Income Tax Philippines Calculator
Compute monthly income tax, SSS, PhilHealth, Pag-IBIG, and net take-home using 2025 TRAIN Law rates.
🇵🇭 Philippines Income Tax — TRAIN Law Overview
The Philippines personal income tax system is governed by the Tax Reform for Acceleration and Inclusion (TRAIN) Law, Republic Act 10963. The most recent rate schedule took effect January 1, 2023, and this is the schedule in use for 2025. The TRAIN Law was a landmark reform that reduced income tax for most Filipinos — notably, annual compensation income of ₱250,000 and below is fully exempt from income tax, which means a worker earning around ₱20,833 per month (before mandatory contributions) pays zero income tax.
In addition to income tax, every employed Filipino makes mandatory monthly contributions to three government programs: the Social Security System (SSS), which covers retirement and social insurance; PhilHealth, which funds universal health coverage; and the Pag-IBIG Fund (HDMF), which finances housing loans and provident savings. These three contributions are deductible from gross compensation before computing taxable income, so they reduce not only take-home pay but also the income tax base.
The Bureau of Internal Revenue (BIR) collects income tax through the withholding system. Employers compute the applicable annual tax, divide it by 12, and withhold the monthly amount from each payslip. For most salaried workers with a single employer, this constitutes full payment of the tax obligation — no separate year-end filing is required under the substituted filing system. Self-employed individuals, professionals, and workers with multiple employers must file annually by April 15.
📐 TRAIN Law Income Tax Formula
Annual Taxable Compensation
= Annual Gross Salary − Annual SSS − Annual PhilHealth − Annual Pag-IBIG
Annual Income Tax (TRAIN Law 2023+)
₱0 – ₱250,000: 0%
₱250,001 – ₱400,000: 15% of excess over ₱250,000
₱400,001 – ₱800,000: ₱22,500 + 20% of excess over ₱400,000
₱800,001 – ₱2,000,000: ₱102,500 + 25% of excess over ₱800,000
₱2,000,001 – ₱8,000,000: ₱402,500 + 30% of excess over ₱2,000,000
Over ₱8,000,000: ₱2,202,500 + 35% of excess over ₱8,000,000
Mandatory Contributions (Employee Share, 2024 Rates)
SSS = 4.5% of monthly salary, max ₱1,350/month (MSC cap ₱30,000)
PhilHealth = 2.5% of monthly salary, max ₱2,500/month (cap ₱100,000)
Pag-IBIG = 2% of monthly salary, max ₱100/month
📖 How to Use This Calculator
Steps
1
Enter your monthly gross salary — this is your basic pay before any tax or contributions are deducted. Use the slider or type the amount directly.
2
Click Calculate Tax to compute your monthly income tax, SSS, PhilHealth, and Pag-IBIG contributions.
3
Review your monthly net take-home pay — this is gross salary minus income tax and all three mandatory contributions.
4
Expand the slab breakdown to see exactly which TRAIN Law bracket applies to each tier of your annual taxable compensation.
5
Check the annual figures for year-end planning, ITR preparation, or verifying your employer's year-to-date withholding certificate (BIR Form 2316).
💡 Example Calculations
Example 1 — ₱20,000/month (near the tax-free threshold)
1
Annual gross = ₱20,000 × 12 = ₱240,000
2
SSS = ₱20,000 × 4.5% = ₱900/mo × 12 = ₱10,800. PhilHealth = ₱20,000 × 2.5% = ₱500/mo × 12 = ₱6,000. Pag-IBIG = ₱100/mo × 12 = ₱1,200.
3
Annual taxable = ₱240,000 − ₱10,800 − ₱6,000 − ₱1,200 = ₱222,000 → 0% bracket → annual tax = ₱0
Monthly take-home = ₱20,000 − ₱900 − ₱500 − ₱100 = ₱18,500 | Income tax = ₱0
Try this example →Example 2 — ₱50,000/month (typical professional)
1
Annual gross = ₱50,000 × 12 = ₱600,000
2
SSS = ₱1,350/mo (capped). PhilHealth = ₱50,000 × 2.5% = ₱1,250/mo. Pag-IBIG = ₱100/mo. Annual contribs = (₱1,350 + ₱1,250 + ₱100) × 12 = ₱32,400.
3
Annual taxable = ₱600,000 − ₱32,400 = ₱567,600. Tax: 0 on ₱0–₱250K + 15% × ₱150K + 20% × (₱567,600 − ₱400K) = ₱0 + ₱22,500 + ₱33,520 = ₱56,020 per year.
Monthly tax = ₱56,020 ÷ 12 ≈ ₱4,668 | Monthly take-home = ₱50,000 − ₱4,668 − ₱1,350 − ₱1,250 − ₱100 = ₱42,632
Try this example →Example 3 — ₱150,000/month (senior manager)
1
Annual gross = ₱150,000 × 12 = ₱1,800,000
2
SSS = ₱1,350/mo (capped). PhilHealth = ₱2,500/mo (capped). Pag-IBIG = ₱100/mo. Annual contribs = ₱47,400.
3
Annual taxable = ₱1,800,000 − ₱47,400 = ₱1,752,600. Tax = ₱102,500 + 25% × (₱1,752,600 − ₱800,000) = ₱102,500 + ₱238,150 = ₱340,650 per year.
