Computing Pay for Work Done on

 A Regular Day (basic daily rate = monthly rate x number of months in

a year (12) / total working days in a year)
 A Special Day (130% x basic daily rate)
 A Special Day, which is also a scheduled Rest Day (150% x basic
daily rate)
 A Regular Holiday (200% x basic daily rate)
 A Regular Holiday, which is also a scheduled Rest Day (260% x
basic daily rate)

Computing Night Shift Premium where Night Shift is a

Regular Work
 Ordinary Day (110% x basic hourly rate)
 Rest Day, Special Day or Regular Holiday (110% of regular hourly
rate)

Computing Overtime
 On Ordinary Days
o Number of hours in excess of 8 hours (125% x hourly rate)
 On a Rest Day, Special Day, or Regular Day
o Number of hours in excess of 8 hours (130% x hourly rate)
 On a Night Shift
o Ordinary Day (110% x basic hourly rate)
o Rest Day, Special Day or Regular Holiday (110% x overtime
hourly rate)

Computing 13th Month Pay

 Total basic salary earned for the year exclusive of overtime, holiday,
and night shift differential pay divided by 12 = 13thmonth pay

Below are the steps on computing employee’s salary:

1. Compute for your Gross Taxable Income
Gross Taxable Income are composed of the following:
o Basic Salary
o Overtime pay
o Holiday pay premiums
o Night Differentials
o Taxable allowances
o Taxable bonus or 13th month pay
o Other taxable income
o Less Absences, Undertime and Tardiness
2. Deduct Government Mandated Statutory contributions (SSS, HDMF,
Philhealth) to arrive on the net Taxable Income

 Net Taxable income = Gross taxable income – SSS EE share –

HDMF EE share – Philhealth EE share

3. Compute for the tax amount

The following is required information 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
4. Compute for the Gross Salary after tax

 Gross salary after tax = Gross Taxable income less Tax

5. Compute for the net salary

 Net salary = Gross pay after tax + non-taxable allowance and bonus
(de minimis, non-taxable 13th month pay, referral fee, etc) – other
deductions (loans, excess payments, etc)

Payroll in the Philippines: Wages and Related Benefits

After incorporating a company, it is essential to know how to calculate your employees’

salaries and benefits correctly. In this article, we are going to take a closer look at the
wage system and payroll in the Philippines.

Some of the common questions foreign companies have related to payroll are whether
there are mandatory bonuses? What does “holiday pay” mean in the Philippines? Is the
13th-month pay taxable? What’s the easiest way to manage payroll in the Philippines?
Keep reading to get answers to these questions and more.

Managing Payroll in the Philippines

In the Philippines, employers are responsible for withholding taxes from their
employees’ salaries. As such, the company must compute its employees’ taxable income
before distributing their salaries.

It sounds simple enough until you encounter things like holiday pay and night shift
differential. Employees and employers must also pay mandatory benefit contributions.
Filipino employees expect their employers to take care of this, but it can be quite
confusing for employers.

A common solution is to outsource payroll management to a professional service

provider like Emerhub. Our payroll experts can take care of computing mandatory
benefits and taxes. We handle payment to relevant government institutions.

Computing Taxable Income for Payroll in the

Philippines
Taxable income is the employee’s gross income after making relevant salary
adjustments.

The basic formula for calculating taxable income is:

Taxable Income = (Basic Salary + Additional Pay) – Deductions

Additional pay can refer to additional income because of holiday pay or overtime and
night shift differential rates. Deductions include mandatory government contributions
and salary deductions due to attendance or internal policies. We discuss these in further
detail below.

Holiday Pay in the Philippines

Employees asked to work on a public holiday must receive holiday pay. Holiday pay is
the employee’s daily rate adjusted by the holiday rate. Holiday rates depend on whether
it is a regular holiday or a special non-working holiday.

