BIR Withholding Tax Table 2026: Monthly, Semi-Monthly, and Daily Rates Explained

Every payday in the Philippines, millions of employees see a line on their payslip labeled 'withholding tax' — and most have no idea whether the number is correct. Whether you are an HR manager running payroll for fifty employees or a rank-and-file worker wondering why your take-home pay is lower than expected, understanding the BIR withholding tax table is essential. This guide breaks down the 2026 rates, tables, and computations in plain language — covering monthly, semi-monthly, and daily schedules — so you can verify every deduction with confidence.

What Is Withholding Tax on Compensation in the Philippines?

Withholding tax on compensation is the portion of your income tax that your employer deducts from your salary before you receive it. Instead of waiting for you to pay your income tax at the end of the year, the government collects it in small amounts every payroll period through your employer. The legal basis for this system is Section 79 of the National Internal Revenue Code (NIRC), as amended by the Tax Reform for Acceleration and Inclusion (TRAIN) Law — Republic Act 10963 — which took effect on January 1, 2018 and introduced its permanent tax schedule starting January 1, 2023.

Your employer acts as a withholding agent — a legal role with real accountability. This means your company is not just doing you a favor by computing your tax; it is legally required to do so accurately and remit the correct amount to the Bureau of Internal Revenue (BIR) on your behalf. The amounts withheld throughout the year are credited against your total income tax liability. At year-end, your employer issues BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld), which documents everything that was deducted. For employees with a single employer and purely compensation income, this Form 2316 effectively substitutes for filing your own annual income tax return. Employers who fail to withhold correctly, withhold too little, or remit late face surcharges, interest, and compromise penalties under the NIRC. For a complete reference document, see the full BIR withholding tax table at pesohub.ph/government/bir/withholding-tax-table-philippines.

Are the 2026 Withholding Tax Rates Different From 2025?

The short answer is no — not under existing law as of this writing. The TRAIN Law operated in two phases. The first phase covered 2018 to 2022 with transitional (lower) rates. The second phase — the permanent schedule — kicked in on January 1, 2023 and applies indefinitely unless Congress passes a new law or the BIR issues amending Revenue Regulations. Since no new individual compensation tax reform law had been enacted into law that changes these brackets as of this article's knowledge cutoff, the 2026 withholding tax tables are identical to those used in 2023, 2024, and 2025.

It is worth clarifying a common misconception: changes in the Bangko Sentral ng Pilipinas (BSP) policy rate and inflation do NOT automatically adjust BIR tax brackets. Unlike some countries that index tax brackets to inflation each year, the Philippines requires an act of Congress or a BIR Revenue Regulation to change the income tax schedule. So even as prices rise, your tax brackets remain the same until the law explicitly says otherwise.

2026 BIR Income Tax Brackets for Individuals (Compensation Income)

The foundation of every withholding tax table — whether monthly, semi-monthly, or daily — is the annual income tax schedule under Section 24(A)(2)(a) of the NIRC as amended by the TRAIN Law. All the period-specific tables published by the BIR are mathematical derivatives of these annual brackets. Here is the schedule that applies in 2026:

• Annual taxable income of ₱0 to ₱250,000: 0% — completely tax-exempt.
• Annual taxable income of ₱250,001 to ₱400,000: 15% on the amount exceeding ₱250,000.
• Annual taxable income of ₱400,001 to ₱800,000: ₱22,500 fixed tax, plus 20% on the amount exceeding ₱400,000.
• Annual taxable income of ₱800,001 to ₱2,000,000: ₱102,500 fixed tax, plus 25% on the amount exceeding ₱800,000.
• Annual taxable income of ₱2,000,001 to ₱8,000,000: ₱402,500 fixed tax, plus 30% on the amount exceeding ₱2,000,000.
• Annual taxable income above ₱8,000,000: ₱2,202,500 fixed tax, plus 35% on the amount exceeding ₱8,000,000.

Notice that the taxable income used to enter these brackets is not your gross salary. It is your compensation AFTER subtracting mandatory contributions to SSS, PhilHealth, and Pag-IBIG (HDMF), as well as any qualified tax-exempt benefits. We will walk through exactly how to arrive at that net taxable figure in the step-by-step computation section below.

