Quick answer
Under the TRAIN law tax table that still applies in 2026, the first ₱250,000 of annual taxable income is tax-free, and rates rise from 15% to 35% above that. For employees, subtract your SSS, PhilHealth and Pag-IBIG contributions (and non-taxable benefits) from gross pay, then apply the table. A ₱30,000 monthly salary pays about ₱1,007.55 a month in withholding tax.
Key takeaways
- Annual taxable income up to ₱250,000 is exempt, which is roughly ₱20,833 a month.
- Taxable income = gross compensation − SSS, PhilHealth and Pag-IBIG employee shares − non-taxable items (de minimis benefits, 13th month and bonuses up to ₱90,000).
- Rates are graduated: 15%, 20%, 25%, 30% and 35% on the portion above each bracket.
- Minimum wage earners are exempt from income tax on their minimum wage, holiday pay, overtime and night differential.
- Employees with one employer usually don't file an ITR; the employer's BIR Form 2316 serves as substitute filing.
On this page
- The 2026 income tax table
- Step-by-step: compute your monthly withholding tax
- Withholding tax and take-home pay at common salaries
- Annual computation: how the year-end adjustment works
- What is not taxed
- Do you need to file an income tax return?
- Need a TIN first?
- Common mistakes
- Frequently asked questions
- Sources
If you are employed in the Philippines, your income tax is withheld from every payslip, but it helps to know how the number is computed. It lets you check your payslip, estimate a job offer's real take-home pay, and see why your contributions lower your tax.
The 2026 income tax table
The graduated rates under the TRAIN law (RA 10963) that took effect in January 2023 still apply in 2026.
| Annual taxable income | Tax due |
|---|---|
| ₱250,000 and below | ₱0 |
| Over ₱250,000 to ₱400,000 | 15% of the excess over ₱250,000 |
| Over ₱400,000 to ₱800,000 | ₱22,500 + 20% of the excess over ₱400,000 |
| Over ₱800,000 to ₱2,000,000 | ₱102,500 + 25% of the excess over ₱800,000 |
| Over ₱2,000,000 to ₱8,000,000 | ₱402,500 + 30% of the excess over ₱2,000,000 |
| Over ₱8,000,000 | ₱2,202,500 + 35% of the excess over ₱8,000,000 |
Monthly withholding tax table
Employers apply the monthly version of the same brackets:
| Monthly taxable compensation | Withholding tax |
|---|---|
| ₱20,833 and below | ₱0 |
| ₱20,833 to ₱33,332 | 15% of the excess over ₱20,833 |
| ₱33,333 to ₱66,666 | ₱1,875 + 20% of the excess over ₱33,333 |
| ₱66,667 to ₱166,666 | ₱8,541.80 + 25% of the excess over ₱66,667 |
| ₱166,667 to ₱666,666 | ₱33,541.80 + 30% of the excess over ₱166,667 |
| ₱666,667 and above | ₱183,541.80 + 35% of the excess over ₱666,667 |
Step-by-step: compute your monthly withholding tax
- Start with gross taxable compensation: basic salary plus taxable allowances, overtime and other taxable pay.
- Subtract your mandatory contributions (employee share only): SSS, PhilHealth and Pag-IBIG.
- Apply the monthly withholding table to the result.
Example: ₱30,000 monthly basic salary
| Item | Amount |
|---|---|
| Gross salary | ₱30,000.00 |
| Less SSS (₱30,000 MSC × 5%) | ₱1,500.00 |
| Less PhilHealth (₱30,000 × 2.5%) | ₱750.00 |
| Less Pag-IBIG | ₱200.00 |
| Taxable compensation | ₱27,550.00 |
| Tax: 15% × (₱27,550 − ₱20,833) | ₱1,007.55 |
| Take-home pay | ₱26,542.45 |
Withholding tax and take-home pay at common salaries
| Monthly basic | SSS | PhilHealth | Pag-IBIG | Withholding tax | Take-home |
|---|---|---|---|---|---|
| ₱20,000 | ₱1,000 | ₱500 | ₱200 | ₱0 | ₱18,300 |
| ₱25,000 | ₱1,250 | ₱625 | ₱200 | ₱313.80 | ₱22,611 |
| ₱30,000 | ₱1,500 | ₱750 | ₱200 | ₱1,007.55 | ₱26,542 |
| ₱40,000 | ₱1,750 | ₱1,000 | ₱200 | ₱2,618.40 | ₱34,432 |
| ₱50,000 | ₱1,750 | ₱1,250 | ₱200 | ₱4,568.40 | ₱42,232 |
| ₱80,000 | ₱1,750 | ₱2,000 | ₱200 | ₱10,887.55 | ₱65,162 |
Assumes no taxable allowances, overtime or other deductions. SSS uses the 2026 MSC cap of ₱35,000 and PhilHealth the 5% rate.
