Philippines Tax Calculator (TRAIN Law)
Print| Monthly BIR Income Tax | ₱0.00 |
Individual income taxation in the Philippines is governed by the Bureau of Internal Revenue (BIR) under the Tax Reform for Acceleration and Inclusion (TRAIN) Law (RA 10963). Under the updated TRAIN tax table, annual compensation income up to ₱250,000 is completely tax-exempt, while higher income levels are subject to progressive BIR tax brackets ranging from 15% to 35%.
Our free Income Tax Philippines Calculator computes your monthly BIR withholding tax, mandatory statutory contributions (SSS, PhilHealth, Pag-IBIG), and final net take-home pay.
How to Calculate BIR Income Tax in the Philippines
Calculating BIR income tax requires deducting non-taxable statutory contributions and exempt 13th-month bonuses from gross monthly salary prior to applying BIR withholding tax tables.
The BIR Taxable Income Formula:
Monthly Taxable Income = Monthly Gross Salary - SSS Contribution - PhilHealth Contribution - Pag-IBIG Contribution - Non-Taxable Allowances
Net Monthly Pay = Monthly Gross Salary - Mandatory Statutory Contributions - BIR Withholding Tax
BIR TRAIN Law Progressive Annual Tax Brackets:
- ₱0 – ₱250,000: 0% (Tax-Exempt)
- ₱250,001 – ₱400,000: 15% of excess over ₱250,000
- ₱400,001 – ₱800,000: ₱22,500 + 20% of excess over ₱400,000
- ₱800,001 – ₱2,000,000: ₱102,500 + 25% of excess over ₱800,000
- ₱2,000,001 – ₱8,000,000: ₱402,500 + 30% of excess over ₱2,000,000
- Over ₱8,000,000: ₱2,202,500 + 35% of excess over ₱8,000,000
Philippine Monthly Salary Tax & Contribution Breakdown
The table below displays sample monthly payroll tax withholdings across Philippine salary levels:
| Monthly Gross Salary | Mandatory Contributions (SSS/PhilHealth/HDMF) | Monthly BIR Withholding Tax | Net Monthly Take-Home Pay |
|---|---|---|---|
| ₱20,000.00 / mo (₱240k/yr) | ₱1,350.00 | ₱0.00 (Tax-Exempt) | ₱18,650.00 |
| ₱35,000.00 / mo (₱420k/yr) | ₱2,325.00 | ₱1,788.75 | ₱30,886.25 |
| ₱50,000.00 / mo (₱600k/yr) | ₱3,125.00 | ₱4,600.00 | ₱42,275.00 |
| ₱100,000.00 / mo (₱1.2M/yr) | ₱4,350.00 | ₱17,162.50 | ₱78,487.50 |
Step-by-Step Calculation Example
An employee in Manila earns a monthly gross salary of ₱40,000.00:
- Monthly Gross Salary: ₱40,000.00
- SSS Employee Contribution: ₱1,350.00
- PhilHealth Employee Contribution (5.0% rate shared): ₱1,000.00
- Pag-IBIG Employee Contribution: ₱200.00
- Total Mandatory Deductions: ₱2,550.00
Step 1: Compute Monthly Taxable Income
Monthly Taxable Income = ₱40,000 - ₱2,550 = ₱37,450.00
Annualized Taxable Income = ₱37,450 × 12 = ₱449,400.00
Step 2: Apply BIR TRAIN Law Tax Bracket (₱400k – ₱800k tier)
Base Tax = ₱22,500.00
20% of Excess over ₱400,000 = ( ₱449,400 - ₱400,000 ) × 0.20 = ₱49,400 × 0.20 = ₱9,880.00
Total Annual Tax = ₱22,500 + ₱9,880 = ₱32,380.00
Monthly Withholding Tax = ₱32,380 / 12 = ₱2,698.33
Step 3: Compute Net Monthly Take-Home Pay
Net Pay = ₱40,000 (Gross) - ₱2,550 (Contributions) - ₱2,698.33 (Tax) = ₱34,751.67
Frequently Asked Questions (FAQ)
Is 13th-Month Pay taxable in the Philippines?
Under National Internal Revenue Code (NIRC) rules, 13th-month pay and other productivity bonuses are tax-exempt up to ₱90,000. Any bonus amounts exceeding ₱90,000 are added to regular compensation income and taxed at standard BIR rates.
Are minimum wage earners subject to income tax in the Philippines?
No. Statutory Minimum Wage Earners (SMWEs) in the Philippines are 100% exempt from income tax on their basic minimum wage, holiday pay, overtime pay, night shift differential, and hazard pay.
What is the 8% Flat Tax Option for Freelancers?
Self-employed individuals and freelancers with gross annual sales/receipts not exceeding ₱3,000,000 can elect a simplified 8% flat income tax rate on gross sales/receipts in excess of ₱250,000, in lieu of progressive income tax and 3% percentage tax.