The Philippine government offers social welfare services through SSS (Social Security System), GSIS (Government Service Insurance System), Pag-IBIG, and PhilHealth (Philippine Health Insurance Corporation).
The law requires companies and employees to contribute to these agencies, and part of your salary deductions comprise your Pag-IBIG contributions.
If you’ve always wondered what this employee benefit is and how much you give to Pag-IBIG, join us as we look closer at your HDMF (Home Development Mutual Fund) contribution.
What is the HDMF Contribution?
Pag-IBIG offers a regular savings program to all HDMF members. It’s known as the HDMF contribution, comprising part of an employee’s salary and their employer’s contribution. The Pag-IBIG Fund uses contributions to offer short-term and housing loans to its members.
Pag-IBIG reserves at least 70% of its annual net income and distributes it to each member’s Pag-IBIG savings. These payments are called dividends, which increase as members save more money.
How Much is Your Monthly Pag-IBIG Contribution?
Your monthly income determines the monthly premium of your Pag-IBIG membership. The HDMF contribution table below shows how much you and your employer should contribute to Pag-IBIG’s savings program.
|Monthly Income||Employee Share||Employer Share|
|₱1,500 or lower||1%||2%|
If you’re an overseas Filipino worker (OFW) whose employer is exempted from mandatory coverage, Pag-IBIG sets your contribution rate at 2% of your monthly salary. You can also pay the employer’s share if you want to.
But what if you’re a self-employed member? In this case, your monthly contribution could fall between 3% to 4% since you’ll cover both employee and employer shares.
More importantly, Pag-IBIG considers ₱5,000 as the maximum compensation for your employer’s monthly HDMF contribution computations. It sets you and your employer’s contribution at ₱100 each.
A Note on HDMF Contributions for 2023
Last March 2023, Pag-IBIG declared it would postpone its scheduled contribution increase for the year. The hike would raise an employee’s minimum contribution to ₱150.
Instead, Pag-IBIG’s management moved the increase to January 2024. Watch this space for updates on the new HDMF contribution rate once implemented.
How Do You Compute Your HDMF Contribution?
Calculating your monthly Pag-IBIG contribution involves multiplying your monthly income by its corresponding multiplier.
As seen above, you contribute 1% if your basic salary is ₱1,500 or below, and 2% if you earn over ₱1,500.
You can use this formula to compute your monthly HDMF contribution:
Monthly salary x employee’s contribution rate = monthly Pag-IBIG contribution
Now, let’s say you earn a base monthly salary of ₱15,000. Since your salary goes over the ₱1,500 and below the limit, your contribution rate is 2%.
Here’s how to compute your monthly Pag-IBIG contribution with the formula above:
₱15,000 x 2% = ₱300 (₱15,000 x 0.02 = ₱300)
Where Do You Pay Your HDMF Contribution?
If you’re a formally employed Pag-IBIG member, your employer will remit your contributions on your behalf. They can pay over the counter at authorized Bayad Center branches and banks such as Asia United Bank, Bank of the Philippine Islands, and Land Bank of the Philippines.
Also, you can increase your savings through your employer or the following payment options:
- Online payment via Virtual Pag-IBIG
- Over-the-counter payment at:
- Your nearest Pag-IBIG branch
- Authorized collecting partners
- Payment via digital non-bank and online banking platforms
- Debit or credit card payments (Visa, Mastercard, or JCB cards are accepted.)
- Payment via Maya (formerly PayMaya)
If you’re self-employed or working overseas, consider remitting your contributions through the abovementioned channels.
When Should Your Employer Remit HDMF Contributions?
Your employer should remit Pag-IBIG contributions on these dates:
|First Letter of Employer or Business Name||Payment Date|
|A - D||10th to 14th day of the month after the covered period|
|E - L||15th to 19th day of the month after the covered period|
|M - Q||20th to 24th day of the month after the covered period|
|R - Z; 0 - 9||25th to the last day of the month after the covered period|
Meanwhile, self-employed members can pay:
- On or before the 10th day of the month following the covered period, if they pay monthly
- On the 10th day of the first month of the quarter, if the member pays quarterly
Can You Withdraw Your HDMF Contribution?
You can withdraw your HDMF contributions, including earnings or dividends if you meet specific criteria.
That said, you may choose to withdraw your contribution if:
Your Membership Matures
If you’ve made at least 240 monthly contributions, Pag-IBIG will give you your contribution. You can also withdraw your Total Accumulated Value (TAV) after your 15th year of continuous membership if it began after Republic Act No. 9679’s implementation. However, you’ll only receive your TAVs if you’ve paid an outstanding housing or short-term loan, or both.
You’ve Already Retired
Generally, you receive your TAVs when you retire at age 65. But you can also get your total HDMF contributions if you retire at age 60.
You’re Diagnosed with a Physical or Mental Disability
Pag-IBIG can also refund your TAVs if you’re experiencing complete and permanent disability. Pag-IBIG defines disability as any of the following:
- Temporary full disability for over 120 days
- Complete loss of eyesight
- Loss of two limbs (at or over the ankle or wrist)
- Permanent paralysis of both limbs
- Brain injuries leading to incurable imbecility
- Other cases defined as complete and permanent disabilities by a licensed physician and approved by the Board of Trustees
Other Situations Occur
Pag-IBIG can also give you your TAVs if:
- Your employment ends for health reasons.
- You leave the Philippines permanently.
- Death happens. Pag-IBIG will give your legal heirs your TAV and an additional cash benefit of up to ₱6,000.
Calculate HDMF Contributions Quickly & Accurately
The Pag-IBIG fund helps you build a secure future through your monthly contributions. However, computing these amounts can get complicated with manual processes.
If you’re an HR admin, streamlining HDMF contribution computations lets you reduce errors, save time, and address more important matters within your organization. Sprout’s payroll solution automates your payroll process while following Pag-IBIG’s latest contribution rates, ensuring accurate calculations.
Want to see our payroll system up close? Book a consultation today. And for more help computing other benefits, check out our blog.