Holiday Pay Rates

Type of Holiday Special Hourly Rate

Regular Holiday 200% of the basic daily rate

Special Non-working Holiday 130% of the basic daily rate

Employees not asked to work on a regular holiday will still receive their basic daily rate.
On the other hand, the “No Work, No Pay” principle applies to special holidays.
Therefore, employees not asked to report on a special holiday are not eligible for any
sort of compensation. However, you are free to give employees their basic daily rate
even if they did work on a special holiday.

Holidays in the Philippines

Regular Holidays

2020 2021

New Year’s Day January 1 January 1

Araw ng April 9 April 9

Kagitingan

Maundy Thursday April 9 April 1

Good Friday April 10 April 2

Labor Day May 1 May 1

 2020 2021

Independence June 12 June 12

Day

Eid’l Fitr May 25 May 13

Eid’l Adha Not officially declared yet by the Not officially declared yet by the
Philippine Government Philippine Government

National Heroes August 31 August 30

Day

Bonifacio Day November 30 November 30

Christmas Day December 25 December 25

Rizal Day December 30 December 30

Special Holidays

2020 2021

Lunar New Year January 25 February 12

EDSA People Power Revolution Anniversary February 25 February 25

Black Saturday April 11 April 3

Ninoy Aquino Day August 21 August 21

All Saints’ Day November 1 November 1

 2020 2021

Day after All Saints’ Day* November 2 November 2

Feast of the Immaculate Conception of Mary December 8 December 8

Christmas Eve* December 24 December 24

Last Day of the Year December 31 December 31

* Listed officially as “Additional special (non-working) day in the Philippines’ Official

Gazette

Overtime Pay and Night Shift Differential in the Philippines

Working hours in the Philippines cannot exceed eight hours in a day, not including the
mandatory one-hour lunch break. If your employee works beyond eight hours, you must
pay overtime wages.

Employers must also take note of the night shift differential rate. The night shift
differential rate applies to employees working at any point between 10:00 pm and 6:00
am.

Both the overtime and night shift differential rates apply to the employee’s hourly rate.

Overtime and Night Shift Differential Rates

Type of overtime Hourly rate

Overtime – Normal Working Day 125%

Overtime – Rest Day 130%

Night Shift Differential Rate 110%

 If an employee entitled to these rates works on a holiday, you must stack rate
adjustments.

Salary Deductions in the Philippines

If your employee comes in late or leaves work early, you can make deductions to his or
her salary. You can also deduct from your employee’s salary if he or she takes unpaid
leaves.

In addition to that, you can also deduct from your employees’ salaries if you have
relevant company-specific policies. These may include car or housing loans from the
company, healthcare plans, or other dues.

Mandatory Contributions in the Philippines

In the Philippines, employees make mandatory government contributions of which
employers also pay a share.

 Social Security System (SSS). Contributions made to the SSS depend on the

employee’s salary. However, there is a fixed ceiling amount for employees with a monthly salary
of PHP 20,000 or more. Employers also pay a share for the employee’s SSS contributions.
 Philippine Health Insurance Corporation (PhilHealth). PhilHealth provides a national
health insurance program in the Philippines. PhilHealth contribution is 3% of the employee’s
salary each month. The employee and employer pay an equal share for PhilHealth.
 Home Development Mutual Fund (Pag-IBIG). The Pag-IBIG fund is responsible for a
national savings program and also offers loans and housing programs. The employer and
employee each pay a fixed amount of PHP 100 per month for PAG-IBIG.

How to Compute Taxes for Payroll in the Philippines

The higher the employee’s taxable income, the higher the tax rate. Note, however, that
employees with annual wages totaling PHP 250,000 or less are tax-exempt. Employers
typically deduct taxes from employees on a monthly or semi-monthly basis.

The table below details income tax rates in the Philippines:

Annual Taxable Income Tax Rate

 Up to 250,000 0%

Over 250,000 – up to 400,000 20% of the excess over 250,000

Over 400,000 – up to 800,00 PHP 30,000 + 25% of the excess over PHP 400,000

Over 800,000 – up to 2,000,000 PHP 130,000 + 30% of the excess over PHP 800,000

Over 2,000,000 – up to 8,000,00 PHP 490,000 + 32% in excess over PHP 2,000,000

De Minimis Benefits in the Philippines

De minimis benefits refer to additional compensation of small value given by the
employer apart from the basic salary. These benefits are non-taxable.