Annual computation: how the year-end adjustment works
Your employer recomputes your tax in December using your total annual income. This is why your December payslip may show a refund or extra deduction.
Example: annual taxable compensation of ₱500,000.
- ₱22,500 + 20% × (₱500,000 − ₱400,000) = ₱22,500 + ₱20,000 = ₱42,500
If ₱44,000 was withheld during the year, you get a ₱1,500 refund in December; if ₱41,000 was withheld, ₱1,500 more is deducted.
What is not taxed
- SSS, PhilHealth and Pag-IBIG employee contributions (including union dues).
- 13th month pay and other benefits up to ₱90,000 a year combined. See 13th month pay computation.
- De minimis benefits within BIR limits.
- Minimum wage earners: statutory minimum wage plus holiday pay, overtime, night differential and hazard pay are exempt.
Do you need to file an income tax return?
Usually not, if you are a pure employee with one employer. Your employer issues BIR Form 2316 by January 31 of the following year, which serves as your substitute filing. Keep it; banks and embassies often ask for it.
You must file BIR Form 1700 if you had two or more employers in the same year and they did not consolidate your income, or if you are a non-resident citizen with Philippine compensation income.
If you also have business or freelance income, you file BIR Form 1701 (annual) and quarterly returns, and your compensation and business income are combined. The 8% option applies only to the business portion. See our freelancer BIR registration guide.
The annual filing deadline is April 15.
Need a TIN first?
New employees need a Tax Identification Number before their first payroll. Here is how to get a TIN online.
Common mistakes
- Forgetting the contributions deduction, which overstates the tax.
- Assuming a raise means less take-home pay. Only the income above each bracket is taxed at the higher rate, so a raise always increases take-home pay.
- Ignoring Form 2316 from a previous employer when you change jobs mid-year. Give it to your new employer so they can compute your annual tax correctly.
Frequently asked questions
How much tax do I pay on a ₱25,000 monthly salary?
After SSS (₱1,250), PhilHealth (₱625) and Pag-IBIG (₱200), taxable income is ₱22,925. The withholding tax is 15% of the amount over ₱20,833, or about ₱313.80 a month.
Is a ₱20,000 salary taxable in the Philippines?
No income tax is due. After mandatory contributions, taxable income is about ₱18,300 a month, below the ₱20,833 monthly threshold that corresponds to the ₱250,000 annual exemption.
Do I need to file an income tax return if I am employed?
Not if you earn purely compensation income from one employer that withheld the correct tax, and you qualify for substituted filing. Your employer gives you BIR Form 2316. You must file BIR Form 1700 yourself if you had two or more employers in the same year without proper consolidation, or if you have other income.
What is the tax rate for freelancers and self-employed?
Self-employed individuals and professionals with gross sales or receipts not above ₱3 million can choose the 8% income tax on gross receipts above ₱250,000, instead of the graduated rates plus 3% percentage tax. See our freelancer BIR guide for a comparison.
Are allowances taxable?
Most fixed allowances are taxable compensation. De minimis benefits within BIR limits (such as rice subsidy, uniform and clothing allowance, and medical cash allowance to dependents) are exempt, and amounts above the limits count toward the ₱90,000 bonus exemption.
Sources
Figures checked against these official and primary sources on October 4, 2026. Government rates and promos change, so confirm on the agency's site before you act.
- Bureau of Internal Revenue: Income tax and withholding tax tables
- Republic Act No. 10963, TRAIN Law
- Republic Act No. 11976, Ease of Paying Taxes Act
General information, not personal financial, tax or legal advice. See our editorial standards and disclaimer. Found an outdated figure? Email support@success.ph.