The first ₱250,000 of taxable income is exempt, and mandatory contributions come off before tax is worked out.
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Philippine income tax runs on the graduated schedule set by the TRAIN law (RA 10963), in its final form since 1 January 2023. The first ₱250,000 of annual taxable income is exempt entirely, and the top 35% rate applies only above ₱8,000,000.
Mandatory contributions to SSS, PhilHealth and Pag-IBIG are deducted from gross before tax is calculated, so they reduce the tax bill as well as take-home pay. That ordering matters: two people on the same gross can owe different tax if their contribution bases differ.
The 13th month pay and other benefits are exempt up to ₱90,000 a year. Above that, the excess is taxable and added to the annual computation.
| Taxable income | Rate | Notes |
|---|---|---|
| ₱0 – ₱250,000 | 0% | Exempt |
| ₱250,000 – ₱400,000 | 15% | on the excess over ₱250,000 |
| ₱400,000 – ₱800,000 | 20% | ₱22,500 + 20% of excess |
| ₱800,000 – ₱2,000,000 | 25% | ₱102,500 + 25% of excess |
| ₱2,000,000 – ₱8,000,000 | 30% | ₱402,500 + 30% of excess |
| ₱8,000,000 and above | 35% | ₱2,202,500 + 35% of excess |
Applies to taxable income — gross pay after mandatory SSS, PhilHealth and Pag-IBIG contributions. This is the second and final TRAIN rate cut; the schedule has been stable since 2023.
SSS at 4.5% of the monthly salary credit (capped at ₱30,000), PhilHealth at 2.5%, and Pag-IBIG at 2% capped at ₱200 a month. All three come off before tax.
The first ₱250,000 of what remains is exempt. Anyone earning around ₱21,000 a month or less typically pays no income tax at all once contributions are deducted.
Each band adds a fixed base amount plus a rate on the excess above the band floor. At ₱600,000 gross, taxable income of ₱566,400 falls in the ₱400,000–₱800,000 band: ₱22,500 plus 20% of the amount above ₱400,000.
13th month pay and other benefits are exempt up to ₱90,000 combined. Only the excess is taxable, and it is added to the annual computation rather than taxed separately.
Employee with one employer, standard contributions, excluding 13th month pay.
| Component | Monthly | Annual |
|---|---|---|
| Gross salary | ₱50,000.00 | ₱600,000.00 |
| SSS (4.5%) | (₱1,350.00) | (₱16,200.00) |
| PhilHealth (2.5%) | (₱1,250.00) | (₱15,000.00) |
| Pag-IBIG | (₱200.00) | (₱2,400.00) |
| Taxable income | ₱47,200.00 | ₱566,400.00 |
| Income tax | (₱4,648.33) | (₱55,780.00) |
| Net take-home pay | ₱42,551.67 | ₱510,620.00 |
| Effective income tax rate on gross | 9.3% | |
So if your gross salary is ₱600,000 a year in the Philippines — ₱50,000 a month — your net take-home pay is ₱42,551.67 a month, or ₱510,620.00 over the year. Income tax accounts for ₱55,780.00 of that, an effective 9.3% of gross, with contributions taking a further ₱33,600.00.
Computed from the same rates and order of operations the calculator uses, so this table and the calculator cannot disagree.
1 January 2023
The graduated schedule moved to its final form, lowering rates for everyone earning up to ₱8,000,000 while keeping the top rate at 35%. The ₱250,000 exemption was unchanged. This is the schedule still in force.
The first ₱250,000 of annual taxable income. Because SSS, PhilHealth and Pag-IBIG contributions are deducted first, someone earning roughly ₱21,000 a month or less generally pays no income tax at all.
The TRAIN graduated schedule: 0% up to ₱250,000, then 15%, 20%, 25%, 30% and 35% above ₱8,000,000. Each band adds a fixed base amount plus a rate on the excess. The schedule has been unchanged since January 2023.
Only above ₱90,000. That ceiling covers 13th month pay and other benefits combined across the year, so if your 13th month alone is below it and you receive no other benefits, none of it is taxed.
Yes. SSS, PhilHealth and Pag-IBIG are deducted from gross before taxable income is worked out, so they lower the tax bill as well as your take-home pay. This is why they appear above the taxable income line in the table.
Most employees with a single employer for the whole year qualify for substituted filing — the employer files BIR Form 2316 on your behalf. You must file yourself if you had more than one employer, or income from business or practice of a profession.
Because SSS is charged on the monthly salary credit, which is capped at ₱30,000. Everyone earning above that pays the same amount. PhilHealth and Pag-IBIG have their own ceilings, so total contributions flatten out as salary rises.
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