Income Tax Calculator
The Bureau of Internal Revenue (BIR) requires Filipino taxpayers to compute and pay income tax on their earnings. If you're wondering how much tax you'll pay... BIR-compliant 2026 rates.
Last Updated: June 13, 2026
Calculate Your Tax
Tax Rates (2026)
| Taxable Income Range | Tax Rate | Fixed Tax |
|---|---|---|
| ₱0 - ₱250,000 | 0% | ₱0 |
| ₱250,001 - ₱400,000 | 15% | ₱0 |
| ₱400,001 - ₱800,000 | 20% | ₱22,500 |
| ₱800,001 - ₱2,000,000 | 25% | ₱102,500 |
| ₱2,000,001 - ₱8,000,000 | 30% | ₱402,500 |
| Over ₱8,000,000 | 35% | ₱2,202,500 |
Source: TRAIN Law (RA 10963), as amended — 2023+ rates
How It Works
The Bureau of Internal Revenue (BIR) requires Filipino taxpayers to compute and pay income tax on their earnings. If you're wondering how much tax you'll pay on your salary, business income, or other sources of revenue, this calculator provides a clear, step-by-step breakdown of your Philippine income tax liability under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, Republic Act No. 10963.
Income tax in the Philippines is progressive—the more you earn, the higher your marginal rate. Under the 2023-onward TRAIN schedule, the first ₱250,000 of annual taxable income is tax-exempt, and rates then rise from 15% to 35%. This calculator accounts for the current tax brackets and the mandatory contributions you can exclude, helping you understand your net take-home pay and plan your finances.
How This Calculator Works
The calculator follows the BIR's standard income tax computation process:
- Gross Income: You enter your total annual income (salary for employees, or gross sales/receipts for the self-employed).
- Mandatory Contributions: For employees, your mandatory SSS, PhilHealth, and Pag-IBIG contributions are excluded from taxable income (NIRC Sec 32(B)(7)(f)). The 13th-month pay and other benefits are also tax-exempt up to an aggregate ₱90,000 cap (NIRC Sec 32(B)(7)(e)).
- Deductions (Self-Employed Only): Self-employed individuals and professionals may claim either itemized deductions or the 40% Optional Standard Deduction (OSD) on gross sales/receipts (NIRC Sec 34(L)). There is no percentage "standard deduction" for employees.
- Taxable Income: Gross income minus exclusions and allowable deductions equals your taxable income.
- Tax Brackets: The calculator applies the 2023-onward TRAIN graduated rates—0% on the first ₱250,000, then 15%, 20%, 25%, 30%, and 35% on income above ₱8,000,000.
- Final Tax Liability: Tax withheld by your employer (BIR Form 2316) or quarterly payments you made are credited against the computed tax. The result is your annual income tax due or refund.
Underlying Tax Rules
This calculator is based on the following Philippine tax laws and regulations:
- NIRC §§ 24–26 (Income Tax): The National Internal Revenue Code establishes the framework for individual income taxation, including the graduated tax brackets.
- Republic Act No. 10963 (TRAIN Law, 2017): Restructured individual income tax rates, set the ₱250,000 tax-free threshold, and (under Sec 5) fixed the 0/15/20/25/30/35% schedule that took effect on January 1, 2023. These rates remain current for 2026.
- RA 10963, Sec 12 (Repeal of NIRC Sec 35): Personal and additional (dependent) exemptions were repealed effective January 1, 2018. There are no longer ₱50,000 personal exemptions or per-dependent exemptions.
- BIR Revenue Regulations (RR) 8-2018: Implement the TRAIN individual income tax rules, including the 8% flat-tax option and the Optional Standard Deduction.
- Optional Standard Deduction (Self-Employed): 40% of gross sales/receipts, available only to those earning from trade, business, or practice of profession (NIRC Sec 34(L)). Employees cannot claim it.
- 8% Flat-Tax Option (Self-Employed): Self-employed individuals and professionals whose gross sales/receipts do not exceed the ₱3,000,000 VAT threshold may elect 8% of gross in excess of ₱250,000, in lieu of the graduated rates and the 3% percentage tax (NIRC Sec 24(A)(2)(b)).
Tips for Accurate Results
- Include All Income Sources: Enter salary, taxable bonuses, business income, rental income, and other taxable income. The first ₱90,000 of 13th-month pay and other benefits is exempt; anything above that aggregate cap is taxable.
