In the last quarter of previous year, there’s been news about the increase of the Home Development Mutual Fund (HDMF) or Pag-ibig which will be effective in the year 2024. In January 16, 2024 HDMF published HDMF circular 460 in their website containing the implementation guidelines of the new rate.
The new 2024 HDMF/Pag-ibig rate will be effective on February 2024.
According to the HDMF circular 460, the HDMF contribution rate for both mandatory and voluntary shall be as follows
| Fund Salary | Employee | Employer |
|---|---|---|
| 1,500 and below | 1.0% | 2.0% |
| Over 1,500 | 2.0% | 2.0% |
This is basically the same from the previous contribution tables and the increase of the maximum contribution from 100 to 200 wasn’t directly mentioned in the circular, however it was confirmed by this statement.
The maximum fund salary to be used in computing the employee and employer savings has been increased from Five Thousand Pesos (P5,OOO.OO)to Ten Thousand Pesos (P10,OOO)taking into consideration financial calculations and rates of benefits in accordance with Section 7 of Republic Act No. 9679.
Previously the maximum fund salary is 5,000 and 2% of that is 100. Starting February 2024, it will increase to 10,000 and 2% of it is 200.
Final HDMF/Pag-ibig Table for 2024
To simplify, our final HDMF/Pag-ibig Contribution rates/table for 2024 should be as follows.
| Fund Salary | Employee | Employer | Employee Maximum Contribution | Employer Maximum Contribution |
|---|---|---|---|---|
| 1,500 and below | 1.0% | 2.0% | 15 | 30 |
| Over 1,500 | 2.0% | 2.0% | 200 | 200 |
HDMF/Pag-ibig 2024 Computation in MPM Payroll
Previous publications mentioned that the effectivity date of the new 2024 HDMF/Pag-ibig rate is January 2024, and because of this we updated MPM Payroll to use the new rate for January 2024 payrolls. However since the release of the circular 460 which makes the effectivity date to February 2024, we updated MPM Payroll to use the old rate for January 2024 payrolls.
If you already created your January first period payroll using the new rate, MPM Payroll will automatically compute the difference in your January 2nd payroll and refund any over deduction if applicable. These kind of changes has been considered in the design of MPM Payroll since the beginning and it can handle these sudden changes in the mandatory deductions.
If you want to automate the computation of your government deductions or your entire HR, time and attendance and payroll, you may want to try MPM Payroll.
Can the monthly contribution be less than ₱200 for employee and employer (e.g. ₱8,000 salary)?