Philippines Income Tax Rates & Brackets
Tax System Overview
System: Progressive (graduated)
Authority: Bureau of Internal Revenue (BIR)
Law: Tax Reform for Acceleration and Inclusion (TRAIN) Act
The Philippines tax year is the calendar year. The TRAIN law (effective 2018, updated 2023) reformed tax brackets with a higher tax-free threshold of ₱250,000. The 13th month pay and bonuses up to ₱90,000 are tax-exempt.
Key Deductions & Allowances
Tax-free threshold of ₱250,000/year. 13th month pay and bonuses up to ₱90,000 exempt. SSS, PhilHealth, and Pag-IBIG contributions are pre-tax. No other major personal deductions for employees under TRAIN law.
Philippines Income Tax Brackets
2025 calendar year (TRAIN law rates, effective since 2023) tax year rates for Philippines. Progressive (graduated) system.
| Income Range | Tax Rate |
|---|---|
| ₱0 – ₱250,000 | 0% (Exempt) |
| ₱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 |
Additional Taxes & Contributions
Beyond income tax, Philippines workers may pay these additional charges.
| Tax / Contribution | Rate | Notes |
|---|---|---|
| SSS (Social Security) | 4.5% | Employee share; employer contributes 9.5% |
| PhilHealth | 2.25% | Employee share; employer matches |
| Pag-IBIG (HDMF) | ₱100–₱200/month | Employee share; employer matches up to ₱200 |
Effective Tax Rates by Income
Estimated federal/national income tax only. Shows how effective rates differ from marginal rates.
| Annual Income | Est. Tax | Effective Rate |
|---|---|---|
| ₱300,000 | ₱7,500 | 2.5% |
| ₱500,000 | ₱42,500 | 8.5% |
| ₱800,000 | ₱102,500 | 12.8% |
| ₱1,200,000 | ₱202,500 | 16.9% |
| ₱2,000,000 | ₱402,500 | 20.1% |
Estimates based on standard deductions/allowances. Actual tax depends on personal circumstances, filing status, and applicable credits.
Jurisdiction, Tax Year & Data Sources
| Jurisdiction | Philippines |
| Tax year shown | 2025 calendar year (TRAIN law rates, effective since 2023) |
| Default taxpayer type | Resident employee (compensation income) |
| Included in estimates | Income tax only |
| Not included | SSS, PhilHealth, Pag-IBIG contributions |
| Official source | Bureau of Internal Revenue – Income Tax |
| Last reviewed | 2026-06 |
About Philippines's Tax System
The Philippines uses a graduated income tax system reformed by the TRAIN law. The first ₱250,000 of annual income is completely tax-free, benefiting the majority of Filipino workers.
13th month pay is mandatory in the Philippines – all employers must pay a 13th month equivalent by December 24th each year. Along with other bonuses, up to ₱90,000 is tax-exempt.
Filipino employees contribute to three mandatory funds: SSS (Social Security System) for retirement and benefits, PhilHealth for health insurance, and Pag-IBIG (HDMF) for housing and savings loans.
Self-employed individuals can opt for an 8% flat tax on gross income over ₱250,000 as an alternative to the graduated rates.
Tax Brackets by Country
Compare income tax systems across different countries.
United States
Canada
United Kingdom
Australia
New Zealand
Germany
India
Ireland
Singapore
South Africa
JapanFrequently Asked Questions
0% (up to ₱250,000), 15% (₱250,001–₱400,000), 20% (₱400,001–₱800,000), 25% (₱800,001–₱2M), 30% (₱2M–₱8M), and 35% (above ₱8M).
The 13th month pay itself is tax-exempt up to ₱90,000 (combined with other bonuses). Any amount exceeding ₱90,000 is subject to income tax.
The Social Security System (SSS) is a mandatory social insurance program. Employees contribute 4.5% of monthly salary (employer contributes 9.5%). It covers retirement, sickness, maternity, and disability.
Self-employed individuals and professionals can opt for an 8% flat tax on gross income exceeding ₱250,000, instead of using the graduated tax table.