PAG-IBIG contributions are 2% of a member’s monthly salary, with a maximum compensation of Php 5,000. Employers are required to match their employees’ contributions.
PAG-IBIG Fund is a government-mandated savings program in the Philippines that aims to provide its members with housing assistance and other benefits.
All employees, including domestic helpers and self-employed individuals, must contribute to PAG-IBIG Fund to avail of its services. So here in this article, we will discuss how much PAG-IBIG contributions are. And what are the different types of assistance, payment options, and penalties for late payments?
CHECK: How to Withdraw PAG IBIG Contribution?
To find out the more objective details, let’s explore the details provided next;
Contents
PAG-IBIG Contribution
The introductory PAG-IBIG contribution rate is 2% of the member’s monthly salary, with a maximum monthly compensation of Php 5,000.
This means that a member’s maximum monthly contribution is Php 100. Employers are also required to match their employees’ contributions to PAG-IBIG Fund.
For instance, if an employee earns Php 15,000 a month, the PAG-IBIG contribution will be calculated based on the maximum monthly compensation of Php 5,000. The employee’s contribution will be Php 100, and the employer’s share will also be Php 100, bringing the total monthly contribution to Php 200.
PAG-IBIG Contribution: Higher Monthly Income
For employees who earn more than Php 5,000 a month, the contribution rate remains at 2% of the maximum monthly compensation of Php 5,000. However, the employee can opt to contribute more than the minimum required contribution of Php 100 per month.
The excess contribution will be credited to the member’s PAG-IBIG savings and earn dividends over time. The employer is not required to match the extra donation.
For self-employed individuals, the monthly contribution is based on their monthly income, with a minimum monthly donation of Php 500. The contribution rate remains at 2% of the monthly payment, but the member can also opt to contribute more than the minimum required amount.
CHECK: How to Claim PAG IBIG Contribution?
PAG-IBIG Contribution: Voluntary
Voluntary PAG-IBIG contribution is available to all PAG-IBIG members, including those not required to contribute, such as overseas Filipino workers (OFWs) and non-working spouses. The minimum monthly contribution for voluntary members is Php 200, and the maximum is Php 5,000.
Members can make voluntary contributions in addition to their regular donations to increase their savings and avail of PAG-IBIG’s benefits, such as housing loans and calamity loans. The interest rate on voluntary contributions is the same as regular contributions and will earn dividends over time.
Modified PAG-IBIG Contribution
The Modified PAG-IBIG 2 (MP2) contribution is an optional savings program that PAG-IBIG members can participate in to earn higher dividends. It is also known as MP2.
Generally, it is a separate savings program from the actual PAG-IBIG savings, and members participating in MP2 will have a different MP2 account. The program is only available to PAG-IBIG members who have contributed to the fund for at least 24 months.
The minimum MP2 contribution is Php 500, and the maximum is Php 5,000 per month. The interest rate on MP2 contributions is higher than the regular PAG-IBIG contributions and is determined annually by the PAG-IBIG Board of Trustees. The interest rate for 2021 was 6.12%, which is higher than the standard savings interest rate of 3.5%.
Unlike voluntary contributions, MP2 contributions are refundable and withdrawable. However, members must keep their MP2 savings for at least five years to earn the interest. Early withdrawals or terminations will result in lower interest rates.
CHECK: Can I Withdraw my PAG IBIG Contribution?
Payment Option Details
PAG-IBIG contributions can be paid through different payment channels, such as over-the-counter payments, online payments, and salary deductions. Employers are required to deduct the employees’ contribution from their monthly salary and remit the amount to PAG-IBIG Fund.
Self-employed individuals and voluntary members can pay their contributions directly to PAG-IBIG through over-the-counter or online payments.
Are there any Penalties for Late PAG-IBIG Contributions?
Late payments of PAG-IBIG contributions may result in penalties and other fees.
For employers, a penalty of 1/20 of 1% per day is imposed on the amount due until the contribution is paid in full.
Self-employed individuals and voluntary members who fail to pay their contributions on time will be charged a penalty of 1% per month based on the unpaid amount.
Frequently Asked Questions
Who is required to contribute to the PAG-IBIG Fund?
All employees, whether in the government or private sector, must contribute to the PAG-IBIG Fund. Self-employed individuals and voluntary members can also contribute to the fund.
What are the benefits of contributing to the PAG-IBIG Fund?
Contributing to PAG-IBIG Fund provides members with savings that they can use to avail of housing loans, calamity loans, and other benefits. The program also offers competitive interest rates on savings and dividends and access to the MP2 program for higher returns on investment.
Can I withdraw my PAG-IBIG contributions?
Regular PAG-IBIG contributions are refundable and withdrawable after 20 years of membership, provided the member has no outstanding loans or obligations. Voluntary contributions and MP2 contributions, however, are non-refundable and non-withdrawable, except in cases of retirement, disability, or death.
Conclusion
No doubt, PAG-IBIG Fund is a valuable savings program that provides members with housing assistance and other benefits. All employees and self-employed individuals must contribute to PAG-IBIG Fund to avail of its services.
The introductory PAG-IBIG contribution rate is 2% of the member’s monthly salary, with a maximum monthly compensation of Php 5,000. By understanding how much PAG-IBIG contributions are and the different payment options available, members can maximize the benefits they can receive from the program.
