Pag-IBIG Contribution 2026: Employer Guide for Cafés

By Robin Salvador, co-founder, Caffeine Brothers
Last updated: November 2, 2026

Quick answer: In 2026 the Pag-IBIG contribution for employees earning more than ₱1,500 a month is 2% from the worker and 2% from the employer, based on a maximum monthly fund salary of ₱10,000. So the most each side pays is ₱200 a month, ₱400 in total. Employees earning ₱1,500 or less pay 1%, and the employer still pays 2%. These rates come from HDMF Circular No. 460, in force since February 2024, and they still applied when we checked on November 2, 2026. Every full-time minimum wage café worker in Metro Manila hits the ₱10,000 cap, so the amount is a flat ₱200 each.

Pag-IBIG is the third government deduction on every payslip, after SSS and PhilHealth. We covered the other two in our SSS contribution table 2026 and PhilHealth contribution table 2026 guides. Pag-IBIG is the simplest of the three, but the 2024 change doubled the amount for most workers and some payroll templates and older guides still show ₱100. This article uses the law, the circular as summarised by two accounting firms, and news reports. Pag-IBIG’s own website showed a reCAPTCHA check to our research tools, so we could not read the circular there directly. This is general information, not legal or tax advice.

What is the Pag-IBIG contribution rate in 2026?

The rate depends on the employee’s monthly compensation. Section 7 of the Home Development Mutual Fund Law of 2009 (RA 9679), approved July 21, 2009, sets 1% for employees earning not more than ₱1,500 a month, 2% for employees earning more than ₱1,500, and 2% for all employers. The law capped the compensation used for the computation at ₱5,000 and let the Pag-IBIG Board of Trustees change that cap.

The Board raised the cap with HDMF Circular No. 460. According to Forvis Mazars Philippines, the circular was released on January 15, 2024 and took effect in February 2024, increasing the maximum fund salary from ₱5,000 to ₱10,000. PwC’s Philippine tax summary, last reviewed July 2, 2026, gives the same circular and the resulting maximum of ₱200 each for employers and employees. We found no newer circular or news report changing the rate or the cap in 2026.

What changed in February 2024?

Only the cap changed. The percentages in RA 9679 stayed the same, but the compensation they apply to doubled from ₱5,000 to ₱10,000. GMA News reported on January 18, 2024 that this doubled the usual contribution from ₱100 to ₱200 for the employee and from ₱100 to ₱200 for the employer. Pag-IBIG told GMA the rate had last been adjusted in 1986, and that the increase was first planned for 2021 but deferred several times, including at the request of the Employers’ Confederation of the Philippines.

You may still see ₱100 in older material. The 2023 edition of the DOLE Handbook on Workers’ Statutory Monetary Benefits says formally employed members contribute a minimum of ₱100 and employers match it with ₱100. That was written before Circular 460 took effect. For 2026 payroll, use the ₱10,000 cap.

How do you compute Pag-IBIG for daily-paid crew?

RA 9679 defines compensation as basic monthly salary plus mandated cost of living allowance. For crew paid by the day, convert the daily rate to a monthly figure first. The DOLE handbook gives suggested factors: daily rate × 313 ÷ 12 for workers who are not paid on rest days, and daily rate × 261 ÷ 12 for workers who do not work and are not paid on Saturdays and Sundays.

Under Wage Order NCR-28, which took effect September 26, 2026, the Metro Manila minimum is ₱755 a day for non-agricultural workers and ₱718 for retail and service establishments with 15 workers or fewer. At ₱718 × 313 ÷ 12 the monthly equivalent is ₱18,727.83. At ₱755 it is ₱19,692.92. Even on the five-day factor, ₱718 × 261 ÷ 12 is ₱15,616.50. All three are above ₱10,000, so the contribution is 2% of ₱10,000: ₱200 from the worker and ₱200 from the café.

The percentage only matters for part-timers and low earners. A part-time barista with ₱6,000 in monthly basic pay pays ₱120 and the café pays ₱120. A worker earning ₱1,500 or less pays 1% and the café pays 2%, so at ₱1,200 a month that is ₱12 and ₱24.

How much does Pag-IBIG cost a small café a year?

Because the cap applies to every full-time crew member, the cost is easy to budget. Each worker adds ₱200 a month to the café’s costs, or ₱2,400 a year. A café with six full-time crew pays ₱1,200 a month and ₱14,400 a year as employer share, and deducts the same amount from the crew’s pay. Together that puts ₱28,800 a year into the crew’s Pag-IBIG savings.

For a sense of scale, our Robusta beans cost ₱813 per kilo on November 2, 2026, or ₱8.13 for a 10 g cup. The ₱200 employer share per worker is about 24 cups of coffee a month.

Can the café deduct its share from the crew?

No. Section 7 of RA 9679 says that, notwithstanding any contract to the contrary, an employer shall not deduct, directly or indirectly, the employer’s contribution from its employees’ compensation, or otherwise recover it from them. The payslip should show only the employee share as a deduction.

Forvis Mazars’ summary of Circular 460 adds two rules that come up in small businesses. Members may save more than the minimum, but the employer share stays fixed unless the employer chooses to match. And when someone works for more than one employer, each employer contributes in proportion to the fund salary it pays.

