Calculate Philippine income tax with BIR graduated tax rates, SSS, PhilHealth, Pag-IBIG contributions, 13th month pay, and OSD vs itemized deductions.
The Philippines uses a graduated income tax system reformed under the TRAIN Law (Tax Reform for Acceleration and Inclusion), which significantly increased the tax-exempt threshold and simplified rates. Income up to ₱250,000 annually is tax-exempt, with rates ranging from 15% to 35% for income exceeding ₱8,000,000. That structure makes it easier to estimate tax once you know where your income falls in the bracket table.
In addition to income tax, Filipino employees contribute to three mandatory social benefit programs: SSS (Social Security System), PhilHealth (Philippine Health Insurance Corporation), and Pag-IBIG/HDMF (Home Development Mutual Fund). These contributions are shared between employer and employee and reduce monthly take-home pay. They are a major reason gross salary and actual take-home can differ quite a bit.
This calculator computes your Philippine tax estimate using the BIR graduated tax table, including the three major mandatory contribution programs. It supports both Optional Standard Deduction (OSD) at 40% and itemized deductions, and accounts for the tax-exempt threshold that applies to 13th month pay and similar benefits.
Use this estimate to compare take-home pay under different deduction choices, check the impact of mandatory contributions, and see how 13th month pay affects annual tax exposure. It also helps you compare OSD versus itemized deductions before you file, which is useful when you want to estimate the net benefit of each approach.
BIR Graduated Tax Table (TRAIN Law): - ₱0–250,000: 0% (exempt) - ₱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 - ₱8,000,001+: ₱2,202,500 + 35% of excess over ₱8,000,000
Result: ₱22,500 annual income tax
On ₱600,000 gross income with OSD (40%): taxable income after SSS/PhilHealth/Pag-IBIG and 40% OSD is approximately ₱328,000. Tax = 15% of (₱328,000 - ₱250,000) = ₱11,700. Effective rate around 2%.
Philippine payroll calculations are not just about the BIR rate table. SSS, PhilHealth, and Pag-IBIG contributions all affect net pay, and the final answer also changes when you compare OSD against itemized deductions. Bringing those pieces together is the main value of this calculator.
Employees who receive purely compensation income often rely on employer withholding and Form 2316, while self-employed taxpayers may need different BIR forms and quarterly filings. Use the result as a planning estimate, then match it to your actual filing category before treating it as a filing-ready number. That keeps the calculator useful as a planning tool without pretending to replace official filing guidance.
Contribution ceilings, implementation schedules, and tax rules can change. If you are using this for payroll, business planning, or year-end filing, confirm the current BIR and agency guidance before relying on the output.
Under the TRAIN Law schedule used here, annual taxable income up to ₱250,000 is exempt from income tax for compensation earners and many self-employed taxpayers. That is the key starting point for most salary estimates.
OSD allows taxpayers to deduct 40% of gross sales/receipts (for self-employed) or gross income (for corporations) instead of itemizing. It simplifies filing and often results in higher deductions.
The 13th month pay and other bonuses are tax-exempt up to ₱90,000 combined. Only amounts exceeding ₱90,000 are added to taxable income.
Employee SSS contribution is 4.5% of monthly salary credit, with maximum contribution of ₱1,350/month (based on maximum salary credit of ₱30,000). Employers contribute additional 9.5%.
Annual income tax returns (BIR Form 1700/1701) are due on April 15 of the following year. Monthly withholding tax is remitted by the 10th of the following month.
Republic Act 10963 reworked the Philippine personal income tax brackets, raised the zero-tax threshold, and changed how many taxpayers estimate withholding and annual tax due. It is the law that defines the bracket structure used by this calculator.