Breakdown
How it works
Mandatory contributions come off first: SSS 5% employee share (monthly salary credit capped at ₱35,000), PhilHealth 2.5% (capped at ₱100,000 salary), Pag-IBIG 2% (capped at ₱10,000 salary → ₱200). Income tax is then applied to annual taxable pay: 0% to ₱250,000; 15% to ₱400,000; 20% to ₱800,000; 25% to ₱2m; 30% to ₱8m; 35% above.
Formula
Worked example
₱35,000 a month: SSS 1,750, PhilHealth 875, Pag-IBIG 200 → taxable ₱386,100 a year → tax ₱20,415 (₱1,701 a month) → take-home ≈ ₱30,474.
Frequently asked questions
Is 13th-month pay taxed?
Exempt up to ₱90,000 a year together with other bonuses; the excess is taxed.
Do OFWs pay Philippine income tax?
No — income earned abroad by registered OFWs is exempt. Contributions to SSS, PhilHealth and Pag-IBIG are voluntary but recommended for benefits and the housing loan.
What is the minimum wage?
Set per region — about ₱645 a day in Metro Manila (2025). Minimum wage earners are exempt from income tax.