F), C ).

Then:

Total Monthly Premium = MBS* × R
Employer Share = 50% of Total Monthly Premium
Employee Share = 50% of Total Monthly Premium (except special cases like certain kasambahay).

The rate (R) and the ceiling (C) have changed over time under the UHC schedule (with some governmental deferrals in certain years). Always apply the rate and ceiling for the contribution year of the payroll month you are remitting.

B. Determining the Monthly Basic Salary (MBS) for MWEs

Regional minimum wage → convert to monthly pay using the employer’s standard monthlyization method compliant with DOLE rules (common practice: 26 working days for monthlyization of daily rates, but follow your policy/CBA if compliant).
Exclude: non-basic pay that PhilHealth circulars classify as non-basic for contribution purposes (e.g., discretionary allowances if so classified).
Apply the PhilHealth floor and ceiling to arrive at MBS*.

C. Illustrative Computations (using generic placeholders)

Note: The following are examples to show methodology. Replace R, F, and C with the official figures for the pay year.

Example 1 (MWE below the floor):
- Daily minimum = ₱450; monthlyized MBS = ₱11,700.
- Suppose F = ₱10,000; C = ₱80,000; R = 5%.
- MBS* = ₱11,700 (already above F and below C).
- Total Premium = ₱11,700 × 0.05 = ₱585.
- Employer Share = ₱292.50; Employee Share = ₱292.50.
Example 2 (MWE far below F):
- Daily minimum = ₱380; monthlyized MBS = ₱9,880.
- MBS* = F = ₱10,000 (floor applies).
- Total Premium = ₱10,000 × R.
- Split 50-50 unless a special rule applies.
Example 3 (Kasambahay under threshold):
- Monthly pay = ₱4,500; if under the PhilHealth/RA 10361 threshold, employer shoulders 100% of the premium computed against the applicable floor/ceiling and rate.

Arithmetic tip: If your payroll is semi-monthly, compute the monthly premium first, then divide into two equal parts for withholding and employer booking.

IV. Rate Schedule and Year-to-Year Changes (Legal Framing)

RA 11223 set graduated increases to the premium rate (R) and ceiling (C) over multiple years, culminating in a higher final rate/ceiling.
Executive and PhilHealth directives have, in some years, deferred or phased increases for economic conditions.
For compliance, HR/payroll should apply the R and C stated in the PhilHealth circular for that calendar year. This circular is the controlling administrative issuance for the period.

Key takeaway: The law fixes the direction of travel (progressive increases), but the specific number you must use in payroll is the one promulgated for that year. Always tie your computations to the payroll month (accrual basis).

V. Remittance, Reporting, and Withholding

Withholding: The employer withholds the employee share from wages each payroll cut-off.
Employer booking: Record the employer share as a payroll benefit expense.
Payment & Posting: Remit to PhilHealth through accredited channels within the deadline set in the year’s circular (deadlines are typically monthly or quarterly, depending on payer class).
Posting verification: Reconcile Statement of Premium Payments (SPP) and ensure Electronic Premium Remittance System (EPRS) postings match payroll registers.

Penalties for late remittance (statutory): RA 7875 (as amended) authorizes surcharges/interest (historically referenced at 2% per month for delinquencies), plus enforcement actions. Employees’ entitlement to benefits should not be prejudiced by the employer’s failure to remit; PhilHealth may assess and collect from the employer.

VI. Entitlement & Benefits Interface

No denial of services: Under UHC, non-payment of premiums by a direct contributor shall not bar the member from availing of PhilHealth benefits at point of service.
Contribution sufficiency rules: Administrative rules still reference look-back periods for certain benefit availments, but UHC policy direction favors treatment first, collection later—especially for emergency and basic packages.
Portability: Coverage is nationwide across accredited facilities; MWEs can claim benefits even when moving across regions.

