PhilippinesAnnual graduated tax and payroll withholding are calculated separately. Pure self-employment does not include hidden compensation; the 8% option checks the receipts ceiling and eligibility. Nonresident 25% tax uses Philippine-source gross income, while payroll uses the published daily, weekly, semi-monthly or monthly table.
Formula
Graduated tax = progressive annual table. Eligible pure self-employment: 8% × max(0, business receipts − PHP 250,000). Mixed income: graduated compensation tax + 8% of business receipts. Payroll: the BIR table for each pay frequency.
When to use this calculator
Compensation, self-employment and mixed income can require different calculations. This tool helps compare the supported regimes while separating annual income tax from payroll withholding. Choosing the correct income category prevents a threshold or optional rate from being applied to income it does not cover.
Information to prepare
Confirm whether the optional business treatment is available and whether compensation income is also present. Prepare receipts, allowable expenses or deductions and the selected pay frequency where relevant. An allowance used in a pure self-employment case should not automatically be applied again in a mixed-income case.
How to interpret the result
Gross income, taxable income and tax liability are different quantities. A deduction can change the tax base, while a credit or prior payment can change liability or the remaining balance. Under progressive bands, the marginal rate does not necessarily apply to the whole income. An effective rate depends on the denominator used: gross receipts, net income and taxable income can produce different percentages. Read the component labels and included reliefs before treating an effective percentage as a rate for another income scenario.
A practical comparison
When checking a payslip, use the payroll mode and its period rather than simply dividing an annual estimate. When comparing business regimes, keep the same income records and review which deductions each calculation permits. VAT on sales remains a separate transaction-tax question.
Check your calculation step by step
- Match the figures to the selected period and use PHP for monetary inputs. If you start with a document in another currency or covering several periods, resolve that difference before entering a combined amount.
- Calculate the documented case first. Then change one input at a time to compare scenarios. Keep the original values available so a change in the result can be traced to a particular assumption rather than several simultaneous edits.
- Read the component breakdown alongside the formula and examples below. If an official document differs, check the date, base, rounding and omitted concepts before changing a rate or treating the difference as an error.
Continue with a related calculation
These tools cover other questions in Philippines. Choose the one that matches the amount you want to check:
- Philippines VAT calculator
Philippines VAT at 12%, government withholding and NRDSP digital-service reverse charge, with eligible input VAT kept separate.
If you are comparing countries
Open the relevant jurisdiction when comparing a move, an offer or a transaction abroad. Each tool uses its own currency, period and scope; its result should not be substituted into the current calculation.
Official sources
- BIR: RR 8-2018, graduated tax and 8% conditionsConsulted: 2026-09-14
- BIR: Annex E, RR 11-2018, payroll tables effective from 2023Consulted: 2026-09-14
- BIR: official payroll calculatorConsulted: 2026-09-14
- BIR: payroll calculation code, confirms daily fixed amountConsulted: 2026-09-14
- TRAIN Act: Republic Act 10963Consulted: 2026-09-14