Household helpers follow different rules. The same summary says that for a kasambahay, the employer pays 3% of fund salary up to ₱1,500 and 4% above that, and from ₱5,000 the employer and kasambahay each pay 2%.

When is the Pag-IBIG contribution due?

RA 9679 Section 23 leaves the remittance mechanism to the Pag-IBIG Board of Trustees. Security Bank’s Pag-IBIG payment help page, last updated June 10, 2026, lists the due dates for monthly employer contributions by the first letter of the employer or business name. The bank notes that the schedule can change under Pag-IBIG policies, so confirm your window with your Pag-IBIG branch or through Virtual Pag-IBIG.

What happens if a café pays late or does not pay?

Section 23 of RA 9679 makes the employer liable for the contributions and adds a penalty of 3% a month on the amounts payable, from the date they fall due until paid. Pag-IBIG can collect unpaid contributions the way taxes are collected under the National Internal Revenue Code. The worker keeps the right to benefits even if the employer did not remit.

As a simple illustration, a six-crew café owes ₱2,400 a month (₱1,200 employer share plus ₱1,200 deducted from crew). If one month is paid three months late, 3% a month is ₱216. Six months late is ₱432, and a year late is ₱864. These are our own simple-interest figures; Pag-IBIG’s actual computation may differ.

Section 25 goes further. Failure without lawful cause, or with fraudulent intent, to register employees or to collect and remit the employee savings and the employer counterpart is an offence punishable by a fine of not less than, and not more than twice, the amount involved, or imprisonment of up to six years, or both. For a corporation, the penalty falls on the board members and the president or general manager.

What do crew members get from Pag-IBIG?

Both shares go into the worker’s own savings. The DOLE handbook describes Pag-IBIG regular savings as earning annual dividends that members can withdraw at retirement or after 20 years, which is 240 monthly contributions. It also describes a multi-purpose loan and a calamity loan of up to 80% of total regular savings, including the employer counterpart and dividends, plus housing loans.

Dividends have been rising. GMA News reported on February 27, 2026 that Pag-IBIG declared ₱64.34 billion in dividends for 2025, a 98.6% payout of its ₱65.8 billion net income. The regular savings dividend was 6.62%, up from 6.60% for 2024, and the voluntary MP2 savings yield was 7.12%, up from 7.10%. Earlier that month GMA reported that member contributions reached ₱160.41 billion in 2025, up 21%, of which ₱66.80 billion were mandatory monthly contributions and ₱93.60 billion (58%) were voluntary.

A five-step Pag-IBIG checklist for café owners

1. Register every employee covered by SSS. Section 6 of RA 9679 makes Pag-IBIG coverage mandatory for all employees covered by SSS and their employers.
2. Use basic pay plus COLA as the base. Convert daily rates with the 313 or 261 factor, then cap the result at ₱10,000.
3. Apply the right percentage. 1% employee and 2% employer at ₱1,500 or less; 2% each above that; ₱200 each at the cap.
4. Deduct only the employee share. The café pays its own share from its own funds.
5. Remit inside your window. Check your due dates with Pag-IBIG and keep proof of payment for each month.

If you are setting up payroll for the first time, our guides to 13th month pay computation and final pay computation cover the other year-end and exit items.

Frequently asked questions

Sources

1. Republic Act No. 9679, Home Development Mutual Fund Law of 2009. LawPhil. Approved July 21, 2009. Used for coverage (Sec. 6), rates, compensation definition and the employer share rule (Secs. 4 and 7), remittance and the 3% monthly penalty (Sec. 23) and criminal penalties (Sec. 25)
2. PAG-IBIG increases the Maximum Fund Salary and shares new monthly contribution rates in the Philippines. Forvis Mazars Philippines, January 25, 2024. Used for HDMF Circular 460: release date, February 2024 effectivity, ₱10,000 cap, rates, kasambahay, voluntary and multiple-employer rules
3. Philippines: Individual, Significant developments. PwC Worldwide Tax Summaries, last reviewed July 2, 2026. Used to confirm Circular 460 and the ₱200 maximum shares
4. Pag-IBIG to double monthly contribution rate in February. GMA News, January 18, 2024. Used for ₱100 to ₱200, the 1986 last adjustment and the deferrals
5. Pag-IBIG members’ contributions hit record high P160.4B in 2025. GMA News, February 11, 2026. Used for 2025 collections
6. Pag-IBIG announces record P64.34B dividend for 2025; regular savings earn 6.62%, MP2 yields 7.12%. GMA News, February 27, 2026. Used for dividend rates and payout
7. What are the due dates for Pag-IBIG payments?. Security Bank Help Center, updated June 10, 2026. Used for the due-date windows by employer name
8. Handbook on Workers’ Statutory Monetary Benefits, 2023 edition. DOLE Bureau of Working Conditions, via Labor Law PH. Used for the 313 and 261 factors and the description of Pag-IBIG savings and loans
9. DOLE: P60 wage hike in NCR takes effect Sept. 26. GMA News, September 26, 2026. Used for the ₱755 and ₱718 NCR rates
10. Caffeine Brothers Robusta coffee beans. Price read from the WooCommerce Store API on November 2, 2026

Stocking an office pantry or a café? Our wholesale coffee comes in 10 kg boxes with free Metro Manila delivery, and coffee drip bags work well for staff rooms. Café owners can also use financial fundamentals for café owners for costing, or contact us for a quote.