This is how to compute Pag-ibig contributions to be paid by employees and employers.

Monthly Salary Employee Employer
of Employee Contribution     Share
1,500 pesos and below1% x Salary 2% x Salary
1,501 to 5,000 pesos 2% x Salary 2% x Salary
5,000 pesos100 pesos 100 pesos
More than 5,000 pesos     100 pesos 100 pesos

Bakit 100 pesos pa rin ang contribution ng Employee earning more than 5,000 pesos?
It's because the Pag-ibig law has set 5,000 pesos as the maximum monthly salary to be considered in the computation.

Dahil bihira naman na ngayon ang sumasahod ng less than 5,000 pesos a month, 
karamihan ng monthly Pag-ibig contribution ay 100 pesos.

The same with the employer share, kalimitan ay 100 pesos.

What kinds of compensation are included in the Monthly Salary for computation?
All types of compensation received as payment for service or work done for the month, in whatever form that can be expressed in terms of money, whether paid by time, by piece, by task, or on commission basis, or any other method, whether under written or unwritten contract. 

These include:
Basic salary
Mandated COLA

This means all compensation given to the employee as payment for service or work done: Overtime pay, holiday pay, night differential pay, incentive pay, rice allowance, transportation allowance, birthday pay, etc.

Here are the relevant parts of the PAG-IBIG Fund Law:


Section 1. Rate of Contributions. Covered employees and employers shall contribute to the Fund based on the monthly compensation of covered employees as follows:

a. Employees earning not more than One thousand five hundred pesos (P1,500.00) per month – one percent (1 %).

b. Employees earning more than One thousand five hundred pesos (P1,500.00) per month -two percent (2%).

c. All employers – two percent (2%) of the monthly compensation of all covered employees.

The maximum monthly compensation to be used in computing employee and employer contributions shall not be more than Five thousand pesos (P5,000.00); Provided, that this maximum and the contribution rates may be fixed from time to time by the Board through rules and regulations adopted by it, taking into consideration actuarial calculations and rates of benefits. Provided further, that the foregoing rates shall likewise be the same for the self-employed and voluntary members.

A member may, however, be allowed to contribute more than what is required herein should he or she so desires. The employer, however, shall only be mandated to contribute what is required under these Rules unless the employer agrees to match the member’s increased contribution.


Section 1. Definition of Terms. For purposes of these Rules and Regulations, the following terms shall, unless the context indicates otherwise, have the following meanings:

c. Compensation. Basic monthly salary plus mandated cost of living allowance (COLA). Basic monthly salary shall refer to compensation for services in whatever form paid, including but not limited to fees, salaries, wages, and similar items received in a month. It shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece or commission basis, or other method of calculating the same, which is payable by an employer to an employee or by one person to another under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered.

Above rules were taken from the
Implementing Rules and Regulations of Republic Act No. 9679, 
the Home Development Mutual Fund Law of 2009, otherwise known as Pag-IBIG (Pagtutulungan sa kinabukasan: Ikaw, Bangko, Industriya at Gobyerno) Fund