Income Tax Philippines Calculator (2024)

If you're wondering how much and how to calculate your income tax in the Philippines, this income tax in the Philippines calculator is for you. The Republic of the Philippines Bureau of Internal Revenue (BIR Philippines) income tax calculation is easy to do once you understand how.

In this calculator, you'll be able to explore the following:

• What the income tax is for;
• How to use this BIR income tax calculator;
• How to determine your benefits contributions;
• How to calculate income tax in the Philippines; and
• Some frequently asked questions about the BIR income tax calculations.

As a responsible citizen of the country, a Filipino individual earning at least ₱1,000 monthly is mandated to pay tax to the government amounting to a percentage of their taxable income – an amount calculated by deducting an individual's benefits contributions from their gross monthly income.

Below are the different benefits that each qualified Filipino citizen should know.

Benefits and services

The Social Security System, or SSS, is a Filipino government agency that provides social security to qualified Filipino citizens. Some of the benefits SSS offers to its members are insurance claims for sickness, disability, maternity, and funeral benefits. Members can also apply for loans, depending on how much they've already contributed to their savings. The SSS benefit is almost similar to the 401(k) in the United States. You can learn more about 401(k) by checking out our 401k calculator.

On the other hand, the Philippine Health Insurance Corporation, or PhilHealth, is a government-owned company like the SSS but focuses on health and medical benefits. PhilHealth members can enjoy a portion of their hospitalization bills, laboratory fees, and other medical expenses shouldered by PhilHealth.

Lastly, the Home Development Mutual Fund, also called the "Pag-IBIG Fund," is another government-owned company that offers its members a convenient way to manage their savings. Pag-IBIG Fund can also help Filipinos with their finances when it comes to purchasing a house with the help of housing loans.

This calculator will discuss how to calculate monthly withholding income taxes. We choose to discuss them on a monthly basis since it will be easier because we deduct the mentioned benefits contributions monthly.

This BIR income tax calculator is very easy to use. All you have to do is select your employment status (whether you're employed by a company or self-employed) and enter your monthly income. Our tool will instantly show you your corresponding taxable income and withholding tax.

You can also see the total deductions calculated and net pay after tax and after deductions in the Advanced mode of our calculator. You can activate that mode by clicking on the Advanced mode button below our tool.

Go ahead and try it out yourself! 🙂

As mentioned earlier, we have to deduct our benefits contributions from our monthly incomes to know how much of our incomes are taxable. That is because these contributions are non-taxable.

In the next portion of this text, we'll discuss how we determine each person's benefit contribution in preparation for the computation of their income tax.

SSS contribution

To determine how much of your income goes to your monthly SSS contribution, here is the summarized table of the SSS Contribution Table for 2023 that you can use:

In this simplified SSS contribution table, we can see the total employee share for employed individuals. If you want to compute it, the total employee share is 4.5% of the corresponding monthly salary credit of an individual's compensation range.

If you're a self-employed individual, you have to calculate 14% of the corresponding monthly salary credit of the compensation range that your monthly salary belongs. Then, add an employee compensation of ₱10 (for monthly incomes below ₱14,750) or ₱30 (for monthly incomes ₱14,750 and above). In equation form, we express that as:

where:

• $\text{SSS contribution}$SSScontribution – SSS contribution of a self-employed individual;
• $\text{MSC}$MSC – Monthly salary credit; and
• $\text{EC}$EC – Employees' compensation.

PhilHealth contribution

We can determine our PhilHealth contributions by using the table provided by PhilHealth, as shown below:

Note that PhilHealth updates the premium rate and salary ranges almost every year. So be sure to use the correct premium rate for your calculations.

For PhilHealth contributions, the employer and the employee divide the monthly premium in half for employed individuals. On the other hand, a self-employed individual shoulders the entire monthly premium alone.

Pag-IBIG contribution

For the Pag-IBIG contribution in 2023, we use this table:

In the table above, we see a company-employed individual's employee share and the employer's share for this benefit. If you're a self-employed individual, you'll have to shoulder both the employee and the employer share monthly.

Note that the maximum employee share is only ₱100. The same thing applies to the maximum employer share. A ₱100-share starts at a monthly compensation of ₱5,000 (₱5,000 × 2% = ₱100). That means if you're self-employed and earning at least ₱5,000 monthly, your Pag-IBIG contribution should be ₱200 (₱100 for the employee share + ₱100 for the employer share = ₱200).

