Many of you asked how PERA works for an employer and your employees. As an SEC and BIR-accredited PERA administrator, here is where we can give you clear answers.
PERA and your existing benefits
Can an employee contribute to PERA without the employer matching?
Yes. Employee contributions are entirely voluntary and work independently of the employer. The matching condition only matters for the employer's enhanced 150% deduction. It has no bearing on an employee's ability to open an account and contribute on their own, and they still earn the 5% tax credit on their own contributions within the annual limit.
We already have a retirement plan. Does PERA replace it, is it required, and isn't it a double expense?
PERA sits on top of your existing retirement arrangements. It does not replace them and it is not mandatory. The statutory minimum retirement pay under RA 7641, along with SSS or GSIS, all remain fully in force. In fact, the PERA Act allows a private employer to contribute to an employee's PERA only if it complies with the mandatory SSS contribution and the retirement pay mandated under the Labor Code. PERA is a voluntary additional layer you can choose to offer, not a second obligation you are forced to carry, and an existing company plan does not convert into PERA.
Is the employer's PERA contribution enough to satisfy our minimum retirement benefit obligation?
No. PERA does not satisfy or reduce the statutory minimum retirement benefit under RA 7641. They are separate. We would recommend treating PERA as an enhancement to your total rewards, not as a substitute for the legally mandated retirement pay.
Is the employer's PERA contribution taxable to the employee?
No. Under the CMEPA guidelines in RR 22-2025, the qualified employer's contribution is exempt from withholding tax on compensation. On top of that, all investment income earned inside the account is tax exempt during the accumulation period, and qualified withdrawals at retirement are tax free.
Setting up and enrolling
Do we have to enroll all employees? What about those who don't want to contribute, or probationary, part-time, and contractual staff?
For the enhanced 150% deduction, yes, you must open an account and make an employer contribution for all employees who have an employer-employee relationship, including probationary, part-time, and contractual. If you exclude any group, you forfeit the additional 50% and fall back to the standard 100% deduction. An employee can decline to make their own contributions, but you still open an account and contribute a nominal amount for them to keep the all-employees condition intact, without forcing the employee to give up any take-home pay.
Can we give PERA to employees who don't have an account yet, and does the deduction still apply?
You cannot contribute into an account that does not exist yet, but opening the accounts is simply the first step of the program and the administrator handles it as part of onboarding. Once accounts are open and you make qualified contributions, the deduction applies.
Who decides how much is contributed?
The employer sets the contribution, whether a fixed peso amount, a percentage of salary, a match, or part of a bonus. One caveat: if you want the 150% deduction, your contribution must be at least equal to the employee's own voluntary contribution, so it is not a free choice of any amount once you are after the full incentive. Employees decide their own voluntary amount on top. Everything counts toward the ₱200,000 aggregate annual cap per contributor, or ₱400,000 for OFWs.
What does it take to enroll, and who do we coordinate with?
Each employee needs a valid TIN and the capacity to contract. You engage an accredited PERA Administrator, like Zalamea, who handles account opening, KYC, contribution processing, and reporting. Administrators are pre-qualified by a regulatory authority such as the BSP or SEC and accredited by the BIR. You coordinate directly with your administrator, not with a government office.
How do we get started if we're completely new to PERA?
The simplest path is a short briefing for your HR and finance team where we walk through plan design, the tax mechanics, and onboarding for your specific headcount. You can request one using the button at the bottom of this page. Given how many of you asked, we are also planning a dedicated PERA-only session.
Tax credit and reporting
How do we reflect PERA in the annual alphalist, and how do we avail the incentives?
You do not build a separate PERA alphalist by hand. The Alphalist of PERA Contributors (Annex B.2) is generated automatically by the BSP's PERASys once the BIR approves the tax credit applications your administrator files. On the employee side, the administrator issues each employee a PERA Tax Credit Certificate, the employee gives a copy to HR, and HR reflects that credit amount in the year-end adjustment when computing the employee's net withholding tax due. On the employer side, you book the contribution under "Share in Qualified Employee's PERA Contribution" and disclose it in your Notes to Financial Statements, using the administrator's certificate as your basis.
Does the 5% tax credit carry over, or do we lose it if it isn't used in the contribution year?
It carries over. You do not have to use it the same year you contributed. Under RR 7-2023 a PERA Tax Credit Certificate stays valid for up to 5 years from its date of issuance. If it is still unused after 5 years it expires and the amount is forfeited, so the only real rule is to use it within that window.
What if the certificate arrives late, delayed on the BIR's side?
You are protected. The 5-year clock runs from the date the certificate is issued, not from when the contribution was made. And if no certificate has been issued yet, the credit right does not lapse at all, no matter how long ago the contribution was. Once the delayed certificate comes through, the employee simply submits it to HR and it is applied to that year's year-end withholding adjustment.
What happens to the employee's credit if the administrator files late or not at all?
The employee does not lose out. Their right to the credit stays alive for as long as the certificate is unissued. The law places the filing duty squarely on the PERA Administrator, who is required to apply for the certificates on each contributor's behalf and is held to strict accountability for doing so. In practice this is the administrator's job to get right, not a risk that lands on your employees.
Tax benefits are subject to applicable BIR regulations and individual eligibility. Contributors and employers are encouraged to consult a qualified tax professional for advice specific to their circumstances.
