Philippines Income Tax Calculator (TRAIN Law)
Enter your salary to calculate your Philippine income tax under the TRAIN Law (Republic Act 10963, brackets effective January 1, 2023), plus your mandatory contributions to SSS, PhilHealth (PhilHealth), and Pag-IBIG (HDMF). Choose your pay frequency and employment type. The calculator shows your taxable income, withholding tax, net take-home pay, and a full breakdown of every deduction.
How Philippine income tax works under the TRAIN Law
The Tax Reform for Acceleration and Inclusion Act (TRAIN Law, Republic Act 10963) overhauled the Philippine personal income tax system in two phases. The second set of rates, effective January 1, 2023, is the one used today. The key change for most workers is that income up to PHP 250,000 per year is completely exempt from tax. Above that threshold, a six-bracket progressive schedule applies, rising from 15% on income between PHP 250,001 and PHP 400,000 to a top rate of 35% on income above PHP 8,000,000. For employed workers, the Bureau of Internal Revenue (BIR) requires employers to compute and withhold the tax every pay period using the annualized method: multiply your period taxable income by the number of pay periods in the year, apply the annual bracket, then divide the resulting tax back into a per-period amount. This calculator replicates that annualized method exactly so your results match what appears on your payslip.
Mandatory contributions: SSS, PhilHealth, and Pag-IBIG
Before your income tax is computed, three mandatory government contributions are deducted from your gross pay. These are non-taxable and reduce your taxable income: - SSS (Social Security System): The contribution rate is 15% of your Monthly Salary Credit (MSC). Employees pay 5% and employers contribute 10%. The MSC is capped at PHP 35,000 (minimum PHP 5,000) as of 2025, so the maximum employee contribution is PHP 1,750 per month. Contributions above an MSC of PHP 20,000 go into the MySSS Pension Booster (Mandatory Provident Fund). - PhilHealth: The premium rate is 5% of your monthly basic salary, split equally between you and your employer (2.5% each). The monthly basic salary is floored at PHP 10,000 and capped at PHP 100,000, giving a maximum monthly employee premium of PHP 2,500. - Pag-IBIG (HDMF): The employee contribution is 1% of monthly compensation if your pay is PHP 1,500 or below, or 2% if above. The maximum monthly compensation considered is PHP 5,000, so the maximum employee contribution is PHP 100 per month.
How to use this calculator
Select your pay frequency (monthly, semi-monthly, bi-weekly, weekly, or annual) and enter your gross salary for that period. The calculator converts your salary to a monthly equivalent to compute your SSS, PhilHealth, and Pag-IBIG contributions, deducts them from your gross pay to arrive at your taxable income, annualizes that taxable income, applies the TRAIN Law bracket schedule, divides the resulting tax by 12 to get your monthly income tax, and then subtracts both the tax and contributions from your gross pay to give you your monthly take-home. You can toggle each contribution on or off and add other pre-tax deductions to model your actual payslip. All results are shown both monthly and annually.
Taxable income vs. gross salary: what gets deducted first
Your gross salary is not what the BIR taxes directly. The computation works in this order: (1) start with your gross compensation income; (2) subtract your mandatory SSS, PhilHealth, and Pag-IBIG employee contributions (these are exempt from income tax under the National Internal Revenue Code); (3) the result is your taxable compensation income; (4) apply the TRAIN Law brackets to that figure. Any government-mandated 13th-month pay and other benefits up to PHP 90,000 are also excluded, but this calculator focuses on regular monthly compensation. Because contributions come off first, even a mid-range salary can fall in a lower bracket than its raw number suggests.
TRAIN Law Annual Income Tax Brackets (effective January 1, 2023)
| Annual taxable income | Base tax | Rate on excess | Marginal rate |
|---|---|---|---|
| PHP 0 - 250,000 | PHP 0 | 0% | 0% |
| PHP 250,001 - 400,000 | PHP 0 | 15% of excess over PHP 250,000 | 15% |
| PHP 400,001 - 800,000 | PHP 22,500 | 20% of excess over PHP 400,000 | 20% |
| PHP 800,001 - 2,000,000 | PHP 102,500 | 25% of excess over PHP 800,000 | 25% |
| PHP 2,000,001 - 8,000,000 | PHP 402,500 | 30% of excess over PHP 2,000,000 | 30% |
| Over PHP 8,000,000 | PHP 2,202,500 | 35% of excess over PHP 8,000,000 | 35% |
These brackets apply to compensation income of employed individuals and self-employed individuals filing Schedule 1 under the TRAIN Law (RA 10963).
Frequently asked questions
Who is exempt from income tax in the Philippines?
Under the TRAIN Law, any individual whose annual taxable income (gross compensation minus mandatory contributions) does not exceed PHP 250,000 pays zero income tax. This exempts the majority of minimum-wage earners and low-income workers. Minimum-wage earners in the private sector are additionally exempt from income tax on their statutory minimum wage, holiday pay, overtime pay, night shift differential, and hazard pay.
What is the difference between marginal rate and effective tax rate?
The marginal rate is the rate applied to your last peso of taxable income, the top bracket you reach. For example, if your taxable income is PHP 500,000 per year, your marginal rate is 20%, but you only pay 20% on the PHP 100,000 between PHP 400,000 and PHP 500,000. The effective rate is total tax divided by total gross income. Because the lower brackets are taxed at lower rates and the first PHP 250,000 is exempt, the effective rate is always lower than the marginal rate.
When did the current TRAIN Law tax brackets take effect?
The TRAIN Law was signed on December 19, 2017 and introduced a first schedule of rates from 2018 to 2022, and a second, more favorable schedule from January 1, 2023 onward. The brackets in this calculator are the 2023-and-beyond schedule, which is currently in effect and has no scheduled change.
Are SSS, PhilHealth, and Pag-IBIG contributions deducted before or after income tax?
Before. All three mandatory government contributions are deducted from your gross salary first. The remaining amount is your taxable income, and the TRAIN Law brackets are applied only to that reduced figure. This means your contributions effectively lower your income tax, which is one reason why the government mandates them.
How is the SSS contribution computed for employees in 2025?
The SSS contribution rate is 15% of the Monthly Salary Credit (MSC). Employees pay 5% and employers pay 10%. The MSC is the nearest lower salary bracket from the official SSS table; it is floored at PHP 5,000 and capped at PHP 35,000 as of 2025. This means the minimum employee contribution is PHP 250 per month and the maximum is PHP 1,750. Contributions on the portion of the MSC above PHP 20,000 go into the MySSS Pension Booster mandatory provident fund.
Does the 13th month pay affect my income tax?
The 13th-month pay and other bonuses are exempt from income tax up to a combined total of PHP 90,000 per year under the TRAIN Law. Amounts above PHP 90,000 are included in your taxable compensation income. This calculator computes tax on regular monthly salary only and does not add the 13th month automatically, so if your bonus exceeds the threshold you should factor in that excess separately.
How does income tax differ for self-employed individuals?
Self-employed individuals and professionals have two options under the TRAIN Law. They can use the Optional Standard Deduction (OSD) of 40% of gross receipts/revenues, or they can itemize actual allowable deductions. The resulting net income is then subject to the same six-bracket schedule used for compensation income, or they can elect an 8% flat tax on gross sales/receipts above PHP 250,000 instead of the graduated rates plus percentage tax, if their gross annual sales do not exceed PHP 3,000,000. This calculator uses the graduated brackets, which apply to both employed and self-employed earners.