Philippines Withholding Tax Calculator (BIR Compliant)

Understanding Withholding Tax Computation in the Philippines

The Problem: Accurately calculating withholding tax is a critical compliance requirement for employers in the Philippines. The Bureau of Internal Revenue (BIR) mandates complex formulas involving varying income levels, mandatory deductions (SSS, PhilHealth, Pag-Ibig), and different pay frequencies. Manual calculations are prone to errors and can lead to compliance issues.

The Solution: Automated and precise application of the BIR tax tables. NBS provides this calculator and comprehensive Payroll Solutions to ensure compliance and accuracy.

The Core Withholding Tax Formula

The standardized approach, based on BIR regulations, involves these steps:

1. Determine Taxable Income:
   Taxable Income = Gross Income - Non Taxable Income - SSS - Philhealth - Pag-Ibig
2. Identify the Compensation Bracket: Locate where the Taxable Income falls within the BIR table for the specific pay cycle (e.g., Semi-Monthly).
3. Calculate the Tax:
   Excess Taxable = Taxable Income - Minimum amount from Compensation Range
Withholding Tax = Fixed Tax + (Excess Taxable × Rate)

Official BIR Withholding Tax Table (Semi-monthly)

This table dynamically updates based on the Pay Cycle you select above. The bracket your income falls into will be highlighted upon calculation.