What is exact and what is an estimate
- Exact: the TRAIN tax table, the bracket formula, and the SSS, PhilHealth and Pag-IBIG employee shares at the 2026 schedules.
- Exact: the ₱90,000 ceiling on tax-free 13th month pay and other benefits, and the 8% option's ₱250,000 reduction and ₱3,000,000 limit.
- Estimate: monthly withholding. Your employer annualizes in December, so the year's actual tax can differ by a few hundred pesos from 12 × the monthly figure.
- Not captured: final-taxed income (bank interest, prizes), mid-year job changes and unusual allowances. Use the annual mode or Form 2316 for those.
Results are planning estimates. The official BIR return, your employer's payroll and the BIR's own computation govern; rounding and inputs not captured here (for example mid-year rate changes or unusual benefits) can change the figure.
Quick answer
Income tax in the Philippines is computed on taxable income: gross pay minus non-taxable items (SSS, PhilHealth and Pag-IBIG employee shares, de minimis benefits, and up to ₱90,000 of 13th month pay and other benefits). The first ₱250,000 a year is taxed at 0%; above that the TRAIN Law table charges 15% to 35% on each bracket's excess. A ₱35,000-a-month employee pays about ₱1,701.30 a month.
Key points
- Annual taxable income up to ₱250,000 (about ₱20,833 a month) pays no income tax.
- Contributions are deducted before tax; the bracket rate applies only to the excess over the bracket floor, never to the whole salary.
- 13th month pay and other benefits are tax-free up to ₱90,000 a year in total (NIRC Sec. 32(B)(7)(e)).
- Minimum wage earners pay no income tax on their statutory pay, holiday pay, overtime, night differential or hazard pay.
- Self-employed people with gross sales/receipts plus other non-operating income of ₱3,000,000 or less, not VAT-registered, can choose 8% of gross over ₱250,000, which replaces both the graduated tax and the 3% percentage tax. Mixed-income earners get no ₱250,000 reduction.
Data used in this calculator
In force 2026Planning estimate- Income tax table
- NIRC Sec. 24(A)(2)(a) as amended by RA 10963, schedule from 1 Jan 2023 (full text)
- Withholding table
- BIR revised withholding tax table, RR 11-2018 Annex E (2023 onwards) (RR 11-2018)
- SSS
- 5% employee share of the monthly salary credit, ₱5,000–₱35,000 (SSS Circular 2024-006)
- PhilHealth
- 5% premium, half paid by the employee; floor ₱10,000, ceiling ₱100,000
- Pag-IBIG
- 2% employee share on pay up to ₱10,000 (maximum ₱200 a month; HDMF Circular 460)
- 8% option and OSD
- 8% of gross sales/receipts and other non-operating income over ₱250,000 if that total is ≤ ₱3,000,000; no ₱250,000 reduction for mixed income (Sec. 24(A)(2)(b)-(c), RR 8-2018); OSD 40% of gross sales/receipts (Sec. 34(L)); percentage tax 3% (Sec. 116), only up to ₱3,000,000 gross sales
Last verified against the issuances on November 11, 2026. Report an error on this page.
TRAIN Law income tax table for 2026
The same schedule has applied to every individual since taxable year 2023 and is still the one in force for 2026. Use the annual column for your yearly return and the monthly column for payroll withholding.
| Annual taxable income | Monthly equivalent | Tax |
|---|---|---|
| ₱250,000 and below | ₱20,833 and below | 0% |
| Over ₱250,000 to ₱400,000 | Over ₱20,833 to ₱33,332 | 15% of the excess over ₱250,000 |
| Over ₱400,000 to ₱800,000 | Over ₱33,333 to ₱66,666 | ₱22,500 + 20% of the excess over ₱400,000 |
| Over ₱800,000 to ₱2,000,000 | Over ₱66,667 to ₱166,666 | ₱102,500 + 25% of the excess over ₱800,000 |
| Over ₱2,000,000 to ₱8,000,000 | Over ₱166,667 to ₱666,666 | ₱402,500 + 30% of the excess over ₱2,000,000 |
| Over ₱8,000,000 | Over ₱666,667 | ₱2,202,500 + 35% of the excess over ₱8,000,000 |
Source: NIRC Sec. 24(A)(2)(a) as amended by RA 10963 (TRAIN), schedule for 2023 onwards; monthly brackets from the BIR withholding tax table (RR 11-2018 Annex E). As of November 2026.