De minimis benefits in the Philippines include:

 Meal allowance during overtime work. Up to 25% of the basic minimum wage
 Unused leave credits converted to cash. Maximum of 10 days per year
 Rice subsidy. Up to PHP 1,500 (approx. USD 30) per year
 Medical cash allowance. Up to PHP 750 (approx. USD 15) per semester or PHP 125
(approx USD 2.50) per month
 Uniform and clothing allowance. Up to PHP 5,000 (approx. USD 100) per year
 Laundry allowance. Up to PHP 300 (approx. USD 6) per month
 Medical benefits. Up to PHP 10,000 (approx. USD 200) per year
 Gifts. This applies to gifts given for Christmas, festivals, or special circumstances in the
employee’s life such as marriage or a death in the family. Up to PHP 5,000 (approx. USD 100) per
year
 Employee achievement awards. These can be in forms other than cash or gift vouchers.
Up to PHP 10,000 (approx. USD 200) per year.

It might be tempting to come up with a pay structure that maximizes the de

minimis benefits in order to reduce the amount of taxes paid. To some extent it is
reasonable, however, also take into account the amount of time that goes into
calculating and reporting the benefits compared to the saved costs.
Emerhub’s payroll consultants will advise you on how to structure the salaries.

13th Month Pay

Employees who have worked in the company for at least one month must receive 13th-
month pay. Employees must receive their 13th-month pay no later than the 24th of
December each year. 13th-month pay amounting to PHP 90,000 or less is non-taxable.

The 13th-month pay is the employee’s total basic salary for the year divided by 12. If the
employee has been with your company for less than a year, he or she must receive a
prorated amount relevant to his or her period of employment. The prorated amount
also applies to employees leaving the company before the end of the year.

Note that job applicants usually don’t include the 13th salary into their salary
expectations – they assume it’s on top of whatever amount they agreed to be paid.

How to Compute Your Pag-IBIG Contribution: A Complete Guide to

Contribution Table and Payment
Did you know that the Pag-IBIG contribution deducted from your monthly salary will go
a long way for your future?

You won’t realize—much less appreciate—the value of your contributions until you get a
Pag-IBIG loan or withdraw your funds when you retire. In short, paying your Pag-IBIG
contributions is saving money for your future.

Keep reading to understand the Pag-IBIG savings in detail, including the contribution
table for every member category, how much you should contribute, how to make a
payment, and the different ways to check your contribution.

 What is Pag-IBIG Savings I?

Pag-IBIG Savings I, also called Provident Savings, is a regular savings program for all
members of the Pag-IBIG Fund or Home Development Mutual Fund (HDMF).

For employees, this involves a salary deduction for Pag-IBIG contribution with their
employer’s share of contribution. 

For other types of Pag-IBIG members (i.e., self-employed, OFW, etc.), this involves
paying out of pocket for their contribution.
Every contribution payment is saved in the HDMF under the member’s name. It earns
dividends yearly (i.e., 6.91% in 2018), so the savings grow over time. 

Who can pay Pag-IBIG contribution?

Anyone who is registered with the HDMF and has a Pag-IBIG MID number or
registration tracking number (RTN) can contribute.

Paying your first contribution makes your Pag-IBIG membership official. Your

membership starts on the date of your first payment as reflected on your Pag-IBIG Fund
receipt. 

Where do your contributions go?

The Pag-IBIG Fund uses the contributions collected from members to provide short-
term and housing loans. You can also enjoy the same benefits as a Pag-IBIG member
when you need to borrow money for a personal need or a home purchase. 

Why pay your contribution regularly?

