Withholding Tax Calculator

Withholding tax is an advance payment of your annual income tax, collected by your employer at the time of payment. The BIR requires employers to withhold a portion of your gross compensation and remit it to the government. This ensures timely tax collection and reduces the risk of non-payment. The amount withheld is credited against your total annual income tax liability when you file your annual Income Tax Return (ITR). If you over-pay through withholding, you may claim a refund.

For compensation, this calculator annualizes the pay and permitted exclusions you enter, applies the graduated annual rates effective from 2023, then divides the tax back into your pay period. It is an estimate: payroll uses the prescribed compensation tables and year-end reconciliation, so rounding or irregular pay can differ. Expanded withholding uses the applicable transaction rate and eligibility conditions.

Withholding tax on compensation (WTC) is deducted by the employer from salary or wages at each pay period using the graduated Annex E table (NIRC Sec 79); it is remitted on BIR Form 1601-C and certified year-end on Form 2316. Expanded withholding tax (EWT) on professional fees is deducted by the payor (client) at a flat rate (5% or 10% for individuals, 10% or 15% for corporations, RR 11-2018 Sec 2.57.2) and certified on Form 2307. EWT is a creditable tax under NIRC Sec 57(B): the professional claims it as a credit on their own income tax return. Use the calculator to select the correct withholding type for accurate results.

Excess compensation withholding is normally addressed through employer annualization; reconcile your payslips and Form 2316 with payroll. Other excess credits must follow the refund or carry-over rules for the relevant return. Filing an ITR does not guarantee a refund in 30–90 days. Keep the required certificates and payment records.

Combine the taxable compensation and withholding credits from all employers when preparing your annual return. Separate payroll calculations may leave too little or too much tax withheld; they do not guarantee a refund. Give your new employer the previous employer’s Form 2316 when changing jobs. Two or more employers during the year generally means you do not qualify for substituted filing.

It depends on whether the non-resident alien is engaged in trade or business in the Philippines. A non-resident alien NOT engaged in trade or business (NRA-NETB) is subject to a flat 25% withholding on gross Philippine-source income under NIRC Sec 25(B). A non-resident alien engaged in trade or business (NRA-ETB), including one employed here for an extended period, is taxed at the same graduated rates as residents (NIRC Sec 25(A)), so the regular Annex E withholding table applies. Confirm the alien's classification before applying a rate.

When filing your annual ITR, report all withholding taxes credited during the year. For compensation, obtain the Certificate of Compensation Payment/Tax Withheld (BIR Form 2316) from your employer. For professional fees and other income payments subject to expanded withholding, obtain the Certificate of Creditable Tax Withheld at Source (BIR Form 2307) from each payor. Enter the total as a tax credit on your ITR. The BIR compares your total withholding against your annual tax liability and processes any refund or additional tax due.

No. TRAIN removed personal and dependent exemptions. The zero-tax bracket is part of the graduated schedule. Mandatory employee contributions and qualifying exempt benefits are excluded under their own rules; ordinary personal spending is not deductible from salary.

Low taxable compensation is handled through the withholding table and applicable statutory exemptions, not a general certificate that lets an employee choose to stop withholding. Ask payroll to check taxable pay, mandatory contributions and exempt benefits. Do not confuse an employment certificate with a tax exemption.

If your employer withholds less than the required amount, you may owe additional tax when you file your annual ITR. The BIR may also assess penalties and interest against your employer for under-withholding. If your employer withholds more than required, you may claim a refund on your ITR. Always verify that your employer is using the current 2023-onwards Annex E table and your correct pay period. If you believe there is an error, contact your employer's payroll department or the BIR.

You should verify your withholding tax calculation at least annually, especially if your pay period or gross compensation changes. Use this calculator to estimate your withholding for the current year and compare it to your expected annual tax liability. If there is a significant difference, contact your employer to adjust your withholding or plan for additional tax payments. Review your Certificate of Compensation Payment/Tax Withheld (BIR Form 2316) before the annual reconciliation to ensure accuracy.

Yes. The employee's mandatory SSS, PhilHealth, and Pag-IBIG contributions are non-taxable and are excluded from taxable compensation before the withholding table is applied (NIRC Sec 32(B)(7)(f)). There are no personal exemptions: TRAIN repealed them in 2018, replacing them with the ₱250,000 annual (₱20,833 monthly) zero-tax bracket already built into the Annex E table. Voluntary deductions such as employee loans or cooperative dues are not subtracted before computing withholding. The table is designed so that total annual withholding closely approximates your final income tax liability.

It is the tax deducted before you receive the payment. For a ₱20000 fee subject to 5% creditable withholding, ₱1000 is withheld and ₱19000 is paid before any other charges or VAT adjustments. The ₱1000 is supported by Form 2307 and credited against income tax; it is not a discount on your fee.