Are minimum wage earners exempt from income tax in the Philippines?

Yes. Under the TRAIN Law, statutory minimum wage earners are fully exempt from income tax on their basic wage, holiday pay, overtime, night shift differentials, and hazard pay. Their exemption exists independently of the PHP 250,000 zero-rate bracket.

How are 13th month pay and bonuses taxed?

The first PHP 90,000 of 13th month pay and other employee benefits received in a year is tax-exempt. Any amount above PHP 90,000 is added to regular compensation and taxed at the applicable TRAIN Law bracket rates.

Do self-employed Filipinos follow the same tax rates?

Self-employed individuals and professionals may use the same graduated income tax table, or they may opt for an 8% flat tax on gross receipts/sales above PHP 250,000 (in lieu of income tax and percentage tax), provided they do not exceed the VAT threshold of PHP 3 million in annual gross receipts.

Philippines Income Tax Calculator

Calculate Philippine personal income tax under the TRAIN Law (Republic Act 10963) effective from 2023 onwards, with effective rate and take-home pay.

By AbraCalc Editorial Team · Reviewed by AbraCalc Methodology Review · Last reviewed: 2026-06-25

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How to use this tool

Enter annual taxable income in the fields above.
Results update instantly as you type — or click Calculate.
Read your income tax payable and the full breakdown beneath it.

⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.

Formula

TRAIN Law tax brackets (effective 2023 onward):

PHP 0 – 250,000: 0%
PHP 250,001 – 400,000: 15% on excess over PHP 250,000
PHP 400,001 – 800,000: PHP 22,500 + 20% on excess over PHP 400,000
PHP 800,001 – 2,000,000: PHP 102,500 + 25% on excess over PHP 800,000
PHP 2,000,001 – 8,000,000: PHP 402,500 + 30% on excess over PHP 2,000,000
PHP 8,000,001+: PHP 2,202,500 + 35% on excess over PHP 8,000,000

How it works

The Tax Reform for Acceleration and Inclusion (TRAIN) Law restructured Philippine personal income tax rates. The 2023 schedule (the second tranche of TRAIN) reduced rates in the lower brackets. The Bureau of Internal Revenue (BIR) collects this tax, which applies to individuals earning purely compensation income. This calculator uses gross taxable income before any deductions or contributions.

Worked example

Annual Income of PHP 500,000

PHP 500,000 falls in the PHP 400,001–800,000 bracket.
Tax = PHP 22,500 + (500,000 − 400,000) × 20% = PHP 22,500 + PHP 20,000 = PHP 42,500.
Monthly tax = PHP 42,500 / 12 = PHP 3,541.67.
Effective rate = PHP 42,500 / PHP 500,000 × 100 = 8.50%.

Annual Tax: PHP 42,500 | Monthly: PHP 3,541.67 | Effective Rate: 8.50%

Common mistakes to avoid

Applying old TRAIN Law rates from 2018-2022 instead of the revised 2023 onward schedule, which eliminated tax on incomes below PHP 250,000 and reduced rates in upper brackets.
Computing tax on gross income without deducting mandatory contributions (SSS, PhilHealth, Pag-IBIG) first: these are deducted from gross compensation before applying income tax brackets.
Forgetting the annual PHP 90,000 13th month pay and other benefits exclusion: amounts up to PHP 90,000 in bonuses and 13th month pay are tax-exempt; only the excess is included in taxable compensation.

Key terms

What is the TRAIN Law?: Republic Act 10963, or the Tax Reform for Acceleration and Inclusion Act, signed in 2017 and phased in through 2023, overhauling the Philippine personal income tax system.
Are SSS, PhilHealth and Pag-IBIG contributions deductible?: Yes, mandatory contributions to SSS, PhilHealth, and Pag-IBIG reduce taxable income. This calculator uses taxable income after such deductions.
What is the tax exemption threshold?: The first PHP 250,000 of annual compensation income is exempt from income tax under the TRAIN Law.
What is BIR?: The Bureau of Internal Revenue is the Philippine government agency responsible for collecting national internal revenue taxes.

Frequently asked questions

Are minimum wage earners exempt from income tax in the Philippines?: Yes. Under the TRAIN Law, statutory minimum wage earners are fully exempt from income tax on their basic wage, holiday pay, overtime, night shift differentials, and hazard pay. Their exemption exists independently of the PHP 250,000 zero-rate bracket.
How are 13th month pay and bonuses taxed?: The first PHP 90,000 of 13th month pay and other employee benefits received in a year is tax-exempt. Any amount above PHP 90,000 is added to regular compensation and taxed at the applicable TRAIN Law bracket rates.
Do self-employed Filipinos follow the same tax rates?: Self-employed individuals and professionals may use the same graduated income tax table, or they may opt for an 8% flat tax on gross receipts/sales above PHP 250,000 (in lieu of income tax and percentage tax), provided they do not exceed the VAT threshold of PHP 3 million in annual gross receipts.