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How To Compute Withholding Tax In Philippines

Updated on November 5, 2016
Kate Yogeg profile image

Concepcion is an educator, explorer, math lover, a hubber, and a mother. She does writing as a hub.

Not everybody knows how to compute our tax deductions from our monthly salary income. Even myself I didn't know too before. The first time I received my payslip, I was just surprised on the amount that was deducted for withholding tax especially that I was still single that time without no qualified dependents. We should know every peso deducted from our hard-earned salary. So, here in my hub, I simply want to share what I have learned. The examples provided are based on individual earning purely compensation income and individuals engaged in business and practice of profession.

Check out these steps:

First, we should know our monthly taxable income by subtracting the total amount of mandatory contributions (examples: GSIS, PhilHealth, Pag-ibig Fund) from our basic salary.

For instance, a person has a monthly basic salary of P19,077, GSIS premium deduction P1,716.93 (19,077 x 9% ), PhilHealth P237.50, Pag-ibig Fund P100.00.

Step 1


Second, compute the annual taxable income by multiplying the monthly taxable (answer in step 1) by 12 months.

Step 2

Then, know your personal tax exemption. Subtract the annual personal exemption from the annual taxable income to get your Annual Net Taxable Income.

Step 3

Using the Annual Tax Table below, determine which bracket your answer in step 3 belongs to get the annual tax. Then, follow the indicated tax rate.

Step 4

Lastly, compute your monthly income tax by dividing your answer in step 4 by 12 months. The result is the amount reflected on your payslip.

Step 5

Now, let's have a quiz.

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