Monthly Withholding Tax Table 2026

The monthly withholding tax table is used by employers who pay salaries once a month. The BIR derives the monthly brackets by dividing the annual thresholds by 12 pay periods. The monthly tax-exempt threshold is ₱20,833 (₱250,000 ÷ 12). Any employee whose monthly taxable compensation is at or below this amount should have zero withholding tax deducted.

Here is how the monthly bracket structure looks in 2026:

• Monthly taxable compensation up to ₱20,833: 0% — exempt.
• ₱20,834 to ₱33,333: 15% on the excess over ₱20,833.
• ₱33,334 to ₱66,667: ₱1,875 + 20% on the excess over ₱33,333.
• ₱66,668 to ₱166,667: ₱8,541.80 + 25% on the excess over ₱66,667.
• ₱166,668 to ₱666,667: ₱33,541.80 + 30% on the excess over ₱166,667.
• Over ₱666,667: ₱183,541.80 + 35% on the excess over ₱666,667.

Keep in mind that these bracket entry points are applied to taxable compensation — meaning your gross pay minus SSS, PhilHealth, and Pag-IBIG contributions. Also remember that the ₱90,000 ceiling for 13th month pay and other bonuses reduces your annual taxable income, which can shift which monthly bracket applies to you toward year-end. HR teams should account for this during the December annualization process.

Semi-Monthly Withholding Tax Table 2026

Semi-monthly payroll — paid on the 15th and last day of the month — is the most common setup among Philippine private companies and many government-owned corporations. For this pay frequency, the BIR derives the brackets by dividing the annual thresholds by 24 pay periods. The semi-monthly tax-exempt threshold is ₱10,417 (₱250,000 ÷ 24).

Let us walk through a practical example. Suppose your employee, Ana, earns a gross semi-monthly salary of ₱17,500 (equivalent to ₱35,000 per month). Her semi-monthly mandatory deductions are: SSS employee share of approximately ₱581.30, PhilHealth employee share of approximately ₱437.50 (based on 2.5% of her ₱35,000 monthly basic pay, split in half for semi-monthly payroll), and Pag-IBIG of ₱50. Total deductions from taxable base: approximately ₱1,068.80. Her semi-monthly taxable compensation is therefore approximately ₱17,500 minus ₱1,068.80 equals ₱16,431.20. Since ₱16,431.20 is above the ₱10,417 exempt threshold, it falls in the 15% bracket. The taxable excess over ₱10,417 is ₱6,014.20. Multiplied by 15%, that equals approximately ₱902.13 in withholding tax for that pay period. Note: always use the exact BIR-issued Annex tables rather than manually converting annual figures. Manual rounding can accumulate into a meaningful discrepancy over 24 pay periods, which will surface during year-end annualization.

Daily and Weekly Withholding Tax Tables 2026

Not all workers in the Philippines receive a fixed monthly or semi-monthly salary. Daily-wage workers in construction, manufacturing, agriculture, and the BPO industry — as well as project-based employees — are paid on a daily or weekly basis. The BIR provides separate tables for these pay frequencies.

• Daily table: exempt threshold is approximately ₱685 per day (₱250,000 ÷ 365). Used for workers paid on a per-day basis.
• Weekly table: exempt threshold is approximately ₱4,808 per week (₱250,000 ÷ 52). Used for weekly payrolls common in small manufacturers and retail.
• Bi-weekly table: exempt threshold is approximately ₱9,615 per pay period (₱250,000 ÷ 26). Used when employees are paid every two weeks, as distinct from twice a month.

An important but often overlooked application: employers of kasambahay (household workers) are also required to withhold income tax if their kasambahay's compensation exceeds the applicable exempt threshold. Under the Kasambahay Law (Republic Act 10361), employers who pay a household worker above the daily or monthly exempt ceiling must act as withholding agents just as any corporate employer would. This is rarely done in practice but is a legal obligation. To simplify your computation across any pay frequency, try the PesoHub Withholding Tax Calculator at pesohub.ph/calculators/tax/withholding-tax-calculator-philippines.

