Who is tax-exempt under the TRAIN law
- Annual taxable income of ₱250,000 or below is exempt from income tax.
- 13th-month pay and other benefits are separately exempt up to ₱90,000 combined.
- Minimum-wage earners are exempt from income tax.
- Above ₱250,000, tax is charged on the excess using the BIR graduated rates (15% up to 35%).
The graduated tax brackets
Under the TRAIN law schedule effective 2023 onward, income tax is charged only on the portion of your annual taxable income above ₱250,000:
- ₱250,000 and below — 0%
- Over ₱250,000 to ₱400,000 — 15% of the excess over ₱250,000
- Over ₱400,000 to ₱800,000 — ₱22,500 + 20% of the excess over ₱400,000
- Over ₱800,000 to ₱2,000,000 — ₱102,500 + 25% of the excess over ₱800,000
- Over ₱2,000,000 to ₱8,000,000 — ₱402,500 + 30% of the excess over ₱2,000,000
- Over ₱8,000,000 — ₱2,202,500 + 35% of the excess over ₱8,000,000
A worked example
Suppose your annual taxable income is ₱350,000. Only the amount above ₱250,000 is taxed, so tax applies to ₱100,000 at 15% = ₱15,000 per year, or about ₱1,250 a month. Your effective rate is just 4.3% of income, even though your bracket's marginal rate is 15% — because the first ₱250,000 is always tax-free.
Frequently asked questions
What income should I enter?
Your taxable income — basic pay less the mandatory SSS, PhilHealth, and Pag-IBIG contributions. That's usually lower than your gross salary.
How can I lower my taxable income?
Mandatory SSS, PhilHealth, and Pag-IBIG contributions are deducted before tax, so they reduce your taxable income. So do de minimis benefits within their limits and the ₱90,000 tax-free ceiling on 13th-month pay and other benefits. This tool looks only at your regular taxable salary.
Does the ₱90,000 benefits exemption change my status here?
No. That exemption applies to 13th-month pay and similar benefits, which are handled separately. This checker looks at your regular taxable salary.
How is the tax estimated when I'm taxable?
It applies the BIR graduated table under the TRAIN law to your annual taxable income, then divides by 12 for the monthly figure.
What's the difference between marginal and effective rate?
Your marginal rate is the rate on your top peso of income (your bracket). Your effective rate is total tax ÷ total income, which is always lower because the first ₱250,000 is exempt and lower brackets are taxed at lower rates.
Are freelancers and self-employed people covered?
The same ₱250,000 exemption applies. Self-employed and professional earners under the VAT threshold may also opt for the flat 8% tax on gross receipts instead of the graduated table — this checker models the graduated rates, so treat it as a guide for employees.
Is my income uploaded?
No. The check runs entirely in your browser. Nothing you enter is stored or sent to a server.