BIR tax table Philippines 2026: Guide for employers and HR teams

Payroll management in the Philippines relies heavily on the BIR tax table, which determines how employee income is taxed and reported. This table serves as a key reference for accurate salary calculations and compliance with Bureau of Internal Revenue regulations.

For HR teams, accountants, and business owners, understanding the BIR tax table is essential for applying the correct withholding tax rates. It also requires awareness of tax frameworks such as the TRAIN Law, which continues to shape payroll taxation. As tax regulations change, businesses must follow updated BIR guidelines — for example, BIR Revenue Regulation No. 5 updates withholding tax rates under the National Internal Revenue Code.

BIR Withholding Tax Table (effective 2023 — 2026)

Select the tab for your payroll frequency:

What Is the BIR Tax Table and Why Is It Crucial for Your Business?

The Bureau of Internal Revenue (BIR) tax table is a fundamental tool for every business in the Philippines, serving as the official guide for calculating the withholding tax on employee compensation. This graduated table outlines different tax rates that apply to various levels of taxable income.

For business owners, managers, and HR professionals, this table is not merely a reference but a critical component of payroll management and legal compliance. Properly utilising the BIR tax table directly impacts several core areas of your business operations:

• Regulatory compliance: Accurate withholding is the bedrock of regulatory finance oversight, protecting your company from BIR penalties, interest charges, and audit exposure.
• Employee trust: Correct payroll deductions build transparency and affect morale and retention.
• Financial planning: A clear grasp of tax brackets helps finance teams model labour costs accurately.

The current tax system in the Philippines is based on the TRAIN Law, which introduced a revised graduated income statement tax table. This table adjusts brackets and rates to provide relief for lower-income earners and is applied progressively — you only pay the higher rate on the portion of income that falls within that bracket, not on your entire salary.

How to read the BIR tax table and compute withholding tax

Step 1: Calculate taxable income

Taxable income is not the same as gross salary. Before finding the bracket, subtract the employee’s mandatory government contributions:

Taxable income = Gross monthly salary − (SSS employee share + PhilHealth employee share + Pag-IBIG employee share)

Step 2: Find the compensation range

Match the taxable income to the correct bracket in the monthly table above. Locate the row where your taxable income falls between the lower and upper limits of the compensation range.

Step 3: Apply the formula

Each bracket row has two components: a fixed base tax and a percentage applied to the excess over the lower bracket limit.

Withholding tax = Base amount + (Rate × (taxable income − compensation level))

Using an integrated payroll system automates tax calculations, applies the correct BIR tax table, and manages mandatory contributions, ensuring compliance, reducing errors, and improving efficiency as your workforce grows.

Ysable Manalo, Senior HR Manager

Conclusion

Understanding the BIR tax table and mandatory employee contributions is essential for every business operating in the Philippines. Staying current with the TRAIN Law rates — which have been in effect since January 2023 and continue through 2026 — ensures both operational stability and employee trust.

Manual payroll is error-prone and time-consuming, especially as a workforce grows. Automating tax calculations through an integrated payroll system centralises employee data, applies the correct BIR bracket automatically, computes mandatory contributions, and generates the reports your compliance team needs — all in one place. If you are evaluating your options, see our guide to payroll software in the Philippines to understand what features matter most for BIR compliance and scalability.

FAQ of BIR Tax Table

• Is there a new BIR tax table for 2026?

  No — there are no new rates for 2026. The TRAIN Law (RA 10963) revised withholding tax in two phases: Phase 1 applied from January 2018 to December 2022, and Phase 2 (the current, lower rates) took effect January 2023. There is no Phase 3. The rates in the tables above apply unchanged to 2026 payroll.

• What is the TRAIN Law and how does it affect the tax table?

  The TRAIN Law (Tax Reform for Acceleration and Inclusion, RA 10963) is the landmark tax reform that revised the personal income tax system in the Philippines. Signed in December 2017, it lowered income tax rates and raised the zero-tax threshold to ₱250,000 annually (₱20,833/month). Its graduated table is now the basis for all BIR withholding tax on compensation.

• Is the 13th month pay taxable?

  Under the TRAIN Law, the 13th month pay and other bonuses (including productivity incentives and Christmas bonuses) are non-taxable up to a combined maximum of ₱90,000 per year. Any amount exceeding this threshold is treated as taxable income and subject to the applicable graduated BIR rate.

• What happens if my company applies the wrong tax table?

  Using an incorrect or outdated tax table creates two risks. Under-withholding may result in BIR penalties, surcharges, and interest charges against the employer under the NIRC. Over-withholding causes employee dissatisfaction and requires the administrative effort of correcting the error and processing refunds — which can be complex for payroll teams. Using updated payroll software eliminates both risks.

• When must withheld taxes be remitted to BIR?

  Employers must file BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) and remit the tax on or before the 10th day of the following month (15th day for eFPS filers in certain groups). Non-compliance results in penalties and interest charges from the BIR.