Employee Benefits That Every Workers Must Know About

Employee Benefits That Every Workers Must Know About

Employees love benefits almost as much as they love bonuses. For many employees, it’s one of the determining factors whether they’d keep their employment for the long-term or move on to another company. For businessmen and employers, it’s a consideration that must be taken seriously to boost employee satisfaction.

Employee benefits are non-salary compensation that can vary from company to company. Benefits are indirect and non-cash payments within a compensation package. They are provided by organizations in addition to salary to create a competitive package for the potential employee.

Here are a few things you need to know about employee benefits in the Philippines as mandated by the government:

Wage and compensation benefits

Republic Act No. 6727 (also known as the “Wage Rationalization Act”) mandates the fixing of the minimum wages applicable to different industrial sectors, namely, non-agriculture, agriculture plantation, and non-plantation, cottage/handicraft, and retail/service, depending on the number of workers or capitalization or annual gross sales in some sectors.

Minimum Wage Daily Rate per Region and Industry in Philippine Peso:

RegionNon-AgricultureAgriculture – PlantationAgriculture – Non-Plantation
NCR₱475.00 – ₱512.00₱475₱475
CAR₱270.00 – ₱300.00₱270 – ₱300₱270 – ₱300
Region I₱243.00 – ₱280.00₱252₱243
Region II₱340₱320₱320
Region III₱329.00 – ₱380.00₱314 – ₱350₱302 – ₱334
Region IVA₱247.00 – ₱290.00₱293 - ₱353.50₱293 - ₱353.50
Region IVB₱247.00 – ₱290.00₱247 – ₱290₱247 – ₱290
Region V₱280.00 – ₱290.00₱280 – ₱290₱280 – ₱290
Region VI₱271.50 – ₱323.50₱281.50₱271.50
Region VII₱308.00 – ₱366.00₱288 – ₱348₱288 – ₱348
Region VIII₱285₱251₱245
Region IX₱296₱283₱283
Region X₱316.00 – ₱328.00₱304 – ₱326₱304 – ₱326
Region XI₱340₱335₱335
Region XII₱295₱272₱272
Region XIII₱280₱280₱280
ARMM₱265₱255₱255

Note: Househelpers are not included in the above list as a more specific law is in place under the Republic Act (R.A.) No. 10361, or Domestic Workers Act. A minimum monthly salary of
2,500 applies to house helpers in NCR, 2,000 in chartered cities and first-class municipalities, and 1,500 in other municipalities.

13th month pay

Thirteenth-month pay is a form of monetary benefit given to every rank-and-file employee payable before the end of every year as stipulated by the Department of Labor and Employment (DOLE). These employees must have worked for at least one month in a year. Basically, the amount of the 13th month pay is 1/12 of the employee’s annual salary.

The 13th month pay covers only the basic salary of the employee, which does not include allowances and monetary benefits that are not considered or integrated as part of the employee’s regular compensation.

Retirement pay

Upon the age of 60 years or higher, the employee who has served a company for at least five years may be granted a retirement pay equivalent to at least one-half month of salary for every year of service. A fraction of at least six months is considered as one whole year

The “one-half month salary” includes:

  1. 15 days salary based on the latest salary rate
  2. Cash equivalent of 5 days of service incentive leave (SIL)
  3. One-twelfth (1/12) of the 13th month pay

Sample

Daily rate: ₱1,000

Years of service: 10

½ of daily rate15 days +SIL+1/12 of 13th monthNumber of years in serviceComputationRetirement Pay
₱50022.510500 x 22.5 x10₱112,500

Overtime pay

The employee who renders overtime will be given additional compensation equivalent to his regular wage plus at least 25% premium.

Overtime pay for a holiday or rest day shall be paid an additional compensation from the rate of the first eight hours on a holiday or rest day plus at least 30%.

On a Special Non-Working day or rest day, an additional compensation of 30% premium will be paid in addition to the rate of the first eight hours of holiday or rest day.

Sample computation

Regular overtime

Hourly rateOvertime premiumOvertime rate
₱5025%₱71.56

Rest day or a regular holiday with overtime

Regular hourly rateRest day or holiday hourly rateOvertime premiumOvertime rate
₱50₱71.5630%₱93.02

Night shift differential (NSD)

Applies to employees who work between 10:00 p.m. and 6:00 a.m., where an additional 10% premium is applied for every hour at work.

Regular hourly rateNight differentialHourly rate with night differential
₱5010%₱55

Leave benefits

While sick leave and vacation leave benefits are not specifically stated under the law, it stipulates that private employees are allowed to provide employees a yearly Service Incentive Leave of five days with pay. This applies to employees with work tenure of at least one year within the company.

