Pag-IBIG (HDMF) Contribution Rules

Pag-IBIG, also known as the Home Development Mutual Fund (HDMF), is a mandatory savings program for Philippine employees. TalinoHR automatically computes Pag-IBIG contributions during payroll processing.

Contribution Rates

Pag-IBIG uses a tiered employee rate based on monthly salary, while the employer rate is fixed:

Employee rate (salary P1,500 and below): 1% of monthly salary
Employee rate (salary above P1,500): 2% of monthly salary
Employer rate (all employees): 2% of monthly salary

The P1,500 threshold determines which employee rate applies. In practice, most employees earn above P1,500 and pay 2%.

Maximum Monthly Compensation (Salary Ceiling)

Pag-IBIG applies a maximum monthly compensation of P10,000 as the salary ceiling for contribution computation. If an employee's monthly salary exceeds P10,000, only P10,000 is used as the base.

This means the maximum contributions are:

Maximum employee share: P200/month (2% of P10,000)
Maximum employer share: P200/month (2% of P10,000)
Maximum total contribution: P400/month

Contribution Examples

Monthly Salary	Salary Base Used	Employee Rate	Employee Share	Employer Share	Total
P1,000	P1,000	1%	P10	P20	P30
P1,500	P1,500	1%	P15	P30	P45
P5,000	P5,000	2%	P100	P100	P200
P10,000	P10,000	2%	P200	P200	P400
P25,000	P10,000 (ceiling)	2%	P200	P200	P400
P50,000	P10,000 (ceiling)	2%	P200	P200	P400

How the Computation Works

The system takes the employee's monthly basic salary.
The salary is capped at the P10,000 ceiling (no floor is applied).
The employee rate is determined: 1% if salary is P1,500 or below, 2% if above P1,500.
Employee share = capped salary x employee rate.
Employer share = capped salary x 2%.
For semi-monthly pay frequency, each payroll period deducts half of the monthly shares.

Pay Basis Handling

Like other government contributions, Pag-IBIG uses the monthly salary equivalent regardless of pay basis:

Monthly employees: Basic salary used directly.
Daily employees: Monthly salary = daily rate x work days per month.
Hourly employees: Monthly salary = hourly rate x hours per day x work days per month.

Semi-Monthly Deduction

For employees paid semi-monthly, the Pag-IBIG deduction per payroll period is half of the monthly employee share. For example, if the monthly employee share is P200, each semi-monthly payroll deducts P100.

Where to View Pag-IBIG Contributions

Payroll Run Detail: Navigate to Payroll (/payroll) and click on any completed payroll run to see per-employee Pag-IBIG deductions.
Payslip: Each employee's payslip shows the Pag-IBIG employee share under government contributions.
Remittance Summary: Navigate to Payroll → Government (/payroll/government) to generate a monthly remittance summary showing total Pag-IBIG contributions for HDMF remittance.

Important Notes

Pag-IBIG contributions are mandatory for all active employees.
The employee share is a pre-tax deduction (subtracted before computing withholding tax).
The P10,000 ceiling was updated in February 2024 (previously P5,000).
Voluntary contributions above the mandatory amount are not handled by the automatic payroll engine. Use manual deductions for additional voluntary Pag-IBIG savings.

Pag-IBIG Loans

Pag-IBIG also provides housing loans and multi-purpose loans to members. Employees can track Pag-IBIG loan deductions through TalinoHR. See the Loans knowledge article for details on loan management.

Remittance Summary: Monthly report for Pag-IBIG remittance. Navigate to Payroll → Government (/payroll/government).
BIR 2316: Annual report that includes total Pag-IBIG contributions per employee.