How to Compute Philippine BIR taxes

The following is required information for you to compute your income tax.

• How much is your SSS/Philhealth and PagIbig contributions
• Allowances and other benefits if any
• Copy of the BIR Tax table

Here’s an easy way on how to compute employee taxes for the month

• Basic Salary: Php 40,000.00
• Status: Single without dependent
• Late deduction: Php 357.83
• SSS Contribution: Php 581.30
• Philhealth Contribution: Php 437.50
• Pag-Ibig Contribution: Php 100.00

Taxable income
= Monthly Basic Pay + Overtime Pay + Holiday Pay + Night
Differential - Tardiness - Absences - SSS/Philhealth/PagIbig deductions
= 40,000 - 357.83 - 581.30 - 437.50 -100
= Php 38,523.37

Your tax for the month is Php 1,954.25 by simply checking on this BIR Tax Table:
https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2018/WT%20table.pdf

Under Monthly Compensation Level (CL) look of the nearest figures with your taxable income and the nearest amount is 33,333 and the tax is Php 2,500.00 + 25% in excess of 33,333.
So your tax is 33,333.00 = 2,500.00
Excess (38,523.37-33,333) = 5190.37 X 25% = 1,297.5925 Tax is ( 2,500 + 1,297.5925) = Php 3797.5925

Note: Republic Act 10963 totally removes personal exemptions while increasing the nontaxable other benefits to P90,000 a year. This will be valid from January 1, 2018 upto December 31, 2022. After that, tax will further decrease to, 0, 15%, 20%, 25%, 30%, 35% respectively. While 8M bracket will retain its tax rate, its fixed tax will decrease to P2,202,500