If you’ve already explored other FilePino articles on company formation or business registration, you may have come across the idea that registering a business concludes with employer registrations with statutory agencies like SSS, PhilHealth, and Pag-IBIG Fund. However, each time a new employee joins your workforce, the process continues and recurs.
Proper employee registration ensures your compliance with the law and provides your employees with the benefits they are entitled to, such as social security, healthcare, and housing finance. Failure to register new employees properly and within the mandated timeframe can lead to penalties and legal complications. Thus, it is crucial to stay up-to-date with the required processes and ensure that your company or business remains in good standing with all relevant agencies.
In this article, we’ll provide you with a consolidated guide to registering new employees with the Bureau of Internal Revenue (BIR), Social Security System (SSS), Philippine Health Insurance Corporation (PHIC), and Home Development Mutual Fund (Pag-IBIG Fund). Keep reading and feel free to share your thoughts in the comments!
Why Register Your New Employees?
New employee registrations with the BIR, SSS, PhilHealth, and Pag-IBIG Fund are important for businesses and employers for a number of reasons, including but not limited to:
Compliance with Legal Requirements
As an employer, you must register your new employees with the BIR, SSS, PhilHealth, and Pag-IBIG Fund to meet legal obligations and ensure proper tax withholding and employees’ access to benefits. This registration ensures compliance with labor laws and other government regulations.
Employee Protection and Benefits
Employee registration with these agencies guarantees your employees’ access to essential benefits like healthcare, social security, and housing. It also guarantees their protection in times of illness, maternity, disability, and old age, while also ensuring proper tax deductions.
Good Standing and Avoidance of Penalties
You are legally required to register your new employees with the appropriate agencies to avoid penalties and interests accrued from late registrations and non-compliance. This also helps you maintain good standing with regulatory authorities and fulfills your employer responsibilities.
Deductible Expense Purposes
Your employer contributions to SSS, PhilHealth, and Pag-IBIG Fund can be claimed as deductible expenses, which result in reduced taxable income. This lowers the overall tax burden, creating a cost-saving opportunity for your business while ensuring that you fulfill your obligations toward employee benefits and welfare.
Accurate Record Keeping
Proper employee registration helps you maintain accurate and up-to-date records for tax and benefit purposes. This makes it easier to track employee benefits, ensure compliance, and facilitate the smooth processing of claims, thus contributing to the efficient operation of both your business and workforce.
How to Register New Employees with BIR
The Bureau of Internal Revenue (BIR) is the tax authority in the Philippines tasked with regulating taxation and collecting internal revenue taxes. It mandates the resident citizens earning income from both domestic and international sources to file their income tax returns and remit taxes to the government accordingly.
New Employees Without TIN
For new employees without a Taxpayer Identification Number (TIN) yet, you need to require them to accomplish and file BIR Form 1902 – Application for Registration For Individuals Earning Purely Compensation Income (Local and Alien Employee) to the BIR Revenue District Office (RDO) having jurisdiction over your company’s principal address.
In addition to the BIR form, supporting documents, such as a birth certificate or any valid ID indicating the employee’s complete name, birthdate, address, and signature; marriage certificate (for those married); birth certificates of dependents (if applicable), and company ID or employment certificate, are normally required.
Alternatively, if your company utilizes the BIR’s eReg platform and is classified as an active Withholding Tax Agent for Compensation Earners, you can simply log in to your account and access the eTIN module to issue new TINs.
New Employees With Existing TIN
If a new employee already has an existing TIN from his or her previous employer, and it is registered with the same RDO as your company, either the employee or your HR personnel must submit an accomplished BIR Form 2305 – Certificate of Update of Exemption and of Employer and Employee’s Information to update his or her information.
However, if the new employee’s TIN was issued by the previous employer under a different RDO, he or she must accomplish and file BIR Form 1905 – Application for Registration Information Update, Correction, or Cancellation with the RDO where the previous employer is registered.
