Number and Algebra

Insurance and contributions: PhilHealth, SSS, Pag-IBIG

Matematikang pampinansyal

Insurance at kontribusyon: PhilHealth, SSS, Pag-IBIG

Read a payslip's mandatory deductions as percentages with caps, then see how insurers use probability and expected value to set premiums.

Where it fits

Earning Money and Percentages · Term 1 · Weeks 1–2
Random Variables · Term 2 · Week 7

Competencies

gm11.t1.w2.c1 Solve problems involving salaries, wages, benefits, and deductions (tax computations, overtime pay, and gross and net incomes) using appropriate technology.
gm11.t2.w7.c2 Calculate the expected value, variance, and standard deviation of discrete random variables.

The data

Mandatory contributions on a ₱20,000 monthly salary
Program	Rule	Employee share	Employer share
SSS	15% of salary credit (5% employee, 10% employer)	₱1,000	₱2,000
PhilHealth	5% of basic salary, split equally	₱500	₱500
Pag-IBIG	2% each, salary base capped at ₱10,000	₱200	₱200
Total		₱1,700	₱2,700

Employee share by Program

Source: Representative 2026 figures for classroom use; check current official rates before using for real decisions. Contribution schedules change; rates shown follow the 2025 schedules.

Scenario and worked example

Why is my take-home pay smaller?

Engage

Kuya Dan's first payslip shows a ₱20,000 gross salary but ₱18,300 net. He wants to know where ₱1,700 went, and whether 'the government is taking my money'.

Worked example: the deductions

Explain

\text{SSS} = 0.05 \times 20{,}000 = 1{,}000

\text{PhilHealth} = \tfrac{1}{2}(0.05 \times 20{,}000) = 500

\text{Pag-IBIG} = 0.02 \times 10{,}000 = 200 \;(\text{capped base})

\text{Net} = 20{,}000 - 1{,}700 = 18{,}300

What the money buys

Elaborate

These are social insurance: many people pay small amounts so that the few who get sick, retire or lose a home get large benefits. Private insurers price the same idea with expected value:

E(\text{payout}) = \sum (\text{benefit} \times \text{probability})

Reading a premium

Explain

Expected payout is the fair price of the risk.
Premium = expected payout + expenses + profit margin.
Younger, healthier members have lower probabilities and lower premiums.

Discuss in class

Which deduction is a flat amount in practice and why?
Is PhilHealth 'fair' to someone earning ₱100,000 compared with someone earning ₱20,000?
A policy costs ₱3,000 and its expected payout is ₱1,000. Why would anyone buy it?

Problems

5 problems · check your answer, then open the solution

Problem 1 Basic

PhilHealth premiums are 5% of monthly basic salary, shared equally by employee and employer. For a ₱25,000 salary, how much is deducted from the employee's pay?

Your answer (₱)
Show step-by-step solution
1. Total premium: $0.05 \times 25{,}000 = 1{,}250$ .
2. Employee share (half): $1{,}250 \div 2 = 625$ pesos.
Answer: 625 ₱
Problem 2 Standard

The SSS contribution rate is 15% of the monthly salary credit, with the employee paying 5% and the employer 10%. For a ₱20,000 salary credit, how much does the employer pay?

Your answer (₱)
Show step-by-step solution
1. Employer share: $0.10 \times 20{,}000 = 2{,}000$ pesos.
2. (Employee share: $0.05 \times 20{,}000 = 1{,}000$ ; total $3{,}000$ .)
Answer: 2000 ₱
Problem 3 Standard

A one-year term life policy pays ₱500,000 if the insured dies within the year. Insurers estimate the probability of death for a healthy 30-year-old at 0.002. What is the expected payout per policy?

Your answer (₱)
Show step-by-step solution
1. Expected value $= 500{,}000 \times 0.002 + 0 \times 0.998$ .
2. $E = 1{,}000$ pesos.
3. If the premium is ₱3,000, the insurer expects about ₱2,000 per policy for expenses, reserves and profit.
Answer: 1000 ₱
Problem 4 Standard

Pag-IBIG contributions are 2% from the employee and 2% from the employer, but only on the first ₱10,000 of monthly salary. For an employee earning ₱18,000, how much is deducted from pay?

Your answer (₱)
Show step-by-step solution
1. The salary base is capped at ₱10,000.
2. Employee share: $0.02 \times 10{,}000 = 200$ pesos.
Answer: 200 ₱
Problem 5 Challenge Non-routine

A barangay micro-insurance plan charges ₱600 a year and pays ₱20,000 on a member's death. If 1,000 members join and the expected deaths are 12, what is the plan's expected surplus for the year?

Your answer (₱)
Show step-by-step solution
1. Premiums collected: $1{,}000 \times 600 = 600{,}000$ .
2. Expected payouts: $12 \times 20{,}000 = 240{,}000$ .
3. Expected surplus: $600{,}000 - 240{,}000 = 360{,}000$ pesos, before administrative costs.
Answer: 360000 ₱

Probability simulator More practice: Earning Money and Percentages More practice: Random Variables