- Distinguish Employee vs. Self-Employed: Employees exclude mandatory contributions and have no percentage standard deduction. Self-employed taxpayers choose between itemized deductions, the 40% OSD, or the 8% flat-tax option—whichever is most favorable.
- Account for Withholding Tax: If your employer withholds tax monthly, your year-end BIR Form 2316 shows the total withheld. That amount is credited against your final tax due, and the calculator shows your net liability or refund.
- No Dependent Exemptions: Since TRAIN took effect in 2018, you can no longer reduce taxable income by claiming a spouse, children, or other dependents.
- Non-Taxable Income: Certain income is exempt (e.g., SSS/GSIS benefits, life insurance proceeds, qualified gifts). Do not include these in your gross income.
- Timing Matters: Income tax is computed on a calendar-year basis (January–December). Mid-year employment changes or business closures may affect your calculation.
Tax Optimization Tips
Self-Employed — Compare the 8% Flat Tax vs. Graduated Rates
If your gross sales/receipts stay under the ₱3,000,000 VAT threshold, you may elect 8% of gross in excess of ₱250,000 (NIRC Sec 24(A)(2)(b)), which replaces both the graduated income tax and the 3% percentage tax. For many professionals with few deductible expenses this is the cheapest route. For example, on ₱1,200,000 of receipts the 8% option costs ₱76,000, versus roughly ₱122,500 under graduated rates plus the 3% percentage tax. Elect the 8% option on your first-quarter return (BIR Form 1701Q) to lock it in for the year.
Self-Employed — Choose OSD vs. Itemized Deductions Wisely
The 40% Optional Standard Deduction (NIRC Sec 34(L)) is available only to self-employed individuals and professionals, not employees. Compare it against itemized deductions (office rent, utilities, professional fees, supplies). If your documented expenses exceed 40% of gross receipts, itemize and keep your official receipts; if they fall short of 40%, the OSD wins and needs no expense substantiation.
Use the ₱90,000 Benefit Ceiling and Time Variable Income
The first ₱90,000 of 13th-month pay and other benefits is tax-exempt each year (NIRC Sec 32(B)(7)(e)). If you control the timing of variable income (freelance projects, business draws), spreading large amounts across two tax years can keep you in lower marginal brackets—for example, a single ₱2,000,000 spike taxed at the 25–30% margins may sit largely in the 20% band if split. Consult a tax advisor to stay within substance-over-form rules.
Claim All Allowable Business Deductions
Self-employed and business owners often miss deductible expenses. Track and claim: office rent, utilities, internet, professional development, equipment depreciation, vehicle expenses (if business-related), insurance, and professional fees. Each ₱100,000 in deductions saves approximately ₱15,000 in tax (at the 15% bracket). Keep receipts and maintain a deduction log.
Keep Your Withholding Accurate
Employees should make sure their employer applies the correct withholding using an up-to-date BIR Form 2305 (Certificate of Update of Exemption and of Employer's and Employee's Information) when their status or additional income changes. Self-employed taxpayers file quarterly returns (BIR Form 1701Q) so their payments track actual income. Accurate withholding prevents both a large year-end balance due and an interest-free over-withholding that you only recover at refund time.
Frequently Asked Questions
No. There is no percentage "standard deduction" for employees under Philippine law. The 40% Optional Standard Deduction (OSD) under NIRC Sec 34(L) is available only to self-employed individuals and professionals. What employees exclude from taxable income are their mandatory SSS, PhilHealth, and Pag-IBIG contributions and the first ₱90,000 of 13th-month pay and other benefits (NIRC Sec 32(B)(7)). The first ₱250,000 of taxable income is then taxed at 0%.
Non-taxable income includes SSS/GSIS/PAGIBIG benefits, life insurance proceeds, gifts and donations, prizes from legitimate lotteries (with conditions), certain scholarships, and income from tax-exempt entities (e.g., non-profit organizations). However, interest, dividends, and capital gains are generally taxable unless specifically exempted by law.
No. The TRAIN Law (RA 10963, Sec 12) repealed the personal and additional (dependent) exemptions under NIRC Sec 35 effective January 1, 2018. You can no longer reduce your taxable income by claiming a spouse, children, parents, or siblings. In exchange, TRAIN made the first ₱250,000 of annual taxable income tax-free for everyone, which for most taxpayers is more generous than the old ₱25,000-per-dependent exemptions ever were.
Withholding tax is the amount your employer (or payor) deducts from your income and remits to the BIR on your behalf. Income tax is your total annual tax liability. If your withholding exceeds your liability, you receive a refund; if it's less, you owe the difference. The calculator shows both and reconciles them.