There’s no penalty when you skip paying a monthly Pag-IBIG contribution. However,
inconsistent payments can affect your Pag-IBIG loan approval and the amount you can
borrow.

To qualify for any Pag-IBIG loan, members must have paid at least 24 monthly
contributions. 

There are additional eligibility requirements depending on the type of loan you’re
applying for.

Members who want to get a Pag-IBIG multi-purpose loan must have paid at least
one monthly contribution for the last six months from the loan application date.

The amount you can loan also depends on the total contributions you’ve paid so far.
Usually, the Pag-IBIG loan amount is 80% of the borrower’s total remitted Pag-
IBIG contributions. If you have gaps in your monthly contribution payments, you’re
likely to get approved for a lower amount.

How to compute your Pag-IBIG contribution.

“How much should I contribute to Pag-IBIG?” 

If you’re wondering how much the minimum monthly savings is, find the applicable Pag-
IBIG contribution table below based on your present employment (or non-employment)
status.

1. Pag-IBIG contribution table in 2021 for employees and employers.

 Monthly Salary Employee's Contribution Rate Employer's Contribution Rate Total

At least Php 1,000 to Php 1,500 1% 2% 3%

Over Php 1,500 2% 2% 4%

Pag-IBIG contributions of employed members are shared by employees and their

employers.

The employee’s share of contribution is deducted from the monthly salary. In

addition, employers pay their share of contribution for every employee—this
amount must never be deducted from their worker’s salary.

Employees earning less than Php 1,500 monthly contribute 1% of their basic salary,
while their employers contribute 2%.

Those earning more than Php 1,500 monthly contribute 2% of their basic salary, while
their employers contribute 2%.

To compute how much you have to pay as an employee or employer, use the Pag-IBIG
contribution table above and this formula: 

Pag-IBIG contribution = Monthly Basic Salary x Employee’s or Employer’s Contribution

Rate

Sample computation for a worker with Php 3,000 monthly basic salary:

 Employee’s share: Php 3,000 x 0.02 = Php 60

 Employer’s share: Php 3,000 x 0.02 = Php 60
The employee’s monthly salary deduction for Pag-IBIG contribution is Php 60. The
employer adds Php 60, for a total of Php 120 monthly savings.

Sample computation for a worker with at least Php 5,000 monthly basic salary:

The maximum monthly salary used for Pag-IBIG contribution computation is Php 5,000.
This means if your monthly salary is Php 5,000 or higher, your contribution is computed
as follows:

 Employee’s share: Php 5,000 x 0.02 = Php 100

 Employer’s share: Php 5,000 x 0.02 = Php 100
Regardless of your monthly salary and how much it will increase in the future—as long
as it’s equal to or above Php 5,000—your salary deduction for monthly Pag-IBIG
contribution will always be Php 100. Your employer is required to remit that amount plus
the employer counterpart contribution worth Php 100. Your total monthly savings as a
Pag-IBIG member is Php 200.

2. Pag-IBIG contribution table in 2021 for self-employed members.

Monthly Income Contribution Rate

At least Php 1,000 to Php 1,500 1%

Over Php 1,500 2%

Self-earning members (entrepreneurs, freelancers, TNVS/PUV drivers, market vendors,

etc.) shoulder their full monthly Pag-IBIG contribution.

Use the Pag-IBIG contribution table above and formula below to compute how much
you’ll pay as monthly savings to Pag-IBIG:

Pag-IBIG contribution = Monthly Income x Contribution Rate

Sample computation for a self-employed member with Php 1,500 monthly income:

Php 1,500 x 0.01 = Php 15

Sample computation for self-employed members with at least Php 5,000 monthly
income:

Php 5,000 x 0.02 = Php 100

The Pag-IBIG Fund uses Php 5,000 as the maximum income for computing a self-
employed member’s contribution. This means regardless of how much you earn—as
long as it’s equal to or higher than Php 5,000—you should pay only at least Php 100
monthly.

However, you may opt to pay an additional Php 100 (for a total monthly savings of Php
200) or higher, especially if you plan to get a Pag-IBIG housing loan in the future.

