Most people check one number on a payslip and file it away. The other lines are where errors live, and an error repeated for a year is expensive and tedious to unwind.
This walks through the structure. Contribution rates and tax brackets change, so verify the current figures against the agency sites before concluding something is wrong.
Separate gross, taxable and net
Gross pay is everything earned before deductions. Taxable income is gross minus the mandatory contributions and any non-taxable allowances. Net pay is what reaches your account.
Tax is calculated on taxable income, not on gross. Getting these three straight makes the rest of the payslip readable.
- Gross includes overtime, night differential and allowances.
- De minimis benefits within the limit are not taxable.
- Thirteenth month pay is tax exempt up to the annual cap.
Check the mandatory contributions
Four deductions are mandatory: SSS, PhilHealth, Pag-IBIG and withholding tax. The first three have an employer share that should not appear as your deduction.
Each is based on a salary bracket or a percentage with a cap, and each is published as a table. Find your bracket and compare.
- SSS follows a monthly salary credit table.
- PhilHealth is a percentage of basic pay, split with the employer.
- Pag-IBIG has a low standard contribution unless you opted to raise it.
- Your share only. The employer share is not deducted from you.
Sanity check the withholding tax
Withholding tax is an estimate of your annual liability spread across pay periods. It is normal for it to be slightly off and to be corrected at year end.
What is not normal is tax withheld on an income below the annual exemption threshold, or a sudden large change with no change in pay.
- Compare against the current BIR withholding table for your period.
- A new allowance or a bonus will move it legitimately.
- Annualisation at year end can produce a large single adjustment.
Question anything else
Beyond the four mandatory items, every deduction needs your written consent. Loan repayments, union dues and cooperative contributions are legitimate only if you agreed to them.
- Ask for the basis in writing for any deduction you did not authorise.
- Cash bond and uniform deductions have legal limits.
- Losses and shortages cannot simply be deducted without due process.
Confirm the money was actually remitted
A deduction on the payslip is a promise. The record at the agency is the fact. These occasionally differ, and you will only find out when you file a claim.
- Check your SSS contributions online once a year.
- Check the Pag-IBIG record before applying for any loan.
- Keep payslips for at least three years as evidence.
In closing
Check the deductions properly twice a year and keep every payslip. They are the evidence when a contribution does not show up in your record.
Separately, log in to the SSS and Pag-IBIG portals once a year and confirm the payments were actually posted. Deducted and remitted are not the same thing.