Glossary

What is Statutory deductions?

Amounts an employer must deduct from an employee's pay by law, namely SSS, PhilHealth and Pag-IBIG employee shares and withholding tax on compensation.

Statutory deductions come before voluntary or company deductions, such as loans and cash advances. The employer is responsible for remitting what it deducts to each agency on time.

Related terms

  • Service incentive leave (SIL): Five days of paid leave a year for covered employees who have worked at least one year, convertible to cash if unused at year-end.
  • Special non-working day: A day on which the rule is no work, no pay unless company policy says otherwise. An employee who works is paid 130% of the daily wage, or 150% if it is also the rest day.
  • Tardiness and undertime: Tardiness is arriving after the scheduled start time. Undertime is leaving before the scheduled end time. Both reduce paid hours according to the company's policy.
  • Withholding tax on compensation: Income tax the employer deducts from an employee's pay each period and remits to the BIR, based on the employee's annualized taxable compensation.

Compute it in OneHRIS

OneHRIS applies Philippine pay and compliance rules in every payroll run. See the Help Center for step-by-step guides, try the free calculators, or see pricing.

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