Complete Tax Guide for Employees
Complete tax guide for employed individuals in the Philippines, covering income tax, withholding, registration, and filing requirements.
Last Updated: June 13, 2026
Quick Answer
Filipino employees pay income tax under the TRAIN Law graduated rates — the first ₱250,000 of annual taxable income is exempt (0%), then 15% to 35% above it. Your employer withholds tax each payday and issues BIR Form 2316 at year-end. Most single-employer staff need not file a separate return if the correct tax was withheld.
Calculate with Income Tax CalculatorKey Takeaways
- check_circleAll employees earning above the statutory minimum threshold must register with the BIR and file an Annual Income Tax Return by April 15 of the following year.
- check_circleYour employer withholds income tax monthly under the PAYE system; the amount depends on your gross salary and dependents claimed on your Withholding Tax Exemption Certificate.
- check_circleThe first ₱250,000 of annual taxable income is exempt (the 0% bracket under the TRAIN Law); income above it is taxed at 15% to 35%. Personal and dependent exemptions were abolished by the TRAIN Law effective 2018.
- check_circleIf excess tax was withheld, you may claim a refund; if insufficient tax was withheld, you must pay the difference when filing your return.
- check_circleUpdate your Withholding Tax Exemption Certificate if your family status or number of dependents changes to ensure accurate withholding.
- check_circleKeep payslips, tax statements, and receipts for deductible expenses to support your tax return and defend against audits.
Tax Obligations
Annual Income Tax Return (ITR)
Employees who are required to file (e.g., with two or more employers during the year, or with additional business/professional income) file an annual income tax return — Form 1700 for purely compensation income, or Form 1701 if they also have business or professional income. Most employees with a single employer who withheld the correct tax are substituted-filed via Form 2316 and need not file a separate return.
Monthly Income Tax Withholding
Your employer withholds income tax from your monthly salary based on the BIR withholding tax tables and remits it using the Monthly Remittance Return of Compensation Withholding (BIR Form 1601-C). At year-end the employer issues you BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld), which summarizes your compensation and the tax withheld. (Form 2307 is a certificate of CREDITABLE tax withheld on income payments such as professional fees, not on compensation.)
Update of Employee Registration Information
When you start a job or your registration details change (e.g., a new employer, change of name or RDO), you update your records with the BIR through your employer. Note that the TRAIN Law abolished personal and dependent exemptions effective 2018, so there are no longer exemptions to declare for withholding purposes.
Registration with the BIR
All employees earning taxable income must register with the BIR to obtain a Taxpayer Identification Number (TIN). Your employer typically facilitates this, but you must personally register if you have other income sources or are self-employed.
Registration Process
Obtain a Taxpayer Identification Number (TIN)
Apply for a TIN at any BIR office or authorized partner institution. Submit BIR Form 1901 (Application for Registration), a valid government-issued ID, proof of income (e.g., employment contract or payslip), and proof of address (e.g., utility bill or lease agreement). Registration is free and typically completed within one business day.
Provide Your TIN and Registration Details to Your Employer
Give your TIN and registration details to your employer's Human Resources or Payroll department so they can withhold income tax correctly using the BIR withholding tax tables. The TRAIN Law abolished personal and dependent exemptions effective 2018, so there are no exemptions to declare; withholding is based on your compensation level and the first ₱250,000 of annual taxable income being taxed at 0%.
Maintain Tax Records
Keep copies of all payslips, your annual Certificate of Compensation Payment/Tax Withheld (Form 2316), receipts for deductible expenses, and any other tax-related documents. These records support your Annual ITR and are essential if audited by the BIR.
File Your Annual Income Tax Return
By April 15 of the following year, file your Annual ITR (BIR Form 1700 or 1701) with the BIR office serving your jurisdiction. Report total annual compensation, claim allowable deductions, and reconcile monthly withholding against your final tax liability. File electronically via BIR eFPS or manually at the BIR office.
Common Deductions & Credits
Tax-Exempt Threshold (0% Bracket)
First ₱250,000 of annual taxable income is taxed at 0%
Built into the TRAIN graduated rate table; not a separate stackable deduction
Mandatory Contributions (SSS, PhilHealth, Pag-IBIG)
Employee share excluded from taxable compensation
Mandatory government contributions are not part of taxable income (NIRC Sec. 32(B)(7)(f))
13th-Month Pay and Other Benefits
Exempt up to ₱90,000 combined per year
13th-month pay and other benefits are tax-exempt up to the ₱90,000 ceiling (TRAIN Law)
Excess Withholding Tax Refund
Refunded or credited if more tax was withheld than your final liability
Reconciled when your employer issues BIR Form 2316 (or when you file your annual return)
Applicable Taxes
Tax Calculators for Employees
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...
Calculate Nowaccount_balanceWithholding Tax Calculator
Calculate withholding tax for employee compensation and professional fees. Get accurate tax withholding amounts based on BIR withholding tables.
Calculate Nowpayments13th Month Pay Tax Calculator
Calculate tax on your 13th month pay and other bonuses. The first ₱90,000 is tax-exempt under Philippine law.
Calculate NowCommon Questions
Most employees don't need to file if they have only one employer who withheld taxes correctly. You must file if you have multiple employers, additional income, or want to claim extra deductions.
Form 2316 is the Certificate of Compensation Payment/Tax Withheld. Your employer provides this annually, showing your total compensation and taxes withheld. Keep this document for your records.
Yes, if your employer over-withheld taxes. You can claim a refund by filing an annual income tax return (Form 1700). The refund process can take months, so consider adjusting your withholding allowances instead.
Your employer uses BIR withholding tax tables based on your monthly compensation and withholding exemptions. Annual tax is computed using progressive rates (0%-35%). The first ₱250,000 is tax-free; higher amounts are taxed at graduated rates.
Your new employer should request your BIR Form 2316 from your previous employer to ensure correct annual tax computation. If you had two employers simultaneously, you must file an annual return.
Sources & References (5)
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) — graduated income tax on individuals (0% up to ₱250k, 15%-35%).” lawphil.net. National Internal Revenue Code, Section 24(A), as amended by RA 10963 (TRAIN) and RA 11976. Accessed .
- Official Gazette of the Philippines. “RA 10963 (TRAIN) — revised individual rates, ₱90k 13th-month ceiling, repeal of personal/dependent exemptions.” officialgazette.gov.ph. Republic Act No. 10963 (TRAIN), as enacted. Accessed .
- Bureau of Internal Revenue. “BIR RR No. 11-2018 — withholding tax on compensation; Form 2316.” bir.gov.ph. BIR Revenue Regulations No. 11-2018. Accessed .
- Bureau of Internal Revenue. “BIR Form 2316 — Certificate of Compensation Payment/Tax Withheld.” bir.gov.ph. BIR Form 2316 (official BIR form). Accessed .