How to Compute Withholding Tax Step by Step

Let us use a concrete example: Marco earns a gross monthly salary of ₱40,000 as a marketing associate at a Manila-based company. Here is the full step-by-step computation of his monthly withholding tax.

1. 1.Determine gross compensation. Marco's gross pay is ₱40,000 per month. This includes his basic salary of ₱38,000 and a fixed monthly allowance of ₱2,000 that is part of his compensation package and is taxable.
2. 2.Subtract mandatory non-taxable contributions. SSS employee share: approximately ₱900 (based on the current SSS contribution table for his salary bracket). PhilHealth employee share: ₱1,000 (2.5% of ₱40,000 monthly basic, with employer and employee splitting the 5% premium equally). Pag-IBIG employee share: ₱100 (standard mandatory contribution). Total deductions: ₱2,000.
3. 3.Subtract the 13th month and other benefits up to ₱90,000. Since we are computing a regular monthly payroll period and no bonus is paid this month, this step does not reduce Marco's taxable income for this particular period. This deduction will be most relevant in the month his 13th month pay is released.
4. 4.Identify taxable compensation income. ₱40,000 minus ₱2,000 mandatory contributions equals ₱38,000 taxable compensation for the month.
5. 5.Apply the correct monthly bracket. ₱38,000 falls in the ₱33,334 to ₱66,667 bracket. The formula is: ₱1,875 (base tax) plus 20% of the excess over ₱33,333. The excess is ₱38,000 minus ₱33,333 equals ₱4,667. Twenty percent of ₱4,667 equals ₱933.40. Total withholding tax: ₱1,875 plus ₱933.40 equals ₱2,808.40.
6. 6.Remit to BIR. Marco's employer withholds ₱2,808.40 from his April paycheck and remits it to the BIR by filing BIR Form 1601-C on or before the due date of the following month.

Over 12 months, Marco's total estimated withholding (assuming consistent compensation) would be approximately ₱33,700.80. At year-end annualization, his employer reconciles this total against his actual annual tax liability to ensure no significant over- or under-withholding occurred.

Mandatory Deductions That Reduce Your Taxable Compensation

Understanding which deductions reduce your taxable compensation is just as important as knowing the tax brackets themselves. Three government-mandated contributions are legally excluded from the income tax base:

• SSS (Social Security System) — employee share only. The SSS contribution schedule has been updated multiple times in recent years as part of the SSS contribution rate increase roadmap. The employee share (currently set at 4.5% of monthly salary credit, subject to the current SSS table) is fully deductible from gross compensation before applying the tax brackets.
• PhilHealth — employee premium share. The employee pays half of the total PhilHealth premium rate, currently set at 2.5% of the basic monthly salary (from a total of 5%), subject to a monthly salary floor and ceiling. This employee share is deductible from gross compensation.
• Pag-IBIG (HDMF) — mandatory employee contribution of ₱100 per month for most employees. This is deductible. Note: voluntary contributions above the mandatory minimum (e.g., Pag-IBIG MP2 savings) are generally NOT deductible for withholding tax purposes.
• What is NOT deductible: union dues, SSS salary loans, Pag-IBIG housing loan amortizations, company cash advances, and other payroll deductions do not reduce taxable compensation. Only the three mandatory government contributions listed above are excluded from the withholding tax base.

Tax-Exempt Compensation Items in 2026

Beyond the mandatory contributions, Philippine law carves out several other forms of compensation that are entirely exempt from income tax and therefore not subject to withholding. Knowing these exemptions can help employees and HR teams ensure that tax is not being withheld where it should not be.

