Which taxpayer are you?
The BIR sorts individuals into a few types, and each is taxed a little differently.
Salary taxed through the graduated table after mandatory contributions. Your employer withholds and files for you. Minimum wage earners pay nothing at all.
graduatedFreelancers, professionals, and business owners choose between 8 percent on gross above ₱250,000 or the graduated table on profit plus 3 percent percentage tax.
8% or graduatedSalary follows the employed rules; the side income follows the self-employed rules, except the 8 percent option applies to the full business gross.
both at onceOverseas salary is exempt with a valid OEC. Only income earned inside the Philippines is taxed, using the self-employed rules.
PH income onlyHow your tax is figured
bracket by bracketHow you are taxed depends on how you earn. A compensation earner has only a salary; a self-employed person earns from a business, profession, or freelancing; a mixed income earner has both; and an OFW with a valid OEC is taxed only on income from within the Philippines. For employed and purely self-employed individuals, the first ₱250,000 of annual taxable income is exempt, which is roughly ₱20,833 a month, and minimum wage earners pay nothing at all.
Above the exempt amount, the graduated TRAIN table takes over. Income from ₱250,000 to ₱400,000 is taxed at 15 percent of the excess, and from ₱400,000 to ₱800,000 the tax is ₱22,500 plus 20 percent of the amount over ₱400,000. So a taxable income of ₱500,000 owes ₱22,500 plus 20 percent of ₱100,000, which is ₱42,500 for the year. The brackets keep climbing, reaching 35 percent on income above ₱8 million.
Self-employed individuals earning ₱3 million or less have a second path: a flat 8 percent on gross receipts above ₱250,000, in place of the graduated table and the 3 percent percentage tax. It is often cheaper when expenses are small, and this calculator computes both and flags the lower one. Mixed earners file BIR Form 1701 to bring salary and side income together. To see the deductions behind a salary, the take-home pay calculator helps, and the freelancer tax calculator focuses on self-employed filing.
Questions people ask
answered in plain wordsIf your only income is a salary from an employer, you are a compensation earner. If you earn from freelancing, a business, or a profession, you are self-employed. If you have both a job and a side income, you are a mixed income earner. If you work abroad with a valid Overseas Employment Certificate, you are an OFW and taxed only on income from within the Philippines.
For employed and purely self-employed individuals, the first ₱250,000 of annual taxable income carries no tax, roughly ₱20,833 per month. Minimum wage earners are fully exempt, including on their overtime, night differential, holiday, and hazard pay.
For 2023 onward: up to ₱250,000 is exempt; ₱250,000 to ₱400,000 is taxed at 15 percent of the excess; ₱400,000 to ₱800,000 at ₱22,500 plus 20 percent; ₱800,000 to ₱2 million at ₱102,500 plus 25 percent; ₱2 million to ₱8 million at ₱402,500 plus 30 percent; and above ₱8 million at ₱2,202,500 plus 35 percent.
Instead of the graduated table plus the 3 percent percentage tax, self-employed individuals earning ₱3 million or less may pay a flat 8 percent on gross receipts above ₱250,000. It is simpler and usually cheaper when your expenses are small. This calculator computes both and points out the cheaper one.
Your salary is taxed through the graduated table as usual. Your business income is taxed separately: either at 8 percent of its full gross (the ₱250,000 reduction no longer applies, since it is already inside your salary's tax table) or through the graduated table on your combined income plus 3 percent percentage tax. You file BIR Form 1701 to put it all together.
Not on their overseas salary. Income from overseas employment is exempt for OFWs registered with a valid OEC. Income from within the Philippines, such as a business, freelancing, or rentals, is still taxable under the regular self-employed rules, and bank interest or dividends are final-taxed at source.
Close, but not always identical. Employers withhold using the BIR monthly table, then reconcile at year end through annualization. Small differences during the year are usually settled in your December pay.
No. Every calculation runs privately on your device. Nothing you type is stored, tracked, or sent to a server.
Where these numbers come from
straight from the sourceThe rates and rules on this page follow the official issuances below. When an agency updates a schedule, this is where to confirm the current figure against your own situation.