|
[
Article
]
Share on
|
It's a lot more sensible than it appears at first glance (Part 1)
No, SURE! PayMaster is not screwing up your SSS deductions
Occasionally, some SURE! PayMaster users will call us in a panic, convinced that SURE! PayMaster is computing SSS deductions totally wrong. This article is for them, and for anyone who wishes to understand the underlying algorithms powering SURE! PayMaster's handling of SSS contributions.
To those who like their reading material short and sweet, we apologize for the length of this article. But it's meant to be a once-and-for-all reassurance to all possible users, so we need to be explicit and thorough.
This piece is intended to be a reference guide for all payroll officers in all Philippine private enterprises; it's meant to show you in exact detail how SURE! PayMaster computes SSS contributions.
And perhaps it can also serve as one more demonstration of the quality of thinking we practice at Balmori Software.
First, we reproduce the SSS Contribution table in effect as of this writing:
Range of Compensation
|
Employer's
Share SSS ER
|
Employee
Compensation
|
Employees
Share SSS EE
|
Total
|
| 1,000.00 - 2,249.99 |
160.00 |
10.00 |
80.00 |
250.00 |
| 2,250.00 - 2,749.99 |
200.00 |
10.00 |
100.00 |
310.00 |
| 2,750.00 - 3,249.99 |
240.00 |
10.00 |
120.00 |
370.00 |
| 3,250.00 - 3,749.99 |
280.00 |
10.00 |
140.00 |
430.00 |
| 3,750.00 - 4,249.99 |
320.00 |
10.00 |
160.00 |
490.00 |
| 4,250.00 - 4,749.99 |
360.00 |
10.00 |
180.00 |
550.00 |
| 4,750.00 - 5,249.99 |
400.00 |
10.00 |
200.00 |
610.00 |
| 5,250.00 - 5,749.99 |
440.00 |
10.00 |
220.00 |
670.00 |
| 5,750.00 - 6,249.99 |
480.00 |
10.00 |
240.00 |
730.00 |
| 6,250.00 - 6,749.99 |
520.00 |
10.00 |
260.00 |
790.00 |
| 6,750.00 - 7,249.99 |
560.00 |
10.00 |
280.00 |
850.00 |
| 7,250.00 - 7,749.99 |
600.00 |
10.00 |
300.00 |
910.00 |
| 7,750.00 - 8,249.99 |
640.00 |
10.00 |
320.00 |
970.00 |
| 8,250.00 - 8,749.99 |
680.00 |
10.00 |
340.00 |
1,030.00 |
| 8,750.00 - 9,249.99 |
720.00 |
10.00 |
360.00 |
1,090.00 |
| 9,250.00 - 9,749.99 |
760.00 |
10.00 |
380.00 |
1,150.00 |
| 9,750.00 - 10,249.99 |
800.00 |
10.00 |
400.00 |
1,210.00 |
| 10,250.00 - 10,749.99 |
840.00 |
10.00 |
420.00 |
1,270.00 |
| 10,750.00 - 11,249.99 |
880.00 |
10.00 |
440.00 |
1,330.00 |
| 11,250.00 - 11,749.99 |
920.00 |
10.00 |
460.00 |
1,390.00 |
| 11,750.00 - 12,249.99 |
960.00 |
10.00 |
480.00 |
1,450.00 |
| 12,250.00 - 12,749.99 |
1,000.00 |
10.00 |
500.00 |
1,510.00 |
| 12,750.00 - 13,249.99 |
1,040.00 |
10.00 |
520.00 |
1,570.00 |
| 13,250.00 - 13,749.99 |
1,080.00 |
10.00 |
540.00 |
1,630.00 |
| 13,750.00 - 14,249.99 |
1,120.00 |
10.00 |
560.00 |
1,690.00 |
| 14,250.00 - 14,749.99 |
1,160.00 |
10.00 |
580.00 |
1,750.00 |
| 14,750.00 - 15,249.99 |
1,200.00 |
30.00 |
600.00 |
1,830.00 |
| 15,250.00 - 15,749.99 |
1,240.00 |
30.00 |
620.00 |
1,890.00 |
| 15,750.00 - 16,249.99 |
1,280.00 |
30.00 |
640.00 |
1,950.00 |
| 16,250.00 - 16,749.99 |
1,320.00 |
30.00 |
660.00 |
2,010.00 |
| 16,750.00 - 17,249.99 |
1,360.00 |
30.00 |
680.00 |
2,070.00 |
| 17,250.00 - 17,749.99 |
1,400.00 |
30.00 |
700.00 |
2,130.00 |
| 17,750.00 - 18,249.99 |
1,440.00 |
30.00 |
720.00 |
2,190.00 |
| 18,250.00 - 18,749.99 |
1,480.00 |
30.00 |
740.00 |
2,250.00 |
| 18,750.00 - 19,249.99 |
1,520.00 |
30.00 |
760.00 |
2,310.00 |
| 19,250.00 - 19,749.99 |
1,560.00 |
30.00 |
780.00 |
2,370.00 |
| 19,750.00 and up |
1,600.00 |
30.00 |
800.00 |
2,430.00 |
in effect as of April 2019.