Maternity leave

Any pregnant woman employee who has worked with the company for at least six months will be granted a maternity leave of at least two weeks prior to her due date (expected date of delivery) and four weeks after normal delivery or miscarriage with full pay based on her regular salary.

A total of 60 days is granted for government employees and 60 to 80 days for employees in the private sector.

The Maternity Leave benefit is effective up to the first four deliveries of the woman employee working in the company.

However, if the Senate Bill 2982, or the Expanded Maternity Leave Law of 2015, which has been approved on its third (3rd) reading on January 18, 2016, is enacted into law, pregnant employees will be granted 100 days of maternity leave. This is applicable to employees in the government and private sector, regardless of the type of delivery.

Paternity leave

The R.A No. 8187, or Paternity Leave Act of 1996, grants seven days of fully paid leave to married fathers. This is effective up to the first four deliveries of the legitimate spouse.

Parental Leave for Solo Parents, or Solo Parenting Leave (SPL)

Seven days leave with pay for every year of service, on top of other leave privileges, e.g. maternity or paternity leave.

Special leave benefits for women

This entitles women who underwent surgery due to gynecological disorders to two months’ leave with full pay, as stipulated in R.A. 9710 or the Magna Carta of Women. This applies to employees who have rendered at least six months of service with the company.

On the other hand, victims of violence against women, as stipulated in R.A. 9262 or the Anti-Violence Against Women and Their Children Act of 2004, is entitled to 10 days leave with full pay.

Mandatory government benefits and contributions

The following government contribution will be automatically deducted from regular employees salary, with the following benefits:

Social Security System (SSS) benefits

It is an insurance program mandated by the Philippine government to cover all income earners or workers in the private sector, in contrast, government workers are covered by the GSIS or Government Service Insurance System.  

This program has been in place to provide insurance to workers who encounter work-related illnesses or injury resulting in disability or death. The compensation provided by SSS includes the following:

  1. Medical services, appliances, and supplies in an accredited hospital.
  2. Rehabilitation services, including medical, surgical, and hospital treatment
  3. Income cash benefit.

 

Salary Range (Employee/SE/VM/OFW)
Employer Share
Employee Share
Total Contribution (Employee)
Total Contribution (SE/VM/OFW)
₱1,000-1,249.99
₱83.70
₱36.30
₱120
₱110
₱1,250-1,749.99
₱120.50
₱54.50
₱175
₱165
₱1,750-2,249.99
₱157.30
₱72.70
₱230
₱220
₱2,250-2,749.99
₱194.20
₱90.80
₱285
₱275
₱2,750-3,249.99
₱231
₱109
₱340
₱330
₱3,250-3,749.99
₱267.80
₱127.20
₱395
₱385
₱3,750-4,249.99
₱304.70
₱145.30
₱450
₱440
₱4,250-4,749.99
₱341.50
₱163.50
₱505
₱495
₱4,750-5,249.99
₱378.30
₱181.70
₱560
₱550
₱5,250-5,749.99
₱415.20
₱199.80
₱615
₱605
₱5,750-6,249.99
₱452
₱218
₱670
₱660
₱6,250-6,749.99
₱488.80
₱236.20
₱725
₱715
₱6,750-7,249.99
₱525.70
₱254.30
₱780
₱770
₱7,250-7,749.99
₱562.50
₱272.50
₱835
₱825
₱7,750-8,249.99
₱599.30
₱290.70
₱890
₱880
₱8,250-8,749.99
₱636.20
₱308.80
₱945
₱935
₱8,750-9,249.99
₱673
₱327
₱1,000
₱990
₱9,250-9,749.99
₱709.80
₱345.20
₱1,055
₱1,045
₱9,750-10,249.99
₱746.70
₱363.30
₱1,110
₱1,100
₱10,250-10,749.99
₱783.50
₱381.50
₱1,165
₱1,155
₱10,750-11,249.99
₱820.30
₱399.70
₱1,220
₱1,210
₱11,250-11,749.99
₱857.20
₱417.80
₱1,275
₱1,265
₱11,750-12,249.99
₱894
₱436
₱1,330
₱1,320
₱12,250-12,749.99
₱930.80
₱454.20
₱1,385
₱1,375
₱12,750-13,249.99
₱967.70
₱472.30
₱1,440
₱1,430
₱13,250-13,749.99
₱1,004.50
₱490.50
₱1,495
₱1,485
₱13,750-14,249.99
₱1,041.30
₱508.70
₱1,550
₱1,540
₱14,250-14,749.99
₱1,078.20
₱526.80
₱1,605
₱1,595
₱14,750-15,249.99
₱1,135
₱545
₱1,680
₱1,650
₱15,250-15,749.99
₱1,171.80
₱563.20
₱1,735
₱1,705
₱15,750-over
₱1,208.70
₱581.30
₱1,790
₱1,760

More information can be found here.

