TRAIN Law (RA 10963) Tax Brackets — Effective 2023 Onward
The Tax Reform for Acceleration and Inclusion (TRAIN) Law took effect January 2018. The 2023+ brackets (the current and 2026-applicable schedule) are shown below.
Taxable Income Formula: Annual Taxable Income = (Monthly Gross Salary − Mandatory Deductions) × 12. Mandatory deductions include employee shares of PhilHealth, SSS, and Pag-IBIG.
| Annual Taxable Income | Tax Formula | Monthly Gross (approx.) |
|---|---|---|
| ₱0 – ₱250,000 | ₱0 — Tax Exempt | Up to ~₱20,833 |
| ₱250,001 – ₱400,000 | 15% of excess over ₱250,000 | ~₱20,833 – ₱33,333 |
| ₱400,001 – ₱800,000 | ₱22,500 + 20% of excess over ₱400,000 | ~₱33,333 – ₱66,667 |
| ₱800,001 – ₱2,000,000 | ₱102,500 + 25% of excess over ₱800,000 | ~₱66,667 – ₱166,667 |
| ₱2,000,001 – ₱8,000,000 | ₱402,500 + 30% of excess over ₱2,000,000 | ~₱166,667 – ₱666,667 |
| Over ₱8,000,000 | ₱2,202,500 + 35% of excess over ₱8,000,000 | Above ₱666,667 |
How Withholding Tax is Computed
Your employer computes annual tax from your taxable salary, then divides by 12 to get the monthly withholding amount. The monthly withholding tax is what appears as "BIR" or "Tax" on your payslip.
What Reduces Your Taxable Income
- SSS employee contribution — deducted from gross before computing tax
- PhilHealth employee premium — deducted from gross
- Pag-IBIG mandatory contribution — deducted from gross
- 13th month pay up to ₱90,000 — fully exempt from income tax
- De minimis benefits — rice allowance (₱2,000/month), clothing allowance (₱6,000/year), etc.
Zero-tax threshold: An employee earning approximately ₱20,833/month gross will likely have zero withholding tax after mandatory deductions lower the annual taxable income below ₱250,000.
Self-employed & mixed income earners file their own annual ITR (BIR Form 1701) and may choose between the 8% flat tax on gross sales/receipts (over ₱250,000 threshold) or graduated TRAIN rates with itemized/OSD deductions.
Estimate Your Monthly Withholding Tax
Our calculator uses the TRAIN 2023+ brackets and automatically deducts mandatory contributions to compute your accurate tax estimate.
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