Payroll Philippines: Enhancements to SSS Contribution Calculations

Scope of Functions

In previous releases, employer and employee Social Security System (SSS) contributions were calculated based on an annualized figure that was divided by the number of payroll periods in the year to determine the period contribution amount.

As of this release, employer and employee SSS contributions will be calculated based on actual month-to-date earnings. Where there are multiple payroll periods within a month, SSS contributions for the payroll period are based on the amount an employee actually earns from the first day of the month up to the end-date of the payroll period. If payroll is run semi-monthly, SSS contributions are based on the employee's monthly salary earned to-date.

If an employee is paid semi-monthly and his or her pay reaches the maximum bracket in the SSS contributions table in the first half of the month, the system deducts the maximum contribution amount in the first half. This ensures that the correct contribution amount is paid for the month, and safeguards against employees not having sufficient funds to cover SSS contributions in the second half of the month.

Effects on Existing Data

For each payroll run performed in the same month, the system reads the amounts stored in the cumulated results table (CRT) and the internal table (IT) for that month. The system then checks the amounts against the brackets set up in the SSS Contributions table (V_T7PHSC) to determine the SSS contribution to be paid by the employer and employee.

Effects on Customizing

This enhancement represents a change in the way the system calculates SSS contributions, and does not require any configuration changes in Customizing.