3. Pag-IBIG contribution table in 2021 for OFWs.

 a. For OFWs whose employers are subject to mandatory Pag-IBIG coverage.
Monthly Salary OFW's Contribution Rate Foreign Employer's Contribution Rate Total

Php 1,500 and below 1% 2% 3%

Over Php 1,500 2% 2% 4%

Use the table above for computing your monthly savings if your overseas employer is
required to share in paying your Pag-IBIG contribution.

Sample computation for OFWs earning at least Php 5,000 monthly:

Because the maximum monthly income that Pag-IBIG uses for computation is Php
5,000, your contribution is calculated this way:

 OFW’s share: Php 5,000 x 0.02 = Php 100

 Foreign employer’s share: Php 5,000 x 0.02 = Php 100
This means you and your employer should contribute at least Php 100 each. Your total
monthly savings is Php 200.

b. For OFWs whose employers are exempted from Pag-IBIG coverage.

Monthly Salary Contribution Rate

Over Php 1,500 2%

If your overseas employer is not subject to mandatory Pag-IBIG coverage, then you’re
required to contribute 2% of your monthly salary. With Php 5,000 as the maximum
monthly income used for computing Pag-IBIG contribution, you must pay at least Php
100 monthly contribution. 

You may choose to pay the employer counterpart of 2% (Php 100), for a total of Php
200 monthly savings, especially if you’ll avail of a Pag-IBIG housing loan in the future.

4. Pag-IBIG contribution table in 2021 for a non-working spouse.

50% of Working Spouse's Monthly Salary Pag-IBIG Contribution Rate

Php 1,500 and below 1%

 50% of Working Spouse's Monthly Salary Pag-IBIG Contribution Rate

Over Php 1,500 2%

Computing the Pag-IBIG contribution of a non-working-spouse member is based on half

of the employed spouse’s monthly salary. 

For example, a full-time housewife whose husband earns Php 4,000 per month
contributes Php 40 monthly. Here’s how to compute it:

(Php 4,000 / 2) x 0.02 = Php 40

The non-working spouse’s contribution rate is 2% because 50% of her working spouse’s
salary is Php 2,000, which falls in the salary range of over Php 1,500.

5. Pag-IBIG contribution table in 2021 for kasambahays.

Monthly Salary Employer's Contribution Rate Kasambahay's Contribution Rate Total

Less than Php 1,500 3% 0% 3%

Php 1,500 to Php 4,999 4% 0% 4%

Php 5,000 and above 2% 2% 4%

Household employers must shoulder the full contribution of their kasambahays with a
monthly salary of less than Php 5,000. Employers should contribute 3% of their worker’s
salary if it’s less than Php 1,500 or 4% if the salary is in the Php 1,500 to Php 4,999
range.

Sample computation for a kasambahay earning Php 3,000 monthly:

 Employer’s share: Php 3,000 x 0.04 = Php 120

 Kasambahay’s share: None
Kasambahays earning Php 5,000 or higher are required to pay the 2% employee’s
share through salary deduction. Their employer should also add 2% of their monthly
salary to their total monthly contribution.
Sample computation for a kasambahay earning at least Php 5,000 monthly:

 Employer’s share: Php 5,000 x 0.02 = Php 100

 Kasambahay’s share: Php 5,000 x 0.02 = Php 100
This means kasambahays earning Php 5,000 and above have a total Pag-IBIG monthly
savings of Php 200.

Why increase your monthly contribution?

You can contribute an amount that’s higher than the minimum required by the
Pag-IBIG Fund. Not only will it increase your savings; it will also help you qualify
for higher Pag-IBIG loan amounts.

This is especially helpful when you’re applying for a Pag-IBIG housing loan. The amount
of Pag-IBIG contributions you’ve paid will be used as a basis for computing how much
you can borrow.

The higher the amount you contribute, the higher the loan amount you’re entitled to.