How to Register New Employees with SSS
Under the “Social Security Act of 1997” (R.A. 8282), all private sector employees must register with the Social Security System (SSS), which provides social security protection for them and their families in cases of disability, sickness, old age, death, and other circumstances. Public or government employees, on the other hand, are covered by the Government Service Insurance System (GSIS), which serves the same purpose.
Both the employer and employee are required to remit monthly contributions to SSS. According to SSC Resolution No 751-S 2022, the SSS contribution rate for 2023 is set at 14% (and will increase to 15% by 2025), with 9.5% covered by the employer and 4.5% by the employee, based on the Monthly Salary Credit (MSC) ranging from PHP 4,000 to the maximum MSC of PHP 30,000.
New Employees Without SSS Number
For new employees without an SSS number, you must require them to register for membership at the SSS servicing branch where your company is registered or online via the SSS official website. Once the SSS number is secured, collect this information along with other details to complete the SSS Form R1A – Employment Report.
New Employees With Existing SSS Number
For new employees who are already SSS members, simply obtain their SSS numbers and complete the SSS Form R1A. The form requires other details, such as birth dates, employment start dates, monthly salary, and job titles, which must then be submitted to the SSS servicing branch.
How to Register New Employees with PhilHealth
Under the National Health Insurance Act of 1995 (R.A. 7875), all employees, whether public or private, are required to register for membership and make monthly contributions to the Philippine Health Insurance Corporation (PhilHealth).
PhilHealth offers health and hospitalization benefits to members and their dependents, helping cover medical expenses. According to PhilHealth Circular No. 2019-0009, the premium rate for 2023 is 4.5%, set to rise to 5% by 2024-2025, with the monthly contribution equally split between employers and employees.
New Employees
Each newly hired employee, whether already a PhilHealth member or not, must fill out and sign a PhilHealth Member Registration Form (PMRF). Existing members, however, must submit their PhilHealth ID number.
Employers
As an employer, you must accomplish and file PhilHealth ER1 – Employer Data Record, together with your new employees’ PMRFs with the respective PhilHealth servicing branch within 30 days from the hiring date.
How to Register New Employees with Pag-IBIG Fund (HDMF)
Established under P.D. 1530, the Home Development Mutual Fund (HDMF), also known as the Pag-IBIG (Pagtutulungan sa Kinabukasan, Ikaw, Bangko, Industriya, at Gobyerno) Fund, is a government-owned and -controlled corporation (GOCC) under the Department of Human Settlements and Urban Development (DHSUD) involved in mobilizing provident funds primarily for housing finance.
The Pag-IBIG Fund is a nationwide, tax-exempt mutual savings system for both private and government employees, as well as other earning groups, with employers matching mandatory contributions. In 2024, Pag-IBIG contribution rates increased by 100% (PHP 200), and for those earning over PHP 1,500 monthly, the personal share now rises to 2% of their income.
New Employees
New employees are required to undergo the HDMF Online Membership Registration through the Virtual Pag-IBIG facility to become members of the Pag-IBIG Fund. Alternatively, they may also visit the respective Pag-IBIG Fund servicing branch for the registration. Please note that they must be registered with the SSS first before they can register with the Pag-IBIG Fund.
Employers
You can submit the list of your new employees by filling out the Member’s Contribution Remittance Form (MCRF) and marking the new employees as NH (Newly Hired) when manually filing the monthly Pag-IBIG Fund contributions or accomplishing it online through the online web portal.
In the end, new employee registrations with the BIR, SSS, PhilHealth, and Pag-IBIG Fund are an imperative step for employers to ensure legal compliance, provide employee benefits, and maintain proper records—ultimately supporting the growth and welfare of your business and workforce.
… and you might just need our assistance.
At FilePino, we simplify the process of registering companies, ensuring compliance with all legal requirements. Our team of experts provides end-to-end support — from company registration to regulatory compliance — so you can focus on your investments and growth strategies.
Need assistance with new employee registrations with BIR, SSS, PhilHealth, and Pag-IBIG Fund? Set up a consultation with FilePino today! Call us at (02) 8478-5826 (landline) and 0917 892 2337 (mobile) or send an email to info@filepino.com.