What is the Pag-IBIG salary threshold that determines the employee rate?

If the employee's monthly compensation is P1,500 or below, the employee contributes 1% and the employer contributes 2%. If the monthly compensation is over P1,500, both the employee and employer contribute 2% each.

What is the maximum Pag-IBIG contribution?

The maximum monthly compensation base for mandatory contributions is P10,000. At 2% each, the maximum employee share is P200 and the maximum employer share is P200, for a total of P400 per month.

Can I increase my Pag-IBIG contribution voluntarily?

Yes, employees can opt to increase their contribution beyond the mandatory amount through the Pag-IBIG Modified Pag-IBIG II (MP2) savings program. MP2 offers higher dividends than regular Pag-IBIG savings and is a voluntary additional savings program.

How does Pag-IBIG membership affect housing loan eligibility?

To qualify for a Pag-IBIG housing loan, a member must have at least 24 monthly contributions. The loan amount depends on the member's capacity to pay and the property value. Pag-IBIG housing loans offer below-market interest rates, making them one of the most affordable home financing options in the Philippines.

Pag-IBIG Contribution Guide 2026: HDMF Rates, Computation, and Benefits

Q: When should employers remit Pag-IBIG contributions?

Pag-IBIG contributions must be remitted on or before the 15th of the month following the applicable month. Late remittance incurs a penalty of 1/10 of 1% per day of delay.

Pag-IBIG (also known as HDMF — Home Development Mutual Fund) is the Philippine government's national savings program and affordable housing finance provider. All employed Filipinos are required to contribute monthly.

This guide covers how Pag-IBIG contributions are computed for 2026.

Contribution Rate Table

Pag-IBIG uses a simple two-tier rate structure based on monthly compensation:

Monthly Compensation	Employee Rate	Employer Rate	Total
P1,500 and below	1%	2%	3%
Over P1,500	2%	2%	4%

Computation Ceiling

The maximum monthly compensation base for mandatory contributions is P10,000. This means:

Maximum employee share: P10,000 x 2% = P200/month
Maximum employer share: P10,000 x 2% = P200/month
Maximum total: P400/month

Even if an employee earns P50,000 or more, the mandatory Pag-IBIG contribution is capped at P200 per side.

Computation Examples

Example 1: Salary at or below P1,500

Monthly salary: P1,200

Employee share: P1,200 x 1% = P12.00
Employer share: P1,200 x 2% = P24.00
Total: P36.00

Example 2: Salary between P1,500 and P10,000

Monthly salary: P8,000

Employee share: P8,000 x 2% = P160.00
Employer share: P8,000 x 2% = P160.00
Total: P320.00

Example 3: Salary above the ceiling

Monthly salary: P25,000

Since the ceiling is P10,000:

Employee share: P10,000 x 2% = P200.00
Employer share: P10,000 x 2% = P200.00
Total: P400.00

For semi-monthly payroll, the per-cutoff deduction is P200 / 2 = P100.00.

Remittance Schedule

Pag-IBIG contributions must be remitted on or before the 15th of the month following the applicable month.

Applicable Month	Remittance Deadline
January 2026	February 15, 2026
February 2026	March 15, 2026
March 2026	April 15, 2026

Late remittance incurs a penalty of 1/10 of 1% per day of delay.

Remittance Channels

Pag-IBIG Fund offices
Virtual Pag-IBIG (online portal)
Authorized banks (Landbank, DBP, BDO, BPI, etc.)
Payment centers (Bayad, 7-Eleven, SM Business Centers)

Pag-IBIG Benefits

Housing Loan

The primary benefit of Pag-IBIG membership is access to affordable housing loans:

Minimum contributions: 24 monthly contributions to qualify
Loan amount: Up to P6 million (depending on capacity to pay)
Interest rate: 5.375% to 10.375% per annum (well below commercial bank rates)
Loan term: Up to 30 years

Total Accumulated Value (TAV)

All member and employer contributions accumulate in the member's TAV, which can be withdrawn upon:

Retirement (age 60+)
Total disability or insanity
Separation from service (after 180 days)
Membership maturity (20 years of contribution)

Short-Term Loans

Multi-Purpose Loan: Up to 80% of TAV
Calamity Loan: Up to 80% of TAV (for areas under state of calamity)

Modified Pag-IBIG II (MP2)

MP2 is a voluntary savings program that offers higher dividends than regular Pag-IBIG savings:

Minimum monthly savings: P500
Higher dividend rate (historically 5-7% per annum)
5-year savings maturity
Tax-exempt dividends
Can be saved through salary deduction

Common Pag-IBIG Compliance Issues

Applying the wrong rate — Use 1% for employees earning P1,500 or below, 2% for those above. The threshold is based on monthly compensation, not daily rate.
Forgetting the ceiling — Always cap the computation base at P10,000 for mandatory contributions.
Not splitting for semi-monthly — For semi-monthly payroll, divide the monthly contribution by 2 for each cutoff.
Missing remittance deadlines — The daily penalty adds up. Use automated reminders or payroll software with deadline tracking.
Not registering new employees — New hires must be reported to Pag-IBIG within 30 days.

How TalinoHR Computes Pag-IBIG

TalinoHR's payroll engine handles Pag-IBIG automatically:

Two-tier rate logic — The engine checks the P1,500 threshold and applies the correct employee rate (1% or 2%)
Ceiling enforcement — Monthly compensation is capped at P10,000 before computing shares
Employer rate always 2% — Applied consistently regardless of salary level
Semi-monthly splitting — Contributions are divided across cutoffs with precise decimal handling
Decimal.js precision — All money calculations avoid floating-point errors

Simple, accurate, automatic. Book a demo to see TalinoHR's payroll compliance features.