Pag-IBIG benefits

Pab-IBIG provides housing loans, calamity loans, and multi-purpose loans to employees in the Philippines. The repayment is covered by both the employer and employee and the employees share is deducted from his or her salary.

Monthly CompensationEmployee SharePercentage of Monthly Compensation Employer Share
₱1,500 and below1% 2%
Over ₱1,5002%2%

Employee’s salary Employer ShareEmployer Share
₱10,000₱200₱200


The maximum monthly compensation used in computing the employee contributions is currently set at
5,000. This means that the maximum member contribution and employer counterpart per month are both currently ₱100.

To learn more, view our article that discusses in detail the complete Pag-IBIG benefits and membership requirements which you can use as reference.

PhilHealth benefits

This is the healthcare insurance provided to Filipinos by the government. PhilHealth extends financial assistance for inpatient and outpatient hospitalization. One of its most comprehensive packages is the Z Benefit Package, made for patients undergoing prolonged hospitalization and expensive treatments, or suffering from Millennium Development Goal (MDG)-related illnesses.

Employers are required to pay for their employees’ PhilHealth monthly contribution. However, they do not need to cover the entire monthly premium as the payment is shared equally.

The said contribution is as follows:

Salary BracketSalary RangeSalary BaseTotal Monthly PremiumEmployee ShareEmployer Share
1₱9,999.99 and belown/a₱275.00₱125.00₱125.00
3₱10,000.00 – ₱10,999.99₱10,000.00
₱275.00 ₱125.00 ₱125.00
4₱11,000.00 – ₱11,999.99₱11,000.00 ₱302.50 ₱137.50 ₱137.50
5₱12,000.00 – ₱12,999.99₱12,000.00 ₱330.00₱150.00₱150.00
6₱13,000.00 – ₱13,999.99₱13,000.00₱357.50₱162.50 ₱162.50
7₱14,000.00 – ₱14,999.99₱14,000.00 ₱385.00 ₱175.00₱175.00
8₱15,000.00 – ₱15,999.99₱15,000.00₱412.50₱187.50₱187.50
9₱16,000.00 – ₱16,999.99₱16,000.00 ₱440.00₱200.00₱200.00
10₱17,000.00 – 17,999.99₱17,000.00 ₱467.50 ₱212.50 ₱212.50
11₱18,000.00 – ₱18,999.99₱18,000.00₱495.00₱225.00 ₱225.00
12₱19,000.00 – ₱19,999.99₱19,000.00₱522.50₱237.50₱237.50
13₱20,000.00 – ₱20,999.99₱20,000.00₱550.00₱250.00₱250.00
14₱21,000.00 – ₱21,999.99₱21,000.00₱577.50₱262.50₱262.50
15₱22,000.00 – ₱22,999.99₱22,000.00₱605.00 ₱275.00 ₱275.00
16₱23,000.00 – ₱23,999.99₱23,000.00₱632.50₱287.50 ₱287.50
17₱24,000.00 – ₱24,999.99₱24,000.00₱660.00₱300.00₱300.00
18₱25,000.00 – ₱25,999.99₱25,000.00₱687.50₱312.50₱312.50
19₱26,000.00 – ₱26,999.99₱26,000.00₱715.00₱325.00₱325.00
20₱27,000.00 – ₱27,999.99₱27,000.00₱742.50 ₱337.50 ₱337.50
21₱28,000.00 – ₱28,999.99₱28,000.00₱770.00₱350.00₱350.00
22₱29,000.00 – ₱29,999.99₱29,000.00₱797.50₱362.50₱362.50
23₱30,000.00 – ₱30,999.99₱30,000.00₱825.00₱375.00₱375.00
24₱31,000.00 – ₱31,999.99₱31,000.00
₱852.50₱387.50₱387.50
25₱32,000.00 – ₱32,999.99₱32,000.00 ₱880.00₱400.00₱400.00
26₱33,000.00 – ₱33,999.99₱33,000.00₱907.50₱412.50₱412.50
27₱34,000.00 – ₱34,999.99₱34,000.00₱935.00₱425.00₱425.00
28₱35,000.0 to ₱39,999₱35,000.00₱962.50₱437.50₱437.50
29₱40,000 and up₱40,000₱1,100₱550.00₱550.00
Updated January 2018


For a more comprehensive read, go over our article on PhilHealth contributions and benefits, to give you a better idea on its entire coverage
.

It is every employee and employer’s rights and responsibility to be aware of the benefits and compensation provisioned by the Department of Labor and Employment. Whichever side of the business you are operating, understanding this basic component of the Philippine Labor Code can ensure that you’re lawfully employed or employing someone.

Source: http://bwc.dole.gov.ph/images/Handbook/2017-Handbook-on-Workers-Statutory-Monetary-Benefits.pdf

Leave your comment