Monthly tax ≈ ₱28,388 | Monthly take-home ≈ ₱117,762 | Effective rate ≈ 18.9%
Try this example →❓ Frequently Asked Questions
What are the income tax brackets in the Philippines for 2025?
The Philippines uses TRAIN Law brackets (effective January 1, 2023) for annual taxable compensation: ₱0–₱250,000 at 0%; ₱250,001–₱400,000 at 15% of excess over ₱250,000; ₱400,001–₱800,000 at ₱22,500 plus 20% of excess over ₱400,000; ₱800,001–₱2,000,000 at ₱102,500 plus 25% of excess over ₱800,000; ₱2,000,001–₱8,000,000 at ₱402,500 plus 30% of excess over ₱2,000,000; over ₱8,000,000 at ₱2,202,500 plus 35% of excess over ₱8,000,000. These brackets are in effect for 2025.
What is the TRAIN Law?
The Tax Reform for Acceleration and Inclusion (TRAIN) Law, Republic Act 10963, took effect January 1, 2018 and was revised January 1, 2023. It restructured personal income tax to exempt the first ₱250,000 of annual income from tax, reduced rates for middle earners, and offset revenue by raising excise taxes on fuel, vehicles, tobacco, and sweetened beverages. The 2023 revision further lowered rates at the mid-income range compared to the initial 2018 schedule.
How is the SSS contribution calculated?
The Social Security System (SSS) employee contribution is 4.5% of monthly salary, capped at a monthly salary credit (MSC) of ₱30,000. The maximum monthly employee contribution is therefore ₱1,350. The employer contributes a matching 9.5%. SSS contributions fund retirement, disability, sickness, maternity, and death benefits for private-sector employees.
How is PhilHealth contribution computed?
PhilHealth contribution is 5% of monthly basic salary, split equally: 2.5% employee and 2.5% employer. The maximum monthly basic salary for computation is ₱100,000, so the maximum monthly employee contribution is ₱2,500. For salaries below ₱10,000, a minimum monthly premium applies. PhilHealth funds inpatient and outpatient benefits under the Universal Health Care Act.
How much do I contribute to Pag-IBIG?
For monthly salaries of ₱1,500 and above, the Pag-IBIG (HDMF) employee contribution is 2% of monthly compensation, with a maximum of ₱100 per month. The employer matches with ₱100, giving a combined monthly fund contribution of ₱200. Higher voluntary contributions are allowed and earn annual dividends. Pag-IBIG primarily finances affordable housing loans for its members.
Are SSS, PhilHealth, and Pag-IBIG deductible from taxable income?
Yes. Mandatory SSS, PhilHealth, and Pag-IBIG contributions are excluded from gross compensation before computing income tax. This means taxable compensation equals gross annual income minus total mandatory contributions. For example, a ₱30,000/month earner has annual gross ₱360,000 minus annual contributions of about ₱18,600, giving taxable compensation of ₱341,400 — which falls in the 15% bracket, not the 20% bracket.
Is the 13th month pay taxable in the Philippines?
The 13th month pay is exempt from income tax up to ₱90,000 per year. This exemption covers not just the mandated 13th month pay under PD 851, but also Christmas bonuses, productivity incentives, and similar payments — their combined total must not exceed ₱90,000 for full exemption. Any excess above ₱90,000 is included in taxable compensation and taxed at the applicable TRAIN bracket.
Who is required to file an income tax return in the Philippines?
Employees with purely compensation income from a single employer (where the employer withholds correctly) are exempt from filing an ITR — this is substituted filing. You must file BIR Form 1700 if you have two or more employers during the year, income from sources other than compensation, or are a non-resident alien. Self-employed individuals and professionals file BIR Form 1701. The deadline is April 15 of the following year.
What is withholding tax on compensation?
Withholding tax on compensation is the mechanism by which employers compute income tax on the employee's projected annual taxable compensation, divide by 12, and withhold the monthly instalment from the payslip. The employer remits this to the BIR via BIR Form 1601-C. Because the employer files on the employee's behalf, most salaried workers with one employer receive BIR Form 2316 at year-end instead of filing an ITR directly.
Is overtime pay taxable in the Philippines?
Yes. Overtime pay is included in gross compensation and subject to income tax at the same TRAIN Law brackets. There is no special overtime exemption. The only full exemption covers minimum wage earners: workers receiving the statutory regional minimum wage pay zero income tax on all compensation including overtime, holiday pay, hazard pay, and night shift differential under Section 24(A)(2)(b) of the Tax Code as amended by TRAIN.
What is the effective tax rate vs. marginal tax rate?
The marginal tax rate is the rate applicable to your highest income bracket. The effective tax rate is total income tax divided by gross income — always lower than the marginal rate because lower tiers are taxed at lower rates. For example, annual taxable compensation of ₱1,000,000 has a 25% marginal rate but an effective rate of about 15.25% (₱152,500 tax ÷ ₱1,000,000 gross). This calculator shows both figures.
How does this calculator handle the 13th month pay and bonuses?
This calculator uses regular monthly gross salary × 12 to estimate annual gross income. It does not automatically add the 13th month pay. If your 13th month pay exceeds ₱90,000, add the excess to your monthly equivalent (excess ÷ 12) before entering to get a more accurate picture. For most workers whose combined bonuses stay within the ₱90,000 exemption, the standard monthly calculation shown here represents a good estimate of regular withholding tax.