Pag-IBIG contribution 2026: rates, ₱10,000 cap and employer share

For 2026, Pag-IBIG Fund (HDMF) contributions for employed members are 2% of monthly compensation from the employer and 2% from the employee (1% if the employee earns ₱1,500 or less). Contributions are computed on a maximum monthly fund salary of ₱10,000, so the mandatory maximum is ₱200 from the employee and ₱200 from the employer each month.

The ₱10,000 cap took effect in February 2024 under HDMF Circular No. 460, doubling the previous ₱5,000 cap. Verify current rules on the Pag-IBIG Fund website before changing payroll tables.

Pag-IBIG contribution rates at a glance

How to compute Pag-IBIG contributions

1. Take the employee's monthly compensation.
2. Cap it at ₱10,000 for the computation.
3. Apply the employee rate (1% or 2%) and the employer rate (2%).

Sample Pag-IBIG computations

Most employees in medium and large companies earn above ₱10,000, so in practice most rows in your payroll will show ₱200 and ₱200. The exceptions are low-salary and part-month employees, which is where errors usually hide.

Voluntary and upgraded contributions

Employees may choose to contribute more than the mandatory amount, for example to grow their savings or qualify for a larger housing loan. Employers may also agree to contribute more as a benefit. Your payroll system should let you record:

• The mandatory employee and employer shares
• Any voluntary additional employee contribution, with the employee's written authorization
• Any additional employer contribution under company policy

Keep voluntary amounts separate in reports so you can show the mandatory figures for compliance and the voluntary amounts for the employee's records.

Pag-IBIG loans and payroll deductions

Employees with Pag-IBIG multi-purpose, calamity or housing loans repay them through salary deduction. Payroll should carry each loan as a scheduled deduction with a balance, start date and end date, and remit loan amortizations separately from contributions. When an employee resigns, include the remaining loan obligations in your final pay process and coordinate with Pag-IBIG on how the balance will be settled.

Remittance controls for large employers

Because Pag-IBIG amounts look small per employee, they are often reviewed less carefully than SSS or tax. Across thousands of employees and several companies, the totals are significant. Practical controls:

1. Reconcile every month. Total employee and employer contributions on the remittance list should equal the payroll register amounts for the month, by employer.
2. Reconcile loans separately. Compare loan amortizations deducted with the loan schedules on file, and investigate employees whose deduction stopped without a fully paid status.
3. Check new hires and separations. New employees need their Pag-IBIG MID number recorded before the first remittance; separated employees should drop off from the following month.
4. Keep proof of payment per employer and month, linked to the payroll period, so you can answer member inquiries quickly.
5. Watch for agency updates. When the fund salary cap or rates change, update the payroll table with an effective date and test one cutoff before the change applies.

Employees also ask HR about voluntary savings programs such as MP2. If your company facilitates them through payroll deduction, treat them as authorized voluntary deductions with their own remittance and reporting, separate from mandatory contributions.

Common Pag-IBIG mistakes

• Not applying the ₱10,000 cap, or still using the old ₱5,000 cap.
• Mixing voluntary and mandatory amounts in one field, which complicates reporting.
• Missing loan amortizations after a payroll system change or a branch transfer.
• Remitting under the wrong employer in a group of companies.

Handling Pag-IBIG in payroll software

Configure the rates and cap as table values with an effective date, keep loans as scheduled deductions with balances, and produce contribution and loan remittance lists per employer. Cirquolus Payroll includes SSS, PhilHealth, Pag-IBIG and withholding tax workflows within a payroll approval process.

Complete your statutory checklist with the SSS and PhilHealth guides, or follow the full process in how to compute payroll in the Philippines.

Frequently asked questions

How much is the Pag-IBIG contribution in 2026?

For employees earning more than ₱1,500 a month, it is 2% from the employee and 2% from the employer, computed on a maximum of ₱10,000. The mandatory maximum is ₱200 each.

Is Pag-IBIG contribution capped at ₱200?

The mandatory contribution is effectively capped at ₱200 per side because of the ₱10,000 maximum fund salary. Employees can voluntarily contribute more.

Is the employee's Pag-IBIG contribution taxable?

The mandatory employee contribution is excluded from taxable compensation. Treat voluntary contributions above the mandatory amount according to current BIR rules and your adviser's guidance.

When did the Pag-IBIG contribution increase?

The maximum fund salary rose from ₱5,000 to ₱10,000 in February 2024, which raised the maximum mandatory contribution from ₱100 to ₱200 per side.