Law Summary
Employee's Contribution and Employer's Deduction (Section 18)
- Employers are mandated to deduct from the employee’s monthly salary, wage, compensation, or earnings the employee’s contribution to the SSS starting from the last day of the calendar month when compulsory coverage begins and every month thereafter.
- Contributions are based on a prescribed schedule effective January 1, 1980, which categorizes salary brackets, monthly salary credits, and the corresponding monthly contributions from both employer and employee.
- Salary brackets range from a minimum compensation of P25 up to a maximum salary of P1,000 and over.
- The contributions vary according to salary with both employer and employee sharing the contribution as shown in the schedule.
Maximum Covered Earnings Limit
- The maximum covered earnings or compensation for all SSS members is capped at P1,000 per month as per the schedule.
- This ceiling applies unless the Social Security Commission enacts rules and regulations to alter it, based on actuarial calculations and adjustment of benefit rates.
Employer's Obligations
- Employers are required to issue receipts for all contributions deducted from employees’ compensation.
- Alternatively, such deductions must be clearly indicated on the employee’s pay envelopes to ensure transparency and accountability.
Effectivity
- The amendatory provisions under Presidential Decree No. 1806 took effect immediately upon its signing on January 16, 1981.
Important Legal Concepts
- Reinstitutes the maximum compensation limit for SSS contributions that was previously omitted.
- Provides a definitive contribution schedule ensuring uniformity and clarity.
- Upholds the principle of employer responsibility in withholding contributions and maintaining proof of payment.
- Allows the Social Security Commission discretion to adjust the maximum compensation ceiling based on sound actuarial and policy considerations.