Increasing your monthly Pag-IBIG savings is a wise long-term strategy, especially when
you get a raise or earn extra income. The HDMF has been performing well financially,
which is an indication of how it manages its members’ money.

How to upgrade your Pag-IBIG contribution.

For employees: Inform your HR department or employer that you want to pay a higher
monthly Pag-IBIG contribution. You’ll be asked to sign a form for the monthly savings
increase. Your employer may either match the increased contribution or contribute only
the amount it’s currently remitting.

For individually paying members: No need to submit anything. Simply pay the higher
monthly savings. Your payment will be credited automatically to your total Pag-IBIG
savings. 

Withholding Tax
CODAL REFERENCE AND RELATED ISSUANCES

Republic Act Nos. 8424, 9337, 9442, 9504, 10963

Sections 57 to 58 and 78 to 83 of the National Internal Revenue Code (NIRC)

Revenue Regulation Nos. 2-98, 17-2003, 30-2003, 10-2008, 11-2018

Revenue Memorandum Circular Nos. 72-2004, 91-2010, 50-2018, 51-2018

IMPORTANCE OF WITHHOLDING TAX SYSTEM

It is considered as an effective tool in the collection of taxes for the following reasons:

 It encourages voluntary compliance;

 It reduces cost of collection effort;
 It prevents delinquencies and revenue loss; and
 It prevents dry spell in the fiscal conditions of the government by providing revenues throughout
the taxable year.

 PERSONS REQUIRED TO WITHHOLD WITHHOLDING TAXES

 Individuals engaged in business or practiced of profession

 Non-individuals (corporations, associations, partnertship, cooperatives) whether engaged in
business or not
 Government agencies and its instrumentalities (National Government Agentcies (NGAs),
Government-owned or Controlled Corporations (GOCCs), Local Government Units including
Baranggays (LGUs

A WITHHOLDING AGENT - is any person or entity who is in control of the payment subject
to withholding tax and therefore is required to deduct and remit taxes withheld to the
government.

CLASSIFICATION OF WITHHOLDING TAXES

 Creditable withholding tax   

a. Compensation - is the tax withheld from income payments to individuals arising from an
employer-employee relationship.
b. Expanded - is a kind of withholding tax which is prescribed on certain income payments and is
creditable against the income tax due of the payee for the taxable quarter/year in which the
particular income was earned.
c. Withholding Tax on GMP - Value Added Taxes (GVAT) - is the tax withheld by National
Government Agencies (NGAs) and instrumentalities, including government-owned and
controlled corporations (GOCCs) and local government units (LGUs), before making any
payments to VAT registered taxpayers/suppliers/payees on account of their purchases of goods
and services.
d. Withholding Tax on Government Money Payments (GMP) - Percentage Taxes - is the tax
withheld by National Government Agencies (NGAs) and  instrumentalities, including
government-owned and controlled corporations (GOCCs) and local government units (LGUs),
before making any payments to non-VAT registered taxpayers/suppliers/payees
 Final Withholding Tax is a kind of withholding tax which is prescribed on certain income
payments and is not creditable against the income tax due of the payee on other income subject to
regular rates of tax for the taxable year. Income Tax withheld constitutes the full and final
payment of the Income Tax due from the payee on the particular income subjected to final
withholding tax.
WITHHOLDING TAX ON COMPENSATION

Compensation or Wages - refers to all remuneration for services performed by an employee for
his employer under an employee-employer relationships unless exempted by the NIRC and
pertinent laws.

