Taxes can be one of the most confusing parts of managing your salary in the Philippines. Every year, the Bureau of Internal Revenue (BIR) updates tax tables, exemptions, and rules. Whether you’re a full-time employee, freelancer, or self-employed professional, you need to know how much income tax you owe — and that’s where the BIR Income Tax Calculator Philippines (Updated 2025) comes in.
This calculator uses the latest TRAIN Law rates to help you determine your net salary after tax and government deductions such as SSS, PhilHealth, and Pag-IBIG.
💡 Why You Need an Updated BIR Income Tax Calculator
With new tax brackets and exemptions introduced under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, your take-home pay may change each year.
Here’s why you should always use the latest calculator:
- ✅ Updated tax brackets affect your monthly withholding tax
- ✅ Includes new contribution limits for SSS, PhilHealth, and Pag-IBIG
- ✅ Helps freelancers and employees estimate correct withholding tax
- ✅ Avoids overpayment or underpayment during tax filing season
📊 2025 BIR Income Tax Table (TRAIN Law)
| Annual Taxable Income | Income Tax Rate |
|---|---|
| ₱0 – ₱250,000 | 0% |
| ₱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 |
| Over ₱8,000,000 | ₱2,202,500 + 35% of excess over ₱8,000,000 |
These are the latest BIR tax brackets effective January 2025.
🧮 How to Use the BIR Income Tax Calculator Philippines 2025
The calculator works by taking your gross monthly income, subtracting SSS, PhilHealth, and Pag-IBIG contributions, and applying the corresponding BIR tax rate based on your annual income.
Steps:
- Enter your monthly gross salary (e.g., ₱40,000).
- Select your employment type (employee, freelancer, or self-employed).
- The calculator automatically deducts:
- SSS, PhilHealth & Pag-IBIG contributions
- BIR withholding tax
- Get your net salary instantly.
You can also combine it with the Net Salary Calculator Philippines 2025 to see your complete salary breakdown.
🧾 Example Computation (2025)
Let’s assume you earn ₱40,000 per month.
Step 1 – Compute Yearly Income:
₱40,000 × 12 = ₱480,000
Step 2 – Subtract Contributions:
SSS, PhilHealth, Pag-IBIG = ₱7,800/month × 12 = ₱93,600
₱480,000 – ₱93,600 = ₱386,400 (Taxable Income)
Step 3 – Apply Tax Table:
₱386,400 falls under the ₱250,001 – ₱400,000 bracket.
Tax = 15% of (₱386,400 – ₱250,000) = ₱20,000 approx.
Step 4 – Compute Net Salary:
₱480,000 – ₱20,000 (Tax) – ₱93,600 (Contributions) = ₱366,400 annual take-home pay.
That’s around ₱30,533 per month.
💰 Taxable vs. Non-Taxable Income
Not all income is taxable. The BIR excludes certain payments and benefits:
| Income Type | Taxable? |
|---|---|
| Basic Salary | ✅ Yes |
| 13th Month Pay (up to ₱90,000) | ❌ No |
| Overtime, Night Differential | ✅ Yes |
| De Minimis Benefits (Rice, Uniform, etc.) | ❌ No |
| Pag-IBIG Loan Proceeds | ❌ No |
| MP2 Dividends | ✅ Yes (if investment exceeds limit) |
If you want to compute your year-end bonus, use the 13th Month Pay Calculator Philippines alongside your income tax computation.
⚖️ Freelancer and Self-Employed Tax Computation
Freelancers and small business owners must file their own tax returns quarterly.
Here’s a simplified breakdown:
- Compute Gross Income (total from clients or sales).
- Deduct Allowable Expenses (e.g., internet, laptop, utilities).
- Apply 8% flat tax (for non-VAT income under ₱3M/year) or use graduated rates.
The Freelancer Tax Calculator Philippines can help you estimate your quarterly payments accurately.
🏦 How to Pay Your Taxes
You can pay your income tax through:
- BIR eFPS or eBIRForms (for electronic filing)
- GCash, Maya, or Landbank LinkBiz
- Authorized banks and payment centers
Make sure to always use your TIN (Tax Identification Number) and Form 1701 or 2316 depending on your status.
📈 Tips to Legally Reduce Tax Burden
Contribute consistently to SSS, PhilHealth, and Pag-IBIG — these reduce your taxable income.
Invest in Pag-IBIG MP2 for tax-free dividends.
Track all deductible business expenses if self-employed.
Claim allowable personal exemptions and dependent deductions.📈 Tips to Legally Reduce Tax Burden
🔗 Related Calculators You Should Try
For a complete salary overview, try these related tools:
- Net Salary Calculator Philippines 2025 – Find your take-home pay after all deductions.
- SSS, PhilHealth & Pag-IBIG Contribution Calculator – Check your government contributions.
- Pag-IBIG Housing Loan Calculator – Estimate monthly amortization.
- Personal Loan Calculator Philippines – Compare loan repayment options.
- Car Loan Calculator Philippines – Estimate auto financing costs.
- Electricity Bill Calculator (Meralco Bill Estimator) – Plan your monthly household budget.
- Compound Interest Calculator (Philippine Peso Example) – Calculate savings growth over time.
📋 Example Tax Computation Table (2025)
| Salary | Taxable Income | Tax Due | Net Salary (After Tax & Deductions) |
|---|---|---|---|
| ₱20,000 | ₱0 | ₱0 | ₱18,000 |
| ₱30,000 | ₱120,000 | ₱0 | ₱27,000 |
| ₱40,000 | ₱386,400 | ₱20,000 | ₱30,533 |
| ₱60,000 | ₱626,400 | ₱60,000 | ₱42,200 |
| ₱100,000 | ₱1,226,400 | ₱152,000 | ₱71,000 |
🧠 Frequently Asked Questions (FAQ)
Q1. How often are BIR tax tables updated?
Usually every few years, especially after TRAIN Law revisions. 2025 rates reflect the latest update.
Q2. Is the 13th month pay taxable?
Only if it exceeds ₱90,000 in total for the year.
Q3. How can I check if my employer remits the correct tax?
Ask for your BIR Form 2316 (Certificate of Compensation and Tax Withheld).
Q4. What happens if I overpay my taxes?
You can apply for a tax refund or credit through BIR.
Q5. Are freelancers required to register with BIR?
Yes. Freelancers need to get a Certificate of Registration (Form 2303) and file quarterly taxes.