VII. Edge Cases Affecting MWEs

Multiple employers / multiple MW jobs: Aggregate MBS across employers up to the ceiling (C). Each employer remits its pro-rata share, typically based on what they actually pay the employee (coordinate through EPRS).
Partial-month employment or unpaid leave: Compute the monthly premium using MBS*, but withhold the employee share pro-rata to actual paid days only if allowed by your internal policy and PhilHealth guidance; otherwise, maintain the monthly amount and settle through adjustments.
Seasonal/Project-based employees: Treat as employed direct contributors during periods of engagement; between projects, they may shift to self-earning or indirect categories depending on circumstances.
Apprentices/learners: If engaged under valid DOLE programs and receiving compensation, they are typically covered as employed for PhilHealth purposes.
MWEs promoted mid-year above minimum wage: The contribution base changes when the MBS changes. Apply new MBS from the effective date of pay change; you need not retro-recompute past months unless there was an error.

VIII. Record-Keeping & Evidence

Maintain payroll proofs (payslips showing PhilHealth deduction), EPRS printouts, official receipts/acknowledgments, bank proof of payment, and reconciliations for at least the period required by labor and tax retention rules (conservatively, 10 years to cover assessment horizons).
Individual Member Data Record (MDR) and PhilHealth ID should be collected upon hiring and kept updated.
For new hires without PINs, assist with registration and tagging in EPRS before first remittance.

IX. Compliance Checklist for HR/Payroll (MWEs)

Identify rate (R), floor (F), and ceiling (C) for the current calendar year per PhilHealth circular.
Confirm employee is an MWE under DOLE rules; classify as Employed—Direct Contributor in PhilHealth.
Monthlyize the minimum wage correctly (e.g., daily × 26) and derive MBS* with F/C.
Compute Total Premium = MBS* × R; split 50-50 (unless kasambahay exception).
Withhold, book, and remit on time; reconcile postings in EPRS.
Keep evidence of remittance and employee notification via payslip.
Update for wage orders (when the regional minimum changes) and PhilHealth circulars (when R or C changes).

X. Frequently Asked Questions

1) Are MWEs exempt from PhilHealth contributions? No. Being on minimum wage does not exempt a private-sector employee from PhilHealth premiums. The standard rule is 50-50 sharing with the employer, subject to special laws like the Batas Kasambahay for household helpers below the threshold.

2) What if the employer failed to remit? The employee’s benefit entitlement remains under UHC’s no-denial rule, while PhilHealth may assess penalties and collect from the employer.

3) Which wage applies if there’s a new wage order mid-month? Use the effective date of the wage order for payroll; recompute MBS from that date and adjust the premium prospectively (or per company policy if a mid-month proration method is documented).

4) Do night-shift differential, OT pay, or allowances count in MBS? PhilHealth defines Monthly Basic Salary in its circulars. As a conservative practice, base the computation on basic pay; include or exclude variable pay only if a circular requires it.

5) Can an MWE pay more to “top up” PhilHealth? PhilHealth premiums for the employed sector are formula-based; voluntary top-ups are not standard. Employees cannot self-increase premiums to widen benefits; PhilHealth benefit packages are uniform by case type, not by individual premium size.

XI. Model Policy Clause (for Employee Handbook)

PhilHealth Contributions for Minimum-Wage Earners. The Company complies with RA 11223 and applicable PhilHealth circulars. For all employees earning the statutory minimum wage, the Company and the Employee shall contribute to PhilHealth at the rate and salary ceiling/floor prescribed for the applicable calendar year, shared equally unless a special law requires otherwise (e.g., Batas Kasambahay). The Company shall withhold the employee share, remit the total premium within regulatory deadlines, and reconcile postings. Proof of deduction and remittance shall be made available upon request.

XII. Bottom Line

For minimum-wage earners in the Philippines, PhilHealth contributions are mandatory, computed from monthly basic salary within a floor-to-ceiling band and split 50-50 between employer and employee (subject to limited statutory exceptions). The exact numbers that payroll must use each year—rate, salary floor, and ceiling, remittance deadlines, and any temporary deferrals—are fixed by the PhilHealth circular for that year and should be checked before each payroll cycle and whenever a new wage order takes effect.