Salary Tax Calculator

Gross salary is your total compensation before any deductions (basic pay + allowances + bonuses). Taxable income is gross salary minus your mandatory employee contributions to SSS, PhilHealth, and Pag-IBIG, which are excluded from taxable compensation under BIR RR 2-98 Sec 2.78.1(B)(12) (as amended by RR 11-2018). There is no longer a separate personal exemption to subtract—TRAIN repealed it in 2018. Instead, the first ₱250,000 of taxable income is simply taxed at 0% under the graduated table. For example, if your gross salary is ₱500,000 and your mandatory contributions total ₱25,000, your taxable income is ₱500,000 − ₱25,000 = ₱475,000, and the 0% bracket then covers the first ₱250,000 of that amount.

Yes. By default ("Auto-compute" set to Yes), the calculator derives your employee SSS, PhilHealth, and Pag-IBIG shares from your gross salary using the 2025 government tables (SSS Circular 2024-006, PhilHealth Circular 2024-0001, HDMF Circular 460), deducts them from your take-home pay, AND excludes them from taxable income before applying the tax brackets. Your mandatory employee contributions are excluded from taxable compensation under BIR RR 2-98 Sec 2.78.1(B)(12) (as amended by RR 11-2018)—this applies to employees, not just the self-employed. If you would rather enter your own monthly figures, switch Auto-compute to No and type them in the manual fields.

No. The TRAIN Law (RA 10963), through Section 12 repealing NIRC Section 35, removed the old ₱50,000 personal exemption and the ₱25,000-per-dependent additional exemption effective January 1, 2018. As of 2026 there are no personal or dependent exemptions—your number of dependents no longer changes your income tax. What replaced them is the 0% first bracket: the first ₱250,000 of your annual taxable income is taxed at 0% for everyone, single or married, with or without children. Do not list dependent exemptions on your return; they no longer exist.

The TRAIN Law (RA 10963) replaced the old graduated brackets and removed personal and dependent exemptions. The pre-2018 system taxed income from the first peso (top rate 32%) and allowed a ₱50,000 personal exemption plus ₱25,000 per dependent. TRAIN repealed those exemptions and instead exempts the first ₱250,000 of taxable income for everyone. Under the second-phase rates effective January 1, 2023 (NIRC Sec 24(A)(2)(a), still in force in 2026) there are six brackets: 0% up to ₱250,000; 15% on the next slice to ₱400,000; 20% to ₱800,000; 25% to ₱2,000,000; 30% to ₱8,000,000; and 35% above ₱8,000,000. Most employees earning below ₱2,000,000 pay less tax than under the old system.

Your monthly withholding is based on your current salary. If your salary increases (e.g., promotion, bonus), your withholding will increase proportionally. If your salary decreases, your withholding decreases. At year-end, you file your annual ITR to reconcile actual income and tax paid. If you overpaid, you claim a refund; if you underpaid, you owe additional tax. Inform your employer's payroll of any significant changes to ensure accurate withholding.

For pure compensation earners (employees), the only amounts removed from taxable income are your mandatory SSS, PhilHealth, and Pag-IBIG employee shares—there are no itemized personal deductions and no dependent exemptions. The first ₱250,000 is already taxed at 0% for everyone. If you instead have self-employment or business income, you can deduct business expenses and cost of sales (itemized), or elect the 40% Optional Standard Deduction under NIRC Sec 34(L), or choose the 8% flat tax if your gross receipts stay under the ₱3,000,000 VAT threshold. Self-employed individuals should keep detailed records of deductible expenses. Consult a tax professional for your specific situation.

The marginal tax rate is the rate applied to your last peso of income (your tax bracket). The effective tax rate is your total tax divided by total income. Due to graduated brackets, your effective rate is always lower than your marginal rate. Example: an employee with ₱1,000,000 of taxable income falls in the ₱800,001–₱2,000,000 bracket, so the marginal rate is 25%. The tax is ₱102,500 + 25% × (₱1,000,000 − ₱800,000) = ₱102,500 + ₱50,000 = ₱152,500, which is an effective rate of about 15.25% (₱152,500 ÷ ₱1,000,000). Understanding both helps you plan income and bonuses strategically.

Pure compensation earners file BIR Form 1700 (the annual ITR for employees) by April 15 of the following year; Forms 1701 and 1701A are for self-employed, professionals, and mixed-income earners, not employees. If your only employer withheld tax correctly and gave you Form 2316, you may even qualify for substituted filing and not have to file 1700 at all. The ITR (or your Form 2316) reconciles your actual liability against the tax withheld on your payslips. If withholding exceeds liability you get a refund; if liability exceeds withholding you owe the difference. Refunds usually arise from rounding or a mid-year salary drop—not from dependent exemptions, which no longer exist.

OFWs earning foreign-source income are generally exempt from Philippine income tax on that income under NIRC Section 32(A)(5)(a). However, OFWs earning Philippine-source income (e.g., from a Philippine employer or business) are subject to Philippine income tax. If you are an OFW, consult the BIR or a tax professional to determine which income is taxable and how to file your ITR correctly. Some countries have tax treaties with the Philippines that may affect your tax liability.

If your employer fails to withhold or withholds incorrectly, you are still liable for the tax when you file your annual ITR. However, you can claim the actual withholding (shown on Form 2316) as a credit. If your employer significantly underpaid, you may owe additional tax plus interest (12% per annum) and penalties. Report the issue to your employer's payroll department immediately and request a corrected Form 2316. If unresolved, file a complaint with the BIR. Always keep copies of your payslips and Form 2316 for your records.

Yes, include bonuses and 13th-month pay in your gross annual salary for an accurate total tax calculation. However, some employers withhold separately on bonuses using a different method (e.g., flat percentage or separate bracket calculation). Check your payslip to see how your employer handles bonus withholding. For annual planning, add all expected bonuses to your base salary and use this calculator to estimate your total annual tax liability. Reconcile with your actual withholding when you file your ITR.