Now let's proceed with an example:
Employee: Jose Santos
Monthly Salary: P22,000
Pay frequency: 2x a month
Semi-monthly pay: P11,000
SURE! PayMaster computes SSS Contributions based on the actual earnings of employees at particular points in time, based on the SSS provided table. Thus, during the first pay period, SURE! PayMaster sees that Mr. Santos earned a basic pay of P11,000 (one-half of his monthly pay of P22,000).
Following the prescribed SSS Table, Mr. Santos's applicable deduction is P440.00, since the pay he earned is between P10,750.00 and P11,249.99.
If Mr. Santos resigns or becomes inactive at the end of this first pay period, then SURE! PayMaster has correctly deducted what the SSS prescribes.
To put it another way: How much did Mr. Santos earn for this entire month? P11,000. Isn't his total monthly basic pay P22,000? Yes, but he resigned after the first pay period, hence he earned only P11,000. The basis therefore for computing his SSS contribution is P11,000.
If SURE! PayMaster would have assumed that Mr.Santos would complete a full month's employment and prorated the required total monthly SSS Contribution of P800.00, deducting only P400.00 for the first period, then his employer would be answerable to the SSS for the P40.00 (P440.00 - P400.00) differential.
Unless of course the employer can track him down - in Davao? Iloilo? Dubai? - and extract the P40.00. But you'll agree that that's not exactly an example of "a sound process."
Now on to the next scenario: Let's say that in actuality, Mr. Santos continues to be connected with his employer. Thus, on the second pay period, SURE! PayMaster:
- Sees that Mr. Santos has earned another P11,000 for the second pay period, for a total of P22,000 for the month
- Recomputes the applicable SSS deduction for the month, which is now P800.00, since total base pay earned for the month falls between P19,750.00 and up.
- Knows that Mr. Santos has previously been deducted P440.00; and therefore
- Deducts, for the second pay period, P360.00 (P800.00 - 440.00) as SSS Contribution.
You will appreciate how this is a more sensible approach than pro-rating the man's contribution at the half-month point, and then assuming, expecting, or hoping that he doesn't resign until month-end.
One other major reason for SURE! PayMaster's algorithm of computing SSS Cotributions on a pay period basis instead of pro rating the assumed one month contribution is this:
SSS contributions are based not only on base pay. The guidelines for computing SSS contribution list the following as basis for computing contributions:
- Salaries and Wages
- Overtime Pay
- Cost of Living Allowance (COLA)
- Emergency COLA
- Cash Value of Living Expenses
- Workers Compensation Benefit
- Bonuses, except Christmas Bonus
- Payment for Maternity Leave
- Payment for Sick Leave
- Payment for Vacation Leave
- Payment for Direct Labor or Indirect Labor
- Transportation, Board and Lodging Allowance
- Commissions
- Commission Advances
- Monthly Allowances
- Tuition, Matriculation and School Benefits
- Salaries Earned While on Board Foreign Vessel
- Superintendence Payment
- Share in a Project
Seeing that many of the above elements are variable on a per pay period basis, the SURE PayMaster algorithm makes sure that the proper SSS contributions are computed on a per pay period basis.
The above design approach to handling SSS deductions is also the same approach Balmori Software uses in computing HDMF contributions. To read about that in full detail, read Part 2 of this article here. -rcd
Share on
<<< Back to top >>>
|
|
Balmori Software Inc.