KINDS OF COMPENSATION

 Regular
a. Basic Salary
b. Fixed allowances
 Supplmentary
a. Commission
b. Overtime pay
c. Fees, including directors fees
d. Profit sharing
e. Monetized vacation leave in excess of ten (10) days
f. Sick leave
g. Fringe benefits received by rank and file employees
h. Hazard pay
i. Taxable 13th month pay and other benefits
j. Other remuneration received from an employee-employer relationships

RESPONSIBILITIES OF THE EMPLOYER

 Submit the duly accomplished BIR Form Nos. 1902 and/or 1905 to the RDO within thirty (30)
days from receipt;
 Withhold the tax due from the employees following the prescribed manner;
 Remit the amount of tax withheld from the employee within the prescribed due dates;
 Do the year-end adjustment;
 Submit Annual Information return (BIR Form 1604-C, 1604-F and 1604-E), including the
required alphabetical list of employees/payees on or before January 31 following the close of the
calendar year;
 Issue the Certificate of Compensation Payment/Tax Withheld (BIR Form No. 2316) to the
employees; and
 Refund excess tax withheld.

EXEMPTIONS AND EXCLUSIONS FROM GROSS INCOME

a. Remuneration received as an incident of employment (RA 7641; those with approved reasonable
private retirement plan; Social Security Act of 1954, as amended; GSIS Act of 1937, as amended;
and etc.
b. Remuneration paid for agricultural labor;
c. Remuneration for domestic services;
d. Remuneration for casual labor not in the course of an employer's trade or business;
e. Compensation for services by a citizen or a resident of the Philippines for a foreign government
or international organization;
 f. Damages (Actual, moral, exemplary and nominal);
g. Life insurance;
h. Amounts received by the insured as a return of premium;
i. Compensation for injuries or sickness;
j. Income exempt under treaty
k. 13th Month pay and other benefits
l. GSIS, SSS, Medicare and other contributions (employee's share only)
m. Compensation income of minimum wage earners (MWEs) who work in the private sector and
being paid the Statutory Minimum Wage (SMW), as fixed by the Regional Tripartite Wage and
Productivity Board (RTWPB)/National Wages Productivity Commission (NWPC), applicable to
the place where he/she is assigned;
n.  Compensation income of employees in the public sector with compensation income of not more
the the SMW in the non-agricultural sector as fixed by the RTWPB?NWPC applicable to the
place where he/she is assigned.
o. De Minimis benefits
p. Fringe benefits given to employees other than rank and file and subjected to Fringe Benefit Tax
(FBT);
q. Personnel Economic Relief Allowance (PERA) given to government employees; and
Representation and transportation allowance (RATA granted to public officers and employees
under the General Appropriations Act.

MINIMUM WAGE EARNERS

No withholding tax shall be required on the Statutory Minimum Wage (SMW) of the Minimum
Wage earner in the private/public sectors as defined in RR 2-98, as amended by RR 11-2018,
including:

 Holiday pay
 Overtime pay
 Night shift differential
 Hazard pay

of Minimum Wage earners in the private/public sectors as defined by these Regulations.

DE MINIMIS BENEFITS NOT SUBJECT TO WITHHOLDING TAX

a. Monetized unused vacation leave credits to employees not exceeding ten (10) days during the
year;
b. Monetized value of vacation and sick leave credits paid to government officials and employees;
c. Medical cash allowance to dependents of employees, not exceeding P1,500 per employee per
semester of P250 per month;
d. Rice subsidy of P2,000 or one sack of 50kg rice per month amounting to not more than P2,000;
e. Uniform and clothing allowance not exceeding P6,000 per annum;
f. Actual medical assistance, e.g. medical allowance to cover medical and healthcare needs, annual
medical/executive check-up, maternity assistance, and routine consultations, not exceeding
P10,000.00 per annum;
g. Laundry allowance not exceeding P300 per month;
 h. Employees achievement awards, e.g. for length of service or safety achievement, which in the
form of a tangible personal property other than cash or gift certificate, with an annual monetary
value not exceeding P10,000 received by the employee under an established written plan which
does not discriminate in favor of highly paid employees;
i. Gifts given during Christmas and major anniversary celebrations not exceeding P5,000 per
employee per annum;
j. Daily meal allowance for overtime work not exceeding twenty five percent (25%) of the basic
minimum wage;
k. Benefits received by an employee by virtue of a collective bargaining agreement (CBA) and
productivity incentive schemes provided that the total annual monetary value received from both
CBA and productivity incentive schemes combined do not exceed ten thousand pesos (Php
10,000.00)per employee per taxable year;

