π΅π Philippines Income Tax Calculator
TRAIN law graduated rates, 0% to 35%.
Estimated annual income tax
Estimates for planning only, not financial advice.
The Philippines taxes individuals on graduated TRAIN law brackets: the first β±250,000 is exempt, then rates run 15%, 20%, 25%, 30%, and 35% at the top. On β±900,000 of taxable income, the tax is β±127,500 for the year, about β±10,625 a month, leaving β±772,500 take-home.
How to Use This Calculator
Enter your annual taxable compensation income: gross pay minus the β±90,000 tax-exempt 13th-month ceiling portion, de minimis benefits, and mandatory contributions like SSS, PhilHealth, and Pag-IBIG. The calculator applies each bracket in order.
Enter annual taxable income in pesos, after the standard exclusions listed above.
Read the annual tax, monthly equivalent, marginal and effective rates, and take-home pay.
Match it against your payslip withholding. Employers use BIR withholding tables that annualize, so mid-year hires often see adjustments. For US-side comparison, the federal income tax calculator covers American brackets.
TRAIN Law Tax Table
TRAIN took effect in 2018 and, crucially, lifted the tax-free threshold from β±50,000 to β±250,000 while cutting every bracket rate. The scheduled further cuts for 2023 onward were already folded in, so the table above is the current steady state. Purely self-employed professionals can alternatively elect a flat 8% on gross receipts in place of graduated rates, which wins for many freelancers under about β±3M of revenue.
Worked Example
Taxable income of β±900,000. The first β±250,000 is exempt. The β±150,000 slice to β±400,000 at 15% is β±22,500. The β±400,000 slice to β±800,000 at 20% is β±80,000. The final β±100,000 at 25% is β±25,000. Total: β±22,500 + β±80,000 + β±25,000 = β±127,500 a year, or β±10,625 monthly, leaving β±772,500. The marginal rate is 25%, so only income above β±800,000 faces that rate, while the effective rate on the whole β±900,000 is about 14.2%.
What Actually Shrinks a Philippine Tax Bill
Start with the exclusions that never enter taxable income: 13th-month pay and other benefits up to β±90,000, de minimis benefits within BIR ceilings, and mandatory SSS, PhilHealth, and Pag-IBIG contributions. Those are automatic if payroll codes them right. Next, the 8% option: self-employed individuals and professionals may choose 8% of gross sales or receipts instead of graduated rates plus percentage tax, a single election that often halves the bill for freelancers.
My take for employees: the biggest leak is not the brackets but unclaimed de minimis benefits. Rice subsidies, uniform allowances, and medical benefits within the ceilings are tax-free by regulation, yet many small employers just pay cash allowances that get taxed. Ask payroll how each allowance is coded. For mixed earners with both a job and freelance income, keep the books separate from day one, because the 8% election and the graduated tables interact in ways that punish sloppy records. Budget the monthly number with our 50/30/20 budget planner so the take-home figure turns into a plan.
Estimates for planning only, not financial advice.
Frequently Asked Questions
What are the Philippines income tax brackets?
Under TRAIN law: 0% to β±250,000; 15% on β±250,001 to β±400,000; 20% on β±400,001 to β±800,000; 25% on β±800,001 to β±2,000,000; 30% on β±2,000,001 to β±8,000,000; and 35% above β±8,000,000. Rates apply only to income within each band.
What is the β±250,000 exemption?
The first β±250,000 of annual taxable income is tax-free for individuals, raised from β±50,000 by TRAIN in 2018. Minimum-wage earners are additionally exempt on their statutory minimum wage, holiday pay, overtime, and hazard pay.
Is 13th-month pay taxable?
Up to β±90,000 of 13th-month pay and other benefits combined is excluded from taxable income. Amounts above the β±90,000 ceiling are taxable. Many employees never breach the ceiling, so their full 13th-month pay arrives tax-free.
What is the 8% tax option?
Self-employed individuals and professionals may elect 8% income tax on gross sales or receipts instead of graduated rates, replacing both income tax and the 3% percentage tax. It usually wins for freelancers with modest expenses; high-expense businesses do better itemizing under graduated rates.
What are de minimis benefits?
Small benefits the BIR excludes from tax within set ceilings: rice subsidy, uniform allowance, medical cash allowance, laundry allowance, and similar items. Paid within the ceilings they are tax-free; anything above becomes taxable compensation.
How does withholding work in the Philippines?
Employers withhold monthly using BIR tables that annualize your pay, then do a year-end adjustment so total withholding matches actual liability. Mid-year hires and mid-year raises commonly produce small refunds or balances at year-end.
Are SSS, PhilHealth, and Pag-IBIG contributions deductible?
Employee mandatory contributions to SSS, PhilHealth, and Pag-IBIG are excluded from taxable compensation income up to regulatory limits. Employer shares are not income to you at all.
Do foreigners working in the Philippines pay this tax?
Resident aliens are taxed like citizens on Philippine-source income. Non-resident aliens engaged in trade or business face the same graduated rates; those not engaged in business face flat final withholding rates instead.
When are returns filed?
Employees with a single employer are generally substituted-filing and need no annual return. Those who must file, including the self-employed, face April 15 for the annual return, with quarterly filings during the year.
Does VAT affect my salary?
No. The 12% VAT applies to goods and services you buy, not to wages. It is a consumption tax, separate from the income tax computed here.