• 13th month pay and other bonuses up to ₱90,000 per year — the TRAIN Law set this ceiling, and it remains at ₱90,000 for 2026. Any amount exceeding ₱90,000 is taxable and subject to withholding.
• De minimis benefits within BIR-defined limits, including: rice subsidy up to ₱2,000 per month; clothing or uniform allowance up to ₱6,000 per year; medical cash allowance to dependents up to ₱750 per month (₱1,500 per semester); laundry allowance up to ₱300 per month; employee achievement awards in the form of tangible personal property up to ₱10,000 per year; gifts given during Christmas and major anniversary celebrations up to ₱5,000 per year; daily meal allowance for overtime and night or graveyard shift up to 25% of the applicable minimum wage.
• SSS, PhilHealth, and Pag-IBIG mandatory contributions (as discussed above).
• Retirement benefits received under a BIR-approved retirement plan or under RA 7641 (Retirement Pay Law), subject to qualifying conditions (at least 50 years old and at least 10 years of service in the company, among others).
• Separation pay due to causes beyond the employee's control — including death, sickness, physical disability, or for any authorized cause such as redundancy and retrenchment.
• Benefits received from GSIS, SSS, PhilHealth, and Pag-IBIG — these are not included in taxable gross compensation.
• Minimum Wage Earners (MWEs) — the statutory minimum wage plus holiday pay, overtime pay, night shift differential pay, and hazard pay are entirely exempt from income tax and withholding. MWEs are one of the most commonly mishandled categories in Philippine payroll.

Special Cases: Minimum Wage Earners, Mixed Income, and OFWs

Not every income earner in the Philippines fits neatly into the standard employee-with-one-employer scenario. Several special groups have distinct withholding tax rules.

Minimum Wage Earners (MWEs) deserve particular attention. Under the NIRC, workers whose basic pay equals the statutory minimum wage set by the Regional Tripartite Wages and Productivity Board (RTWPB) for their region are completely exempt from income tax and withholding — including on their overtime pay, holiday pay, night shift differential, and hazard pay. Critically, the applicable minimum wage depends on the region where the work is performed. An employer in Metro Manila, for example, must use the NCR RTWPB-mandated minimum wage, while an employer in Cebu must use Region VII's rate. Withholding tax from an MWE is a BIR violation and can expose the employer to penalties.

Mixed-income earners — employees who also earn income from a business or profession on the side — face a more complicated tax picture. Their employer still withholds on the compensation portion using the standard tables. However, since they also have self-employment or professional income, they must file their own annual Income Tax Return using BIR Form 1701. They cannot qualify for substituted filing. The withholding tax on their compensation becomes a tax credit against their total income tax due. If you are a mixed-income earner, working with a Certified Public Accountant (CPA) to optimize your quarterly estimated tax payments alongside your employer withholding is strongly advisable.

Overseas Filipino Workers (OFWs) earning income purely from work abroad are generally exempt from Philippine income tax on those foreign earnings. However, OFWs who also have Philippine-sourced income — such as rental income from a property in the Philippines — may still have withholding obligations on that Philippine-sourced income, though through different mechanisms (typically creditable withholding tax rather than compensation withholding). Self-employed individuals and professionals receiving professional fees are subject to creditable withholding tax (CWT) at rates specified in Revenue Regulations separate from the compensation withholding tables covered here.

Employer Obligations: Filing, Remittance, and Year-End Reconciliation

Being a withholding agent comes with a specific set of compliance deadlines that HR and accounting teams must track carefully throughout the year.

• BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation): Filed and paid on or before the 10th day of the following month for manual filers, or the 15th for eFPS (Electronic Filing and Payment System) users. This is your month-to-month remittance form.
• BIR Form 1604-C (Annual Information Return of Income Taxes Withheld on Compensation): Due on January 31 of the following year. This consolidates all monthly remittances and lists each employee's total compensation and total tax withheld for the year.
• BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld): Issued to each employee by January 31. This is the document employees use to prove their tax was withheld correctly. It also serves as the substitute income tax return for qualified employees.
• Year-end annualization: In December (or the last payroll period before the employee's last working day), employers must annualize each employee's total taxable compensation for the year, compute the correct annual tax, compare it against total tax already withheld, and either collect the deficiency or refund any over-withholding through the December payroll. This reconciliation is what makes the substituted filing system work.
• Penalties for non-compliance: Late filing or under-remittance triggers a 25% surcharge on the unpaid tax, 12% interest per annum on the deficiency, and possible compromise penalties ranging from a few thousand pesos to significantly more depending on the size of the discrepancy.

