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Withholding Tax Calculator Philippines (2026)

Compute the monthly BIR withholding tax on your employee compensation using the updated TRAIN Law (RA 10963) tax table effective January 1, 2023. Enter your salary and optional government deductions for an accurate result.

Formula last updated:

Formulas are reviewed and updated about every 2 weeks.

Popular withholding tax examples

Open exact monthly tax examples for common Philippine salary levels.

₱20,000 monthly₱25,000 monthly₱30,000 monthly₱40,000 monthly₱50,000 monthly₱75,000 monthly

How monthly withholding works in practice

Philippine payroll teams usually compute withholding using an annualized approach: estimate annual taxable compensation, apply TRAIN brackets, then spread tax across pay periods. This is why your monthly withholding can change mid-year even when your basic pay appears stable.

A salary increase, unpaid leave, bonus timing, or corrected remittance can shift the annual estimate and trigger an adjustment. The goal is for withheld tax and year-end liability to align as closely as possible.

Step-by-step manual check (employee payslip sanity check)

  1. Start from gross monthly compensation for the payroll period.
  2. Subtract statutory employee shares (SSS, PhilHealth, Pag-IBIG) based on active rules.
  3. Estimate annual taxable compensation from monthly taxable income and known adjustments.
  4. Apply the TRAIN graduated bracket to compute annual tax due.
  5. Divide annual tax by the number of payroll periods to estimate withholding per period.
  6. Compare this estimate with your payslip and ask HR about any major differences.

Three common scenarios

Scenario A: Stable monthly salary

With consistent pay and no major bonus, withholding often looks steady month to month. This is the easiest case to verify because the taxable base rarely changes.

Scenario B: Mid-year raise

Once your rate is adjusted, payroll systems may recompute annualized tax for the remaining months. You may notice higher withholding later in the year as the system catches up with the new income level.

Scenario C: Unpaid leave or irregular periods

If annual projected taxable income drops, withholding can be reduced or partially reversed in later payroll periods. Year-end reconciliation then confirms final liability.

Mistakes to avoid when interpreting tax deductions

  • Comparing withholding from two months without accounting for bonuses and annualization.
  • Using gross pay as taxable pay without deducting statutory contributions first.
  • Assuming your bracket rate applies to all income, instead of only the excess per bracket.
  • Ignoring payroll-cycle differences between semi-monthly and monthly withholding presentations.
  • Relying on old tables instead of current BIR guidance and employer-issued Form 2316.

Official references and related tools

Salary calculator (full deductions)Freelancer and self-employed tax calculatorTRAIN Law basics for employees

Formula source & official references

Tax rates follow the graduated table under the Tax Reform for Acceleration and Inclusion (TRAIN) Law — RA 10963, implemented through BIR issuances. Monthly withholding uses annualized taxable income and the TRAIN brackets effective from January 1, 2023. Statutory deductions before tax align with SSS contribution schedules, PhilHealth premium rules, and Pag-IBIG contribution rules.

→ Salary Calculator→ SSS Contribution→ Freelancer & self-employed tax

Withholding Tax FAQs

What is withholding tax on compensation in the Philippines?
Withholding tax on compensation is the income tax withheld by an employer from an employee's salary each month. It is remitted directly to the Bureau of Internal Revenue (BIR) on the employee's behalf, so the employee does not need to file quarterly income tax returns. The annual reconciliation is done via BIR Form 2316.
What are the TRAIN Law income tax brackets in 2023 and beyond?
Under TRAIN Law (effective January 1, 2023): income up to ₱250,000/year is tax-exempt; ₱250,001–₱400,000 is taxed at 15% on excess; ₱400,001–₱800,000 at ₱22,500 + 20% on excess over ₱400,000; ₱800,001–₱2,000,000 at ₱102,500 + 25% on excess; ₱2,000,001–₱8,000,000 at ₱402,500 + 30% on excess; and over ₱8,000,000 at ₱2,202,500 + 35% on excess.
Why do I subtract SSS, PhilHealth, and Pag-IBIG before computing the tax?
Under BIR regulations, mandatory government contributions (SSS, PhilHealth, Pag-IBIG) are deducted from gross compensation to arrive at taxable income. Only the net amount after these deductions is subject to income tax. This is why your withholding tax is computed on your taxable income, not your gross pay.
What is the effective tax rate vs. the marginal tax rate?
The marginal rate is the highest tax bracket your income falls into. The effective rate is the actual percentage of total tax you pay relative to your total taxable income — it is always lower than the marginal rate because only income above each threshold is taxed at that rate, not your whole income.
My employer deducts taxes but I received a refund after filing — why?
Employers use an annualized method to estimate monthly withholding taxes. If your actual annual income is lower than projected (due to absences, unpaid leave, or bonuses lower than expected), you may have over-withheld and receive a refund. Conversely, if you had additional income, you might owe the difference.
Why did my withholding tax increase even though my base pay did not change?
Withholding can increase because of annualization adjustments, bonuses, benefit conversions, or correction runs by payroll. Even without a base salary change, projected annual taxable income may rise, which can move you to a higher bracket for the remaining months.
Is withholding tax the same as my final annual tax liability?
Not always. Withholding is an estimate remitted during the year. Your final annual liability may differ depending on adjustments, multiple employers, non-compensation income, and year-end reconciliation. Form 2316 and related BIR records are the formal reference.
Can I use this tool for freelancers and self-employed income?
This page is designed for compensation income from employment. Self-employed and mixed-income taxpayers may use different tax options (for example, 8% option or graduated rates with allowable deductions) and different filing timelines. Use the freelancer calculator for a better estimate.
How can I verify if my payroll withholding is reasonable?
Recompute taxable pay from your payslip line items, apply current TRAIN brackets, and compare your estimate with payroll output over several months instead of a single cut-off. If differences persist, request the payroll computation sheet and table version from HR.