A) What is SSS?
The Social Security System (SSS) is the Philippines’ social insurance program that provides members with benefits for retirement, disability, sickness, maternity, and death. It is mandatory for locally employed individuals and voluntary for Overseas Filipino Workers (OFWs). Contributions build up your credited years of service and affect your pension payout.
B) How SSS Contributions Are Calculated
For OFWs, the contribution rate is 15% of your Monthly Salary Credit (MSC), which is based on your reported income.
The MSC can range from PHP 8,250 to PHP 35,000.
At the maximum MSC of PHP 35,000, the monthly contribution is PHP 5,250.00 (≈ CAD 125.00).
At the minimum MSC of PHP 8,250, the monthly contribution is PHP 1,237.50 (≈ CAD 29.46).
C) For OFWs Who Have Not Contributed in a While
SSS rules do not allow paying for missed months in past years. However, you can resume contributions starting from the month you re-register or update your records. If you have gaps, you can still qualify for pension benefits as long as you meet the minimum eligibility criteria.
D) How SSS Pension Is Calculated
The monthly retirement pension is computed based on the highest of the following:
PHP 3,000 minimum monthly pension (for 20+ credited years of service).
PHP 1,000 + 20% of AMSC + 2% of AMSC × (CYS − 10).
40% of your AMSC.
Where:
AMSC (Average Monthly Salary Credit): The average of your highest 60 Monthly Salary Credits, from any period in your history.
CYS (Credited Years of Service): At least one monthly contribution in a year counts as one credited year.
E) Strategy for OFWs to Maximize Pension and Minimize Cost
Since the pension formula is based on the highest 60 months (5 years) of contributions, an OFW can maximize pension benefits by:
Paying the maximum contribution (MSC = PHP 35,000) for any 60 months (not necessarily consecutive).
For all other years, making just one monthly contribution at the minimum MSC to add a credited year.
Repeating step 2 for as many years as possible to increase CYS.
Example in PHP and CAD (at PHP 42 = CAD 1):
Scenario A: 5 years max + 15 years min (1 month/year)
Pension: PHP 15,000/month (≈ CAD 357.14)
Total Contributions: PHP 333,562.50 (≈ CAD 7,941.96)
Scenario B: 20 years max monthly
Pension: PHP 15,000/month (≈ CAD 357.14)
Total Contributions: PHP 1,260,000.00 (≈ CAD 30,000.00)
Result: Same pension, but Scenario A costs over PHP 926,000 (≈ CAD 22,048) less.