Common Withholding Tax Mistakes and How to Avoid Them

After speaking with HR practitioners and tax consultants across the Philippines, the same errors come up repeatedly. Here are the most damaging mistakes and how to prevent them:

• Mistake 1 — Using the old 2018–2022 transitional TRAIN Law brackets: The lower transitional rates no longer apply. Using the pre-2023 table results in consistent under-withholding, meaning employees will owe money at year-end annualization — or worse, the employer gets assessed a deficiency by the BIR.
• Mistake 2 — Not updating contribution amounts when SSS, PhilHealth, or Pag-IBIG rates change: When these agencies adjust their contribution schedules mid-year (which has happened multiple times), the non-taxable deduction amount changes, which shifts the taxable compensation base and therefore the withholding tax amount. Payroll system tables need to be updated immediately.
• Mistake 3 — Mishandling 13th month pay: The first ₱90,000 is tax-exempt. Any amount above ₱90,000 — whether from the 13th month pay alone or combined with other bonuses — is fully taxable. Many payroll teams either forget to withhold on the excess or withhold incorrectly. The excess must be added to the annualized taxable income in the month it is released.
• Mistake 4 — Withholding from Minimum Wage Earners: This is a straightforward violation of the NIRC. If your employee earns exactly the RTWPB-mandated minimum wage, you must not withhold. Period. Always check regional wage orders when onboarding workers in multiple locations.
• Mistake 5 — Applying the wrong pay-frequency table: The monthly table applied to a semi-monthly payroll results in over-withholding by a factor of approximately two. Match the BIR table to your actual pay frequency without exception.
• Mistake 6 — Skipping or miscalculating year-end annualization: Annualization is not optional. If skipped, employees who should receive a refund won't get it, and employees who owe additional tax won't have it collected — creating problems for Form 2316 issuance and potentially triggering BIR assessments.

How to Use the PesoHub Withholding Tax Calculator

The PesoHub Withholding Tax Calculator at pesohub.ph/calculators/tax/withholding-tax-calculator-philippines is a free tool built specifically for Philippine compensation tax computation. Here is how to get the most out of it.

1. 1.Enter your gross compensation for the period. This includes your basic pay, fixed allowances, and any taxable bonuses for the period.
2. 2.Select your pay frequency — monthly, semi-monthly, bi-weekly, weekly, or daily. The calculator will apply the correct BIR bracket for that period.
3. 3.Enter your SSS, PhilHealth, and Pag-IBIG contributions manually, or tick the 'compute automatically' option to let the calculator estimate them based on your gross pay.
4. 4.Input any tax-exempt allowances (de minimis, 13th month pay within the ₱90,000 ceiling) so they are excluded from the taxable base.
5. 5.Review your outputs: the calculator shows your taxable compensation, withholding tax per pay period, and an annualized estimate of your income tax for the year.

Employees can use the calculator to verify that their payslip deductions match what the BIR table prescribes. If your employer is withholding significantly more or less than the calculator shows, raise the question with your HR or payroll department and ask them to show you their computation basis. Payroll staff can use the tool as a quick sanity check before finalizing each payroll run, particularly after salary adjustments or when new mandatory contribution rates take effect.

Important Disclaimer and Where to Get Official BIR Tables

This article is written for informational and educational purposes only. Nothing in this article constitutes legal, tax, accounting, or professional advice. Philippine tax regulations can and do change — through new legislation by Congress, BIR Revenue Regulations, or Revenue Memorandum Circulars issued by the Commissioner of Internal Revenue. Any of these can alter withholding tax rates, brackets, contribution ceilings, or exempt benefit limits, sometimes with very short notice.

For authoritative and up-to-date withholding tax tables, always refer to the official BIR website at bir.gov.ph. The primary governing issuance for compensation withholding tax is Revenue Regulations No. 11-2018 (which implemented the TRAIN Law's withholding provisions) and all subsequent amending Revenue Regulations. The BIR also releases updated Annex tables that accompany these regulations — these are the tables your payroll system or HR team should be loading each year.

PesoHub is an independent personal finance website and is not affiliated with, endorsed by, or connected to the Bureau of Internal Revenue or any other Philippine government agency. All information on this site is compiled from publicly available official sources and is updated on a best-efforts basis as new regulations are released. For payroll systems serving multiple clients, year-end tax compliance work, or any situation involving significant tax amounts, always engage a Certified Public Accountant (CPA) or a BIR-accredited tax agent.