Northeast Business Solutions, Inc. NBS
Annualization (or Annualized Tax Computation) is the process required by the Bureau of Internal Revenue (BIR) to ensure that employees are paying the right amount of tax. It involves reviewing the whole year's Earnings, Deductions, Statutory Contributions, and Tax Withheld. This determines if the employee is due for a refund or needs to pay a tax liability.
Determine your year-end tax payable or refund by annualizing your 12-month earnings, deductions, and tax withheld.
Tax rates effective from Calendar Year 2023 and onwards pursuant to Republic Act No. 10963.
| Net Taxable Income Range | Applicable Tax Rate |
|---|---|
| ₱250,000 and below | 0% (Tax-Exempt) |
| Over ₱250,000 up to ₱400,000 | 15% of the excess over ₱250,000 |
| Over ₱400,000 up to ₱800,000 | ₱22,500 + 20% of the excess over ₱400,000 |
| Over ₱800,000 up to ₱2,000,000 | ₱102,500 + 25% of the excess over ₱800,000 |
| Over ₱2,000,000 up 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 |