How to compute income tax: worked example
An employee earns a basic salary of ₱35,000 a month with no allowances.
- 1
SSS: 5% of the ₱35,000 salary credit = ₱1,750.00
The salary credit is capped at ₱35,000.
- 2
PhilHealth: 5% × ₱35,000 ÷ 2 = ₱875.00
The employer pays the other half.
- 3
Pag-IBIG: 2% × ₱10,000 = ₱200.00
Pag-IBIG counts pay only up to ₱10,000.
- 4
Taxable compensation: ₱35,000 − ₱2,825.00 = ₱32,175.00
This falls in the ₱20,833–₱33,332 monthly bracket.
- 5
Tax: 15% × (₱32,175.00 − ₱20,833) = ₱1,701.30
Only the excess over ₱20,833 is taxed.
Take-home pay
₱30,473.70 a month
₱35,000 − ₱2,825.00 contributions − ₱1,701.30 tax. Effective tax rate: 4.9% of gross pay.
| Monthly basic salary | Contributions | Taxable | Withholding tax | Take-home |
|---|---|---|---|---|
| ₱20,000 | ₱1,700.00 | ₱18,300.00 | ₱0.00 | ₱18,300.00 |
| ₱35,000 | ₱2,825.00 | ₱32,175.00 | ₱1,701.30 | ₱30,473.70 |
| ₱60,000 | ₱3,450.00 | ₱56,550.00 | ₱6,518.40 | ₱50,031.60 |
| ₱150,000 | ₱4,450.00 | ₱145,550.00 | ₱28,262.55 | ₱117,287.45 |
Employee with no allowances, not a minimum wage earner, monthly payroll. Computed with this calculator's own formulas.
How much of your salary goes to tax?
Effective income tax rate by monthly salary
Withholding tax as a share of gross monthly pay, 2026
| Item | Effective tax rate |
|---|---|
| ₱20,000 a month | 0% |
| ₱25,000 a month | 1.3% |
| ₱30,000 a month | 3.4% |
| ₱35,000 a month | 4.9% |
| ₱50,000 a month | 9.1% |
| ₱60,000 a month | 10.9% |
| ₱100,000 a month | 15.8% |
| ₱150,000 a month | 18.8% |
| ₱250,000 a month | 22.9% |
Self-employed: 8% or graduated rates?
If your gross sales or receipts plus other non-operating income stay at or under ₱3,000,000, you are not VAT-registered and you pay no percentage tax other than the 3% under Sec. 116, you can elect 8% of gross over ₱250,000 (RR 8-2018). It replaces both the graduated income tax and the 3% percentage tax. Elect it on your first-quarter income tax (1701Q) or percentage tax (2551Q) return, or on the first quarterly return after you start; otherwise graduated rates apply for the whole year. The graduated option lets you deduct expenses (or the 40% optional standard deduction) but adds the percentage tax. Above ₱3,000,000 in gross sales you must register for VAT, and 12% VAT replaces the 3%.
Mixed-income earners (salary plus business) pay graduated tax on the salary in every case. On the business side they choose graduated rates, with the business income added to the salary, or 8% of all business gross sales and other non-operating income, with no ₱250,000 reduction. The ₱3,000,000 limit counts business income only. Use the calculator's mixed-income mode, then see which return to file.
| Gross receipts a year | Graduated (40% OSD) + 3% percentage tax | 8% option | Cheaper |
|---|---|---|---|
| ₱500,000 | ₱22,500 | ₱20,000 | 8%, by ₱2,500 |
| ₱1,000,000 | ₱92,500 | ₱60,000 | 8%, by ₱32,500 |
| ₱2,000,000 | ₱262,500 | ₱140,000 | 8%, by ₱122,500 |
| ₱3,000,000 | ₱442,500 | ₱220,000 | 8%, by ₱222,500 |
Purely self-employed, not VAT-registered, optional standard deduction, no other income. With real expenses above 40% of gross, the graduated option can win; enter your own figures in the calculator.