Total contributions

After determining your monthly SSS, PhilHealth, and Pag-IBIG contributions, your next step is to add them together to find your total contributions. Then, you have to subtract your total contributions from your monthly income to get your taxable income.

Now that we have discussed how much of your income is taxable, we can discuss how to calculate income taxes in the Philippines in the next section of this text.

Calculating the income tax in the Philippines is easier than you might think. However, we first need to know the supplementary revised withholding tax table provided by the Bureau of Internal Revenue of the Philippines on their website.

Since we're dealing with monthly incomes, here is a simplified version for your convenience:

where:

• $\text{WT}$WT – Withholding tax;
• $\text{FT}$FT – Fixed tax as indicated on the table;
• $\text{rate}$rate – Rate as shown on the table;
• $\text{TI}$TI – Taxable income; and
• $\text{CL}$CL – Compensation level (also, on the table).

Let's say your gross monthly income as an employed individual is ₱40,000.00. Following the guidelines shown earlier in finding your corresponding benefits contribution, we get the following amounts:

• SSS contribution: ₱1,125.00
• PhilHealth contribution: ₱800.00
• Pag-IBIG contribution: ₱100.00

That gives us a total contribution of ₱2,025.00. That also means your taxable income is equal to ₱40,000.00 - ₱2,025.00 = ₱37,975.00. By checking our simplified table, we can see that this taxable income is within the ₱33,333.00 to ₱66,666.00 compensation range. By substituting in the equation the values for the fixed tax, compensation level, and rate for this compensation range, we calculate the withholding tax as follows:

We can also take a step further and subtract our calculated withholding tax from your monthly income to find your net pay after tax equal to ₱40,000.00 - ₱3,660.50 = ₱36,339.50.

We can also add the withholding tax we calculated to the total contributions we computed earlier to determine your total deductions to be ₱2,025.00 + ₱3,660.50 = ₱5,685.50.

Finally, we can subtract your total deductions from your monthly income to find your net pay after deductions (or your "take-home" amount) equal to ₱40,000.00 - ₱5,685.50 = ₱34,314.50.

You can also divide these values by two to find your average withholding tax, taxable income, deductions, and net pay if you're getting compensated semi-monthly.

However, since some employers distribute the deductions of your contributions differently (say, on your first pay, they deduct your SSS contribution, and on your second pay, your PhilHealth and Pag-IBIG contributions), more precise amounts vary.

For such cases, please refer to the original revised withholding tax table and recalculate your semi-monthly taxable income to calculate your withholding tax correctly.

The monthly tax for a monthly income of ₱30,000 in the Philippines is ₱1,468.40. We get that value by:

1. Subtracting the total contributions of ₱1,825 (₱1,125 for SSS, ₱600 for PhilHealth, and ₱100 for Pag-IBIG) from the monthly income of ₱30,000 to get the taxable income of ₱28,175.

2. Based on the revised withholding tax table of BIR, since this taxable income is above ₱20,833 and below ₱33,332, we subtract ₱20,833 from ₱28,175 to get ₱7,342.

3. Finally, we calculate 20% of the taxable income for this compensation range to arrive at a tax value of ₱7,342 × 0.2 = ₱1,468.40.

The tax for an individual earning a taxable income of ₱250,000 in a year is ₱0. In the Philippines, the government exempts every Filipino's first ₱250,000 earnings from tax calculations.

If you earn more than that but less than ₱400,000, you have to subtract ₱250,000 from your annual taxable income and multiply the tax rate applicable to you (in this case, 20%). You can refer to BIR's withholding tax table for your tax rate if you're earning more.

To calculate income tax in the Philippines:

1. Calculate your taxable income by subtracting your benefits contributions from your income.
2. Check BIR's revised withholding tax table for at which your taxable income falls.
3. Note your corresponding fixed tax, compensation level, and tax rate.
4. Substitute those values in this equation to find your income tax:

tax = FT + (TI - CL) × rate

where:

• tax – Income tax;
• FT – Fixed tax;
• TI – Taxable income;
• CL – Compensation level; and
• rate – Tax rate.