A mixed-income earner combines compensation income (after excluding mandatory contributions) with business or professional income. For the business portion you may use itemized deductions, the 40% Optional Standard Deduction, or—if gross receipts stay under the ₱3,000,000 VAT threshold—the 8% flat tax. Compensation income is always taxed at the graduated rates. Then apply the progressive brackets to taxable income. The calculator handles this when you input your income sources.
Self-employed individuals file quarterly income tax returns (BIR Form 1701Q) and pay tax on actual income each quarter. At year-end, file your annual return—BIR Form 1701 if you use graduated rates with itemized deductions, or BIR Form 1701A if you use the 8% flat tax or the 40% Optional Standard Deduction. If your quarterly payments exceeded your annual tax, you can claim a refund or carry the excess forward as a credit.
The 13th-month pay and other benefits (including productivity bonuses and Christmas bonuses) are tax-exempt up to an aggregate ceiling of ₱90,000 under NIRC Sec 32(B)(7)(e), as amended by the TRAIN Law (RA 10963). Any amount above the combined ₱90,000 cap is added to your taxable income and taxed at the graduated rates. Regular monthly bonuses that are part of compensation are fully taxable.
If your withholding tax or quarterly estimated payments exceed your annual tax liability, you can claim a refund by filing your annual income tax return (BIR Form 1701) with supporting documents. The BIR typically processes refunds within 30 days to 6 months. Alternatively, you can request a tax credit to offset next year's liability.
The BIR imposes a 25% surcharge on unpaid tax and 12% annual interest on the unpaid amount. Failure to file a return can result in criminal penalties. If you cannot pay by the deadline (April 15 for calendar-year filers), file your return on time and pay as much as possible; the interest and surcharge apply only to the unpaid balance.
No, personal living expenses are not deductible for employees. However, if you're self-employed or operate a business, you can deduct business-related expenses (office rent, utilities, supplies, professional fees) that are ordinary and necessary. The key is that the expense must be directly tied to generating business income, not personal consumption.
No. The Philippines uses a progressive system. Under the 2023-onward TRAIN schedule (RA 10963), the first ₱250,000 of taxable income is taxed at 0%, the next ₱150,000 (up to ₱400,000) at 15%, the next ₱400,000 (up to ₱800,000) at 20%, then 25%, 30%, and 35% on income above ₱8,000,000. You pay each rate only on the portion of income that falls within that bracket, which is why the calculator breaks the tax down bracket by bracket.
Income fluctuations are common for the self-employed. Because you file quarterly returns (BIR Form 1701Q) based on actual income to date, your payments automatically track your earnings—you pay less in slow quarters and more in strong ones. At year-end, your annual return (BIR Form 1701 or 1701A) reconciles the total, so a low year simply means a smaller annual tax, with any overpaid quarterly tax refundable or creditable.
Sources & References (6)
Primary sources and the laws, regulations, and official issuances this page relies on. Each citation links directly to the issuing authority’s document.
- LawPhil Project (Arellano Law Foundation). “NIRC Sec. 24(A)(2) individual income tax schedule, as amended by RA 10963 (TRAIN) — 2023-onward graduated rates.” lawphil.net. RA 10963 (TRAIN), amending NIRC Sec. 24(A)(2)(a): 0% to P250,000; 15%; P22,500 + 20%; P102,500 + 25%; P402,500 + 30%; P2,202,500 + 35% over P8M. Accessed .
- Bureau of Internal Revenue. “BIR official income tax information page.” bir.gov.ph. Bureau of Internal Revenue — Income Tax. Accessed .
- Social Security System. “SSS contribution schedule (15% total, 5% EE share, MSC floor P5,000 / ceiling P35,000).” sss.gov.ph. SSS Circular No. 2024-006 implementing RA 11199 (Social Security Act of 2018). Accessed .
- Philippine Health Insurance Corporation. “PhilHealth premium schedule (5% premium, 2.5% EE share, income floor P10,000 / ceiling P100,000).” philhealth.gov.ph. RA 11223 (Universal Health Care Act); PhilHealth premium schedule confirmed for CY 2026. Accessed .
- Home Development Mutual Fund (Pag-IBIG). “Pag-IBIG contribution schedule (1%/2% EE tiers, P10,000 max fund salary).” pagibigfund.gov.ph. HDMF (Pag-IBIG) Circular No. 460. Accessed .