How to Compute Philippine BIR Taxes (TRAIN Law)?

What is TRAIN?

Tax Reform for Acceleration and Inclusion

The goal of the first package of the Comprehensive Tax Reform Program (CTRP) or TRAIN is to create a simpler, fair, and more efficient system, as per the constitution, where the rich will have a bigger contribution and the poor will benefit more from the government’s programs and services.

The following are the needed information for you to compute your income tax.

– How much is your SSS/Philhealth and PagIbig contributions

– Allowances and other benefits if any

– Copy of the BIR Tax table

Here’s an easy way on how to compute employee taxes for the month

Basic Salary: Php 30,000.00

Overtime Pay: Php 2,500.00

Late deduction: Php 500.00

SSS Contribution: Php 581.30

Philhealth Contribution: Php 412.50

Pag-Ibig Contribution: Php 100.00


Taxable income = Monthly Basic Pay + Overtime Pay + Holiday Pay + Night Differential – Tardiness- Absences – SSS/Philhealth/PagIbig deductions

Php 30,906.2 = 30,000 + 2,500 -500-581.30-412.50-100

Your tax for the month is Php 2,014.57  by simply checking on this BIR Tax Table

= ((((30906.2*12)-250000)*(100*20)/12

So 30,906.2 x 12
Less 250,000
Multiply by 20%
Divide it by 12 pay periods

= 2014.57333333333333 or 2014.57

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