Common mistakes
| Mistake | What happens | Do this instead |
|---|---|---|
| Using the 2018–2022 table | Tax overstated: the old table charged 20% from ₱250,000 | Use the 2023-onwards table above |
| Applying the bracket rate to the whole salary | Tax several times too high | Tax only the excess over the bracket floor, plus the fixed amount |
| Taxing the 13th month pay in full | Tax overstated by up to ₱31,500 a year | Exempt the first ₱90,000 of benefits |
| Forgetting contributions | Taxable income too high | Deduct the employee shares of SSS, PhilHealth and Pag-IBIG first |
| Choosing 8% without counting percentage tax | Wrong comparison | Compare 8% with graduated tax plus 3% percentage tax |
Buod sa Tagalog
Ang income tax ay kinukuwenta sa taxable income: kabuuang sahod bawas ang SSS, PhilHealth at Pag-IBIG, ang de minimis, at hanggang ₱90,000 ng 13th month pay at iba pang benepisyo. Walang buwis ang unang ₱250,000 kada taon. Sa sahod na ₱35,000 kada buwan, mga ₱1,701.30 ang buwis at ₱30,473.70 ang naiuuwi. Kung self-employed ka at hindi lalampas sa ₱3,000,000 ang benta, puwede mong piliin ang 8%.
Frequently asked questions
+How much is the income tax on a ₱30,000 monthly salary?
About ₱1,007.55 a month. Contributions of ₱2,450.00 come off first, leaving ₱27,550.00 taxable; the tax is 15% of the excess over ₱20,833. Take-home pay is about ₱26,542.45, assuming no allowances and a monthly payroll.
+Is a ₱20,000 monthly salary taxable?
No. After SSS, PhilHealth and Pag-IBIG (₱1,700.00), taxable pay is ₱18,300.00, below the ₱20,833 monthly zero bracket. You still pay the contributions, so take-home pay is about ₱18,300.00. Allowances or overtime can push you into the 15% bracket.
+Is ₱250,000 a year tax-free?
Yes. Annual taxable income of ₱250,000 or less is taxed at 0% under the TRAIN Law table. Taxable income means after non-taxable items such as contributions, de minimis benefits and up to ₱90,000 of 13th month pay and other benefits, so gross pay can be well above ₱250,000 and still be tax-free.
+Are SSS, PhilHealth and Pag-IBIG deducted before computing tax?
Yes. The employee's share of SSS, PhilHealth and Pag-IBIG contributions, and union dues, are excluded from taxable compensation; the withholding table applies to the remainder. Employer-share contributions do not reduce your taxable income.
+Why is my payslip withholding different from this calculator?
Usually because your employer annualizes in December, treats an allowance differently, uses the semi-monthly table, or added a previous employer's pay. Check the annual mode, then compare with your Form 2316 at year-end.
+Did the income tax rates change in 2023?
Yes. From 1 January 2023 the TRAIN Law's second schedule took effect, cutting rates for most brackets (for example 15% instead of 20% on income just above ₱250,000). That schedule still applies in 2026. No newer law has changed the individual rates as of November 2026.
+Should a freelancer choose the 8% rate or graduated rates?
With low expenses, 8% usually costs less because it also replaces the 3% percentage tax; graduated rates can win when real expenses are high. You elect in your first quarterly return, and the choice binds for the year.
+Are minimum wage earners exempt from income tax?
Yes. A minimum wage earner's statutory minimum wage, holiday pay, overtime, night differential and hazard pay are exempt. Taxable allowances or benefits above ₱90,000 are still taxed.
Sources and references
- RA 10963 (TRAIN Law), Sec. 5 amending NIRC Sec. 24(A) — the graduated income tax table and the 8% option (checked November 12, 2026)
- Revenue Regulations No. 8-2018 — income tax rules under TRAIN, including the 8% election and mixed-income earners (checked November 12, 2026)
- Revenue Regulations No. 11-2018 — withholding on compensation, the revised withholding table, the ₱90,000 benefits ceiling (checked November 12, 2026)
- SSS contribution schedule — 2025 schedule under RA 11199 (SSS Circular 2024-006) (checked November 12, 2026)
- PhilHealth premium contribution — 5% premium, ₱10,000 floor and ₱100,000 ceiling (checked November 12, 2026)
- Pag-IBIG Fund contributions — ₱10,000 maximum fund salary (HDMF Circular 460) (checked November 12, 2026)
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Author and editorial review
Deepak Middha, Chartered Accountant
Chartered Accountant with 18 years in hedge funds; writes and maintains sulat.ph. Every rate, ceiling, deadline and fee on this page is taken from the National Internal Revenue Code or a BIR issuance and was checked against that source on November 12, 2026. Where a figure could not be confirmed officially, the page says so.
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