Income Tax Calculator (Philippines 2026)
Work out your annual income tax under the TRAIN law. Employees are taxed on the graduated brackets; freelancers and the self-employed can compare them with the optional 8% flat tax.
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Want the tax deducted from each payday instead?
Use the Withholding Tax CalculatorHow income tax works under the TRAIN law
The Philippines uses a graduated income tax: the more you earn, the higher the rate on the top slice of your income. The first ₱250,000 of annual taxable income is completely tax-free. Above that, your tax is a fixed amount for your bracket plus a percentage of the excess.
For employees, taxable income is your annual compensation minus your mandatory contributions (SSS, PhilHealth, Pag-IBIG), which are tax-exempt. Your 13th month pay and other benefits are also exempt up to ₱90,000.
The 8% option for freelancers and the self-employed
If you are self-employed or a professional and your gross sales/receipts for the year do not exceed ₱3,000,000, you can choose a flat 8% tax on your gross income above ₱250,000 — instead of the graduated rates and the 3% percentage tax. For many freelancers this is both simpler and cheaper. The calculator above compares both and highlights the lower one.
Two things to remember: the 8% option is elected in your first quarterly return (or on registration) and then applies for the whole year, and it does not let you deduct business expenses, so it favors freelancers with low costs. If you also have a salary, the ₱250,000 deduction is not available on the 8% base because your compensation income already uses it.
Annual income tax table 2026 (TRAIN)
These are the graduated brackets applied to your annual taxable income.
| Annual taxable income | Tax | Plus |
|---|---|---|
| ₱0 – ₱250,000 | ₱0 | Exempt (0%) |
| ₱250,000 – ₱400,000 | ₱0 | 15% of excess over ₱250,000 |
| ₱400,000 – ₱800,000 | ₱22,500 | 20% of excess over ₱400,000 |
| ₱800,000 – ₱2,000,000 | ₱102,500 | 25% of excess over ₱800,000 |
| ₱2,000,000 – ₱8,000,000 | ₱402,500 | 30% of excess over ₱2,000,000 |
| Over ₱8,000,000 | ₱2,202,500 | 35% of excess over ₱8,000,000 |
Source: Bureau of Internal Revenue (BIR) — TRAIN Law (RA 10963) graduated income tax schedule, Phase 2 effective 1 January 2023 onward, unchanged for 2026.. Last updated: 2026-10-17.
1 Worked example: employee on ₱30,000/month
An employee earning ₱30,000/month (₱360,000/year) who paid ₱29,400 in SSS, PhilHealth and Pag-IBIG over the year.
| Bracket applied | Rate | Tax |
|---|---|---|
| First ₱250,000 | 0% | ₱0 |
| Excess of ₱80,600 (₱250,001–₱330,600) | 15% | ₱12,090 |
Annual tax
₱12,090
Effective rate
3.36%
Per month
₱1,007.50
As an employee you don't file or pay this yourself. Your employer deducts about ₱1,007.55 each month as withholding tax (the BIR table rounds slightly differently from annual ÷ 12) and remits it to the BIR.
2 Worked example: freelancer earning ₱600,000 — 8% vs graduated
A self-employed professional with ₱600,000 in gross receipts and minimal deductible expenses. This is the decision the 8% option exists for.
Graduated rates
8% flat tax ✓ cheaper
Income tax at common income levels (2026)
Annual income tax on your taxable income (gross minus tax-exempt contributions) under the graduated TRAIN rates. The complete set of tables, including the withholding tables per payroll period, is on the Tax Table 2026 page.
| Annual taxable income | Income tax | Effective rate |
|---|---|---|
| ₱250,000 or less | ₱0 | 0% |
| ₱500,000 | ₱42,500 | 8.5% |
| ₱1,000,000 | ₱152,500 | 15.3% |
| ₱2,000,000 | ₱402,500 | 20.1% |
Do I even need to file an income tax return?
If you're a regular employee with one employer all year, usually no. Your employer withholds the right tax each payday and issues BIR Form 2316; under substituted filing that replaces your own return, as long as your tax was correctly withheld and you had only one employer.
You DO need to file if you had two or more employers during the year, are self-employed or a freelancer, run a business, or earn mixed income (job + sideline), or if your tax was not withheld correctly. Freelancers file quarterly (Form 1701Q) and annually (Form 1701 or 1701A). The regular annual deadline is April 15. See who files which ITR and how.
Earning ₱250,000 a year or less? You owe zero income tax either way, because the first ₱250,000 of taxable income is exempt. But the self-employed must still register and file, even with ₱0 due.
Frequently Asked Questions
How is income tax computed in the Philippines?
What is the 8% income tax option?
How much is the income tax on a ₱30,000 monthly salary in 2026?
How is the 13th month pay treated in the income tax computation?
Does the 8% option apply if I also have a job?
Is income tax the same as withholding tax?
Related guides
- Tax Table 2026 Philippines: BIR Income Tax and Withholding Tax Tables
- Income Tax in the Philippines 2026: A Complete Guide
- How to Compute Income Tax in the Philippines (2026, Step by Step)
- Income Tax Return (ITR) Philippines 2026: Who Files, Which Form and When
- BIR Form 2316 Explained: What It Is, Who Issues It and How to Read It
- De Minimis Benefits Philippines 2026: The Updated Tax-Exempt List
- Tax Refund in the Philippines 2026: Why You Get One and How
- Is 13th Month Pay Taxable in the Philippines? (2026)