 WITHHOLDING TAX TABLE

 REVISED WITHHOLDING TAX TABLE

Effective January 1, 2018 to December 31, 2022 

DAILY 1 2 3 4 5 6

Compensation P685 and

P685 -P1,095 P1,096 - P2,191 P2,192 - P5,478 P5,479 - P21,917 P21,918 and above
Range  below

Prescribed 0.00 +20% P82.19 +25% P356.16 +30% P1,342.47 +32% P6,602.74 +35% over
0.00
Withholding Tax over P685 over P1,096 over P2,192 over P5,479 P21,918

WEEKLY 1 2 3 4 5 6

Compensation P4,808 and P4,808 -

P7,692 - P15,384 P15,385 - P38,461 P38,462 - P153,845 P153,846 and above
Range below P7,691

Prescribed 0.00 +20% P576.92 +25% P2,500.00 +30% P9,423.08 +32% P46,346.15 +35%
0.00
Withholding Tax over P4,808 over p7,692 over p15,385 over P38,462 over P153,846

SEMI-MONTHLY 1 2 3 4 5 6

Compensation P10,417 P10,417 - P16,667 -

P33,333 - P83,332 P83,333 - P333,332 P333,333 and above
Range and below P16,666 P33,332

Prescribed 0.00 +20% P1,250.00 +25% P5,416.67 +30% P20,416.67 +32% P100,416.67 +35%
0.00
Withholding Tax over P10,417 over P16,667 over P33,333 over P83,333 over P333,333

MONTHLY 1 2 3 4 5 6

Compensation P20,833 P20,833 - P33,333 - P66,667 - P166,667 -

P666,667 and above
Range and below P33,332 P66,666 P166,666 P666,666

Prescribed 0.00 +20% P2,500.00 +25% P10,833.33 +30% P40,833.33 +32% P200,833.33 +35%
0.00
Withholding Tax over P20,833 over 33,333 over P66,667 over P166,667 over P666,667  

 REVISED WITHHOLDING TAX TABLE

Effective January 1, 2023 and onwards

DAILY 1 2 3 4 5 6

Compensation P685 and

P685 -P1,095 P1,096 - P2,191 P2,192 - P5,478 P5,479 - P21,917 P21,918 and above
Range  below

Prescribed 0.00 +15% P82.19 +20% P356.16 +25% P1,342.47 +30% P6,602.74 +35% over
0.00
Withholding Tax over P685 over P1,096 over P2,192 over P5,479 P21,918

WEEKLY 1 2 3 4 5 6

Compensation P4,808 and P4,808 -

P7,692 - P15,384 P15,385 - P38,461 P38,462 - P153,845 P153,846 and above
Range below P7,691

Prescribed 0.00 +15% P576.92 +20% P2,500.00 +25% P9,423.08 +30% P46,346.15 +35%
0.00
Withholding Tax over P4,808 over p7,692 over p15,385 over P38,462 over P153,846

SEMI-MONTHLY 1 2 3 4 5 6

Compensation P10,417 P10,417 - P16,667 -

P33,333 - P83,332 P83,333 - P333,332 P333,333 and above
Range and below P16,666 P33,332

Prescribed 0.00 +15% P1,250.00 +20% P5,416.67 +25% P20,416.67 +30% P100,416.67 +35%
0.00
Withholding Tax over P10,417 over P16,667 over P33,333 over P83,333 over P333,333

MONTHLY 1 2 3 4 5 6

Compensation P20,833 P20,833 - P33,333 - P66,667 - P166,667 -

P666,667 and above
Range and below P33,332 P66,666 P166,666 P666,666

Prescribed 0.00 +15% P2,500.00 +20% P10,833.33 +25% P40,833.33 +30% P200,833.33 +35%
0.00
Withholding Tax over P20,833 over 33,333 over P66,667 over P166,667 over P666,667