GOVERNMENT MANDATED

BENEFITS POLICY

HR-PP-031
 DEFINITION
The Government Mandated Benefits Policy
is designed to document Offshoring Inc’s
compliance to government legislation on
benefits to be enjoyed by everyone employed
in the private sector.
1.1 SOCIAL SECURITY SYSTEM is the
protection which society provides for its
members against economic and social
distress caused by the loss of substantial
reduction of earnings resulting from illness,
maternity injury, unemployment, old age and
death. The term social insurance derives
from the fact that the system is a broad scale
risk sharing arrangements among the
members of a community.
1.2 PHILIPPINE HEALTH
INSURANCE/PHILHEALTH
is an integrated and comprehensive
approach to health development
institutionalized by the government.
Philhealth endeavors to make essential
goods, health and other social services
available to all its members at affordable
cost. Priority for the needs of the
underprivileged, sick, elderly, disabled,
women, and children shall be recognized.
1.3 PAG-IBIG FUND / HOME DEVELOPMENT
MUTUAL FUND is an off shoot of
constitutional mandate on the promotion of
public welfare through ample social services,
as well as humanist commitment to the
interest of the working groups, in relation
particularly to their need for decent shelter.
Pag-ibig fund is a system of employee-
employer contributions for housing purposes.
1.4 13th MONTH PAY is mandated to augment
income to cover the additional expenses
brought about the December Holiday season.
13th month shall be received by all
employees who have worked at least one
month within a calendar year. It should be
released not later than Dec 20th of each
year.
1.5 STATUS OF EMPLOYMENT - Offshoring has two types of status
of employment, which was designed to provide flexibility to
outsourced staff in terms of handling their taxes. As a
consequence, treatment of government mandated benefits
particularly that of SSS, Phil-health and Pag-ibig vary
depending on the status.

1.5.1 EMPLOYEE STATUS – company is obliged to withhold

tax based on tax table and employee share for SSS, Phil-health
and Pag-ibig.

1.5.2 CONSULTANT STATUS – company is obliged to

withhold 10% tax for those who earn Pesos 720,000 or below
for one year and 15% for those who earn above Pesos 720,000
for one year. The company will not withhold the employee’s
share for SSS, Phil-health and Pag—ibig. The corresponding
employer share for SSS, Phil-health and Pag-ibig shall however
be added on to the employee’s pay.
 2. SCOPE

The policies & procedures embodied

herewith shall cover all bona fide
employees of Offshoring Inc.
 3. POLICY
3.1 SOCIAL SECURITY SYSTEM
3.1.1 Employee’s Contributions. – Offshoring shall deduct on a
semi-monthly basis and withhold from the salary of staff on
employee status the employee’s contribution based on the
SSS table of contributions
3.1.2 Employer’s Contributions. – Offshoring shall pay the
employer’s share for SSS contributions directly remit it to
SSS for staff on employee status and directly to staff on
consultant status via inclusion of such amount to their semi-
monthly salaries.
3.1.3 Offshoring shall remit contribution to an authorized
collection bank or directly to SSS monthly. Upon payment of
the contribution the company shall submit a contribution list
or form R3 to SSS.
3.1.4 Availment of various benefits under SSS can be seen in SSS
official website http://www.sss.gov.ph/sss/index.html.
3.2 PAG-IBIG FUND / HOME DEVELOPMENT MUTUAL FUND
3.2.1 Offshoring shall deduct from staff on employee status
Pesos 100 for their Pag-big contribution.
3.2.2 Offshoring shall only provide the mandatory counterpart of
Pesos 100 per employee.
3.2.3 If the employee wants to increase his monthly contribution
to Pag-ibig fund, he may do so by informing the payroll
master.
3.2.4 Employee who decided to increase his monthly
contribution has an option to shoulder the increase in
employer contribution as well.
3.2.5 The employer counterpart of Pesos 100 for Pag-ibig
contribution will be included to staff under professional
status semi monthly salary.
3.2.6 Availment of various benefits under Pag-ibig fund can be
seen in their official website
http://www.pagibigfund.gov.ph/mt_fac.htm.
3.3 PHILIPPINE HEALTH INSURANCE / PHILHEALTH
3.3.1 Philhealth provides all citizens with the mechanism to gain
financial access to health services, in combination with other
government health programs.
3.3.2 Employee’s Contributions. – Offshoring shall deduct on a semi-
monthly basis and withhold from the salary of staff on employee
status the employee’s contribution based on the Philhealth table
of contributions
3.3.3 Employer’s Contributions. – Offshoring shall pay the employer’s
share for Philhealth contributions directly remit it to Philhealth for
staff on employee status and directly to staff on consultant status
via inclusion of such amount to their semi-monthly salaries.
3.3.4 Together with the employer's counterpart, the premiums are
remitted to PhilHealth or at any accredited collecting bank/agent
on or before the 10th day of the month following the month
being paid for. ME-5 Form is used in remitting your premiums.
3.3.5 Payments are reported to PhilHealth on a monthly basis using
the revised Remittance Report Form (RF-1) on or before the
15th of the month following the applicable month.
3.3.6 Benefits of PhilHealth membership can be seen in their official
website http://www.philhealth.gov.ph/.
3.4 13th MONTH PAY
3.4.1 All employees, regardless of status, who have worked for
at least one (1) month are entitled to receive the 13th
month pay.
3.4.2 The 13th month pay is base on total gross salary received
by the employee from Jan 10th to Dec 25th payroll divided
by 12.
3.4.3 13th month pay of up to Pesos 30,000 is tax free, the
amount exceeding Pesos 30,000 is subject to tax as per
BIR’s regulation.
3.4.4 The 13th month pay of resigned or separated employee
shall be pro-rated and will be included in the employee’s
last pay. The formula will still be total compensation from
Jan 10th and or start date up to last payroll divided by 12.
 4. EFFECTIVITY AND
VALIDTY
This policy paper shall take effect
immediately after approval and should
be reviewed annually or as the need
arises.