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How withholding tax is computed in 2026
Three steps, straight from the BIR's revised withholding tax table.
Get taxable income
Subtract your SSS, PhilHealth, and Pag-IBIG employee shares from gross pay. Non-taxable allowances also come out here.
Find the bracket
Match the taxable income to a row of the monthly table below. ₱20,833 and below owes nothing.
Base + rate over excess
The tax is the bracket's fixed base plus the bracket rate applied only to the amount above the bracket threshold — graduated, not flat.
BIR Withholding Tax Table 2026 (Monthly)
The TRAIN law schedule effective January 1, 2023 onwards — unchanged for 2026.
| Taxable income | Base tax | Rate on excess |
|---|---|---|
| ₱20,833 and below | 0.00 | 0% |
| ₱20,833 – ₱33,332 | 0.00 | 15% over ₱20,833 |
| ₱33,333 – ₱66,666 | 1,875.00 | 20% over ₱33,333 |
| ₱66,667 – ₱166,666 | 8,541.80 | 25% over ₱66,667 |
| ₱166,667 – ₱666,666 | 33,541.80 | 30% over ₱166,667 |
| ₱666,667 and above | 183,541.80 | 35% over ₱666,667 |
| Annual taxable income | Base tax | Rate on excess |
|---|---|---|
| ₱250,000 and below | 0.00 | 0% |
| ₱250,000 – ₱400,000 | 0.00 | 15% over ₱250,000 |
| ₱400,000 – ₱800,000 | 22,500.00 | 20% over ₱400,000 |
| ₱800,000 – ₱2,000,000 | 102,500.00 | 25% over ₱800,000 |
| ₱2,000,000 – ₱8,000,000 | 402,500.00 | 30% over ₱2,000,000 |
| Above ₱8,000,000 | 2,202,500.00 | 35% over ₱8,000,000 |
Legal basis: RA 10963 (TRAIN law), Section 24(A)(2)(a) of the Tax Code. Employers reconcile the year's withholding against actual liability each December — over-withheld amounts are refunded in the final payroll.
Worked example: a ₱25,000 salary in 2026
The exact arithmetic behind the calculator, step by step — the way payroll actually does it.
Subtract the mandatory contributions
From the ₱25,000 gross, take out the employee shares: SSS ₱1,250.00 (5% of the ₱25,000 MSC), PhilHealth ₱625.00 (2.5%), and Pag-IBIG ₱200.00. Total contributions: ₱2,075.00.
Get the taxable income
₱25,000 − ₱2,075.00 = ₱22,925.00. This is what tax is computed on — not the gross.
Apply the TRAIN bracket
₱22,925.00 sits in the 15% bracket (over ₱20,833). Tax = (₱22,925.00 − ₱20,833) × 15% = ₱2,092 × 15% = ₱313.80.
Net take-home pay
₱25,000 − ₱2,075.00 − ₱313.80 = ₱22,611.20. That's what lands in the payroll account each month.
Frequently asked questions
Straight answers to the questions people actually search for.
How much monthly salary is tax-free in the Philippines?
Monthly taxable income of ₱20,833 or below has zero withholding tax — equivalent to the ₱250,000 annual exemption under the TRAIN law. Note this applies to income after SSS, PhilHealth, and Pag-IBIG contributions, so gross salaries somewhat above ₱20,833 can still owe nothing. Minimum wage earners are fully exempt regardless of overtime or night differential.
Did the BIR tax table change for 2026?
No. The schedule in effect since January 1, 2023 — the TRAIN law's second and final phase — continues unchanged through 2026. There is no scheduled third phase; any change would require new legislation.
Are SSS, PhilHealth, and Pag-IBIG deducted before tax?
Yes. Mandatory contributions are subtracted from gross pay first, and withholding tax is computed only on what remains. This calculator does that automatically.
Why is my actual tax lower than my bracket rate?
Because the tax is graduated — the bracket rate applies only to income above the bracket threshold, not to your whole salary. A ₱30,000 earner sits in the 15% bracket but pays about ₱1,008, not 15% of everything — an effective rate near 3.7%.
Is 13th month pay subject to withholding tax?
Only the portion above ₱90,000, combined with other bonuses and benefits for the year. Within ₱90,000, it is completely tax-exempt.
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