Philippines Income Tax Calculator 2026 — TRAIN Law
Calculate Philippine income tax under TRAIN Law 2026. Includes SSS, PhilHealth, Pag-IBIG deductions, 13th month pay exemption, and employed vs self-employed comparison.
₱
Total gross compensation for the year ₱
Employee share, max ₱1,350/month (2026) ₱
5% of salary, max ₱5,000/month ₱
₱200/month for salary above ₱5,000 ₱
First ₱90,000 is tax-exempt Examples:
₱0
Annual Income Tax
₱0
SSS + PhilHealth + Pag-IBIG
0%
Effective Tax Rate
₱0
Annual Net Take-Home
Tax Calculation Breakdown
| Item | Amount |
|---|
Philippine Income Tax Guide (TRAIN Law)
The Tax Reform for Acceleration and Inclusion (TRAIN) Law significantly reduced income tax for most Filipinos. Workers earning ₱250,000 or less annually pay zero income tax — a major relief for low and middle-income earners.
TRAIN Law Tax Brackets (2023+)
₱0 – ₱250,000: 0%
₱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
₱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
Example
₱600,000 annual salary, employed:
SSS: ₱1,350 × 12 = ₱16,200 | PhilHealth: ₱2,500 × 12 = ₱30,000 | Pag-IBIG: ₱200 × 12 = ₱2,400
Taxable income = ₱600,000 − ₱16,200 − ₱30,000 − ₱2,400 = ₱551,400
Tax = ₱22,500 + 20% × (₱551,400 − ₱400,000) = ₱22,500 + ₱30,280 = ₱52,780
Effective rate: ₱52,780 / ₱600,000 = 8.8%
SSS: ₱1,350 × 12 = ₱16,200 | PhilHealth: ₱2,500 × 12 = ₱30,000 | Pag-IBIG: ₱200 × 12 = ₱2,400
Taxable income = ₱600,000 − ₱16,200 − ₱30,000 − ₱2,400 = ₱551,400
Tax = ₱22,500 + 20% × (₱551,400 − ₱400,000) = ₱22,500 + ₱30,280 = ₱52,780
Effective rate: ₱52,780 / ₱600,000 = 8.8%
Extended
Employed vs Self-Employed Comparison
Compare your tax burden as an employee versus a self-employed professional at the same income
Employed vs Self-Employed Comparison
Compares the tax burden for the same income as an employee vs a self-employed professional (using 40% OSD or 8% flat option).
| Tax Component | Employed | Self-Employed (OSD) | Self-Employed (8% flat) |
|---|
Frequently Asked Questions
What are the Philippine income tax brackets under the TRAIN Law?
Under the TRAIN Law (effective 2023+), the Philippines uses these brackets: ₱0–₱250,000: 0%, ₱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.
What mandatory deductions reduce taxable income in the Philippines?
For employed workers, three mandatory contributions reduce taxable income: SSS (Social Security System) — employee contributes up to ₱1,350/month in 2026; PhilHealth — 5% of monthly basic salary with a maximum of ₱5,000/month; and Pag-IBIG (HDMF) — ₱200/month for salaries above ₱5,000. These contributions are deducted from gross income before computing income tax. Also, the first ₱90,000 of 13th month pay and other benefits are tax-exempt.
Is 13th month pay taxable in the Philippines?
The first ₱90,000 of 13th month pay and other bonuses (Christmas bonus, productivity incentives, etc.) is exempt from income tax. Any amount above ₱90,000 is included in gross income and taxed at regular rates. Since most employees receive exactly one month's salary as 13th month pay, many workers with salaries below ₱90,000/month receive their entire 13th month pay tax-free.
How is self-employed income taxed differently in the Philippines?
Self-employed individuals and professionals have two options: (1) Graduated income tax (same TRAIN Law brackets as employees, minus mandatory contributions) with the option to claim actual expenses or the 40% Optional Standard Deduction (OSD) of gross income; or (2) 8% flat income tax on gross receipts/revenue exceeding ₱250,000, in lieu of income tax and percentage tax. The 8% option is simpler but may be more expensive for those with high expenses.
What is the difference between employed and self-employed tax treatment in the Philippines?
Employed individuals pay income tax on net compensation income (gross salary minus mandatory contributions like SSS, PhilHealth, Pag-IBIG). Their employer withholds taxes via the BIR's substituted filing system. Self-employed individuals must file quarterly and annual returns, can deduct business expenses, and must pay both income tax and percentage tax (3% on gross receipts under 3% rate, or VAT if receipts exceed ₱3 million/year).