Income Tax Calculator

Personal income taxation in the Philippines is governed by the National Internal Revenue Code (NIRC), as substantially overhauled by Republic Act No. 10963, popularly known as the Tax Reform for Acceleration and Inclusion (TRAIN) Law. Administered by the Bureau of Internal Revenue (BIR), the tax system distinguishes between resident citizens (taxed on worldwide income) and non-resident citizens, resident aliens, or non-resident aliens (taxed strictly on Philippine-sourced compensation).

Under current TRAIN Law rate schedules, individuals earning an annual taxable compensation not exceeding ₱250,000 are completely exempt from withholding tax (0% bracket). For income exceeding ₱250,000, progressive marginal rates of 15%, 20%, 25%, 30%, and 35% apply in stepped brackets. Employers compute and withhold these liabilities each pay period using BIR withholding tables under the substituted filing system.

In addition, self-employed professionals and sole proprietors with gross annual sales or receipts not exceeding the VAT threshold (₱3,000,000) have the statutory option to elect an 8% flat tax on gross sales in lieu of progressive graduated rates and 1%–3% percentage tax. Mandatory employee contributions to the Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund (Pag-IBIG), alongside non-taxable 13th-month pay and de minimis benefits (up to ₱90,000 combined cap), are fully excluded before calculating taxable net income.

Calculate your annual BIR withholding tax, monthly deductions, and net take-home salary:

1. Enter Annual Gross Income: Input your total gross annual salary, base compensation, or assessable earnings in Philippine Pesos (₱).
2. Verify Statutory Deductions: Mandatory contributions to SSS, PhilHealth, and Pag-IBIG are excluded from gross compensation to arrive at net taxable income.
3. Review TRAIN Law Brackets: The computation engine automatically applies the graduated BIR rate schedule (0% up to ₱250k, stepping up to 35% for income over ₱8,000,000).
4. Click Calculate: Instantly view your total tax liability, effective tax rate, and net retained annual and monthly take-home pay.

The calculation output provides an itemized breakdown of your statutory tax obligation and retained earnings:

Under the TRAIN Law (RA 10963), income tax is computed using the progressive stepped bracket formula:

Examine three realistic salary profiles computed under current BIR TRAIN Law tables:

• Universal ₱250,000 Exemption: Minimum wage earners and entry-level professionals are completely shielded from personal income taxes under Section 24 of the NIRC.
• Substituted Filing Convenience: Employees with single employers during the tax year are eligible for substituted filing (BIR Form 2316), eliminating the necessity of filing BIR Form 1700 individually.
• 8% Flat Tax Option for Freelancers: Self-employed individuals and online freelancers earning under ₱3,000,000 can simplify bookkeeping by opting for a single 8% flat tax on gross receipts over ₱250,000.
• Tax-Free 13th Month Pay: Mandatory 13th-month pay and productivity bonuses up to ₱90,000 are 100% tax-free under statutory rules.

• No Itemized Personal Allowances for Employees: The TRAIN Law abolished individual personal and additional dependent exemptions; individual compensation earners receive only the standard ₱250,000 threshold.
• Multiple Employers Requirement: Employees who switch employers mid-year or hold concurrent jobs are disqualified from substituted filing and must consolidate income on BIR Form 1700 by April 15.
• Non-Resident Alien Rules: Non-resident aliens not engaged in trade or business (NRANETB) are taxed at a flat 25% gross withholding rate without benefit of progressive brackets.

The current statutory individual income tax rate table enforced by the Bureau of Internal Revenue (BIR) is detailed below:

• Including 13th Month Pay in Taxable Income: Adding the full 13th-month salary without deducting the statutory ₱90,000 non-taxable ceiling results in unnecessary over-taxation.
• Confusing the 8% Self-Employed Option with Compensation: The 8% optional flat tax applies exclusively to gross receipts of self-employed individuals and freelancers, never to pure compensation income from employment.
• Failing to Annualize Taxes in December: Employers must perform a year-end payroll reconciliation (annualization) to refund excess withholdings or withhold remaining shortages on December payslips.

• Bureau of Internal Revenue (BIR) — Official Philippines Tax Authority
• BIR Electronic Filing and Payment System (eFPS) — Online Returns & Submissions
• Republic Act No. 10963 (TRAIN Law) — Official Gazette Statutory Text