PhilHealth Contribution - Philippines Tax Glossary
Updated June 13, 2026
Definition
A mandatory health insurance premium paid to the Philippine Health Insurance Corporation (PhilHealth) under the Universal Health Care Act. The employee's share is excluded from taxable compensation.
PhilHealth contribution is the monthly premium of direct contributors under Republic Act No. 11223 (Universal Health Care Act), which funds the national health insurance program. From 2024, and still in 2026, the premium is 5% of monthly basic salary, computed on a monthly income floor of ₱10,000 and a ceiling of ₱100,000, so the total premium runs from ₱500 to ₱5,000 a month. For employed members, the employee and employer each pay 2.5%, while self-earning individuals, professionals and land-based migrant workers pay the full 5%. Contributions are mandatory for employees, including minimum wage earners, and the employee's share is excluded from gross income when computing income tax (NIRC §32(B)(7)(f)).
Why it matters
The employee share of PhilHealth contributions is excluded from taxable compensation, which lowers income tax for employees. For employees, it appears as a payroll deduction and on Form 2316. Self-employed individuals who use the 8% rate or the optional standard deduction do not claim it as a separate deduction. Paying on time also keeps the member's contribution record complete.
How it works
PhilHealth contributions are 5% of monthly basic salary, split equally between employee (2.5%) and employer (2.5%). Income below ₱10,000 a month is treated as ₱10,000, giving a minimum total premium of ₱500, and income above ₱100,000 is treated as ₱100,000, giving a maximum total premium of ₱5,000 (₱2,500 for each side). Self-earning individuals pay the full 5% of their declared income themselves. For employees, the employee share is excluded from gross compensation when computing taxable income (NIRC §32(B)(7)(f)).
Examples
Simple
An employee earning ₱25,000 monthly pays ₱625 PhilHealth contribution (2.5% employee share), reducing taxable income by ₱7,500 annually
Employee
A manager with ₱80,000 monthly salary pays ₱2,000 PhilHealth contribution (2.5% of ₱80,000), excluded from taxable compensation on Form 2316
Self employed
A freelance consultant earning ₱50,000 monthly pays ₱2,500 PhilHealth contribution (the full 5% of ₱50,000)
Business
A corporation with 50 employees paying ₱30,000 average salary contributes ₱37,500 monthly (2.5% employer share of total payroll)
Edge case
A land-based OFW earning the equivalent of more than ₱100,000 a month pays the maximum ₱5,000 monthly premium, the full 5% of the ₱100,000 ceiling, since migrant workers pay the whole premium
Common mistake
Assuming the employee share keeps rising with salary; above ₱100,000 a month it stays at ₱2,500, with the employer paying another ₱2,500
Common misconceptions
- Myth: Myth that PhilHealth contributions never affect income tax (the employee share is excluded from taxable compensation)
- Myth: Believing the employer pays the whole premium (employer and employee each pay 2.5%)
- Myth: Thinking contributions are calculated on gross pay (it's based on basic salary for employees)
- Myth: Assuming the premium keeps rising with income (it stops at ₱5,000 a month at the ₱100,000 ceiling)
- Myth: Believing OFWs are outside PhilHealth (land-based migrant workers are direct contributors who pay the full premium)
Questions people ask
What is PhilHealth contribution?
PhilHealth contribution is a mandatory 5% premium paid to the Philippine Health Insurance Corporation for universal health coverage. For employees it is split between employee (2.5%) and employer (2.5%), and the employee share is excluded from taxable compensation.
How much is PhilHealth contribution in 2026?
PhilHealth contribution is 5% of monthly basic salary, with a ₱10,000 income floor and a ₱100,000 ceiling, so the total premium is ₱500 to ₱5,000 a month. Employees pay 2.5% (₱250 to ₱2,500) while employers match this amount.
Can I deduct PhilHealth contributions from my taxes?
For employees, yes: the employee share is excluded from gross income, so it reduces taxable compensation on Form 2316 and Form 1700 (NIRC §32(B)(7)(f)). Self-employed individuals on the 8% rate or the optional standard deduction do not claim it as a separate deduction.
Who needs to pay PhilHealth contributions?
All employees, including minimum wage earners, and their employers pay premiums, as do self-earning individuals, professionals, land-based migrant workers and other direct contributors under the Universal Health Care Act.
When do I encounter PhilHealth contribution in tax filing?
PhilHealth contributions appear on payslips and on Form 2316 for employees, and in the employer's monthly PhilHealth remittance reports throughout the year.
How is PhilHealth contribution calculated for self-employed?
Self-employed individuals pay the full 5% of declared monthly income to PhilHealth, with a minimum of ₱500 (income of ₱10,000 or less) and a maximum of ₱5,000 (income of ₱100,000 or more).
What's the difference between PhilHealth and SSS contributions?
PhilHealth is health insurance (5% rate, ₱5,000 maximum monthly premium) while SSS is social security (15% rate, ₱5,250 maximum total contribution at the ₱35,000 maximum salary credit). Both are mandatory, and the employee shares of both are excluded from taxable compensation, but they serve different purposes.
Why is PhilHealth contribution important for taxes?
The employee share reduces taxable compensation peso for peso, which lowers income tax, while the premium itself funds health insurance coverage for you and your dependents.
What happens if I don't pay PhilHealth contributions?
Unpaid premiums remain collectible, and employers that fail to deduct and remit their employees' premiums face the penalties set in RA 11223 and its implementing rules. For employees, unremitted premiums also leave gaps in the contribution record.
Next steps
Learn more
Philippine Income Tax Calculator
BIR Form 2316 Guide
BIR Form 1701 Instructions
SSS Contribution Calculator
Pag-IBIG Contribution Guide
Self-Employed Tax Filing Guide
Employee Tax Deductions Checklist
Universal Health Care Act Compliance
Related content
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Taxpayer guides
BIR forms
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Sources & References (3)
Primary sources and the laws, regulations, and official issuances this page relies on. Each citation links directly to the issuing authority’s document.
- Philippine Health Insurance Corporation. “PhilHealth: 2024-2026 premium 5%, income floor P10,000 (min P500), ceiling P100,000 (max P5,000).” philhealth.gov.ph. Philippine Health Insurance Corporation, Premium Contribution Schedule (PA2025-0002 / PC2026-0001). Accessed .
- LawPhil Project (Arellano Law Foundation). “RA 11223 (Universal Health Care Act): full enacted text.” lawphil.net. Republic Act No. 11223, Universal Health Care Act. Accessed .