Withholding Tax is the income tax deducted by the employer to his/her employees and is being paid directly to the government. From the word itself, it means it is being withheld or deducted from the recipient’s income.
The Bureau of Internal Revenue (BIR) has issued Revenue Memorandum Circular (RMC) No. 105-2017 revising the withholding tax table on compensation pursuant to the amendments to the National Internal Revenue Code of 1997 as introduced by Republic Act (RA) 10963, otherwise known as the “Tax Reform for Acceleration and Inclusion (TRAIN) Law.”
How much is the Withholding Tax in the Philippines?
Employees earning P685/day or P20,833/ month are exempted from withholding tax. See the table below.
WITHHOLDING TAX TABLE
| REVISED WITHHOLDING TAX TABLE | ||||||
| Effective January 1, 2018 to December 31, 2022 | ||||||
| DAILY | 1 | 2 | 3 | 4 | 5 | 6 |
| Compensation Range | P685 and below | P685 -P1,095 | P1,096 – P2,191 | P2,192 – P5,478 | P5,479 – P21,917 | P21,918 and above |
| Prescribed Withholding Tax | 0.00 | 0.00 +20% over P685 | P82.19 +25% over P1,096 | P356.16 +30% over P2,192 | P1,342.47 +32% over P5,479 | P6,602.74 +35% over P21,918 |
| WEEKLY | 1 | 2 | 3 | 4 | 5 | 6 |
| Compensation Range | P4,808 and below | P4,808 – P7,691 | P7,692 – P15,384 | P15,385 – P38,461 | P38,462 – P153,845 | P153,846 and above |
| Prescribed Withholding Tax | 0.00 | 0.00 +20% over P4,808 | P576.92 +25% over p7,692 | P2,500.00 +30% over p15,385 | P9,423.08 +32% over P38,462 | P46,346.15 +35% over P153,846 |
| SEMI-MONTHLY | 1 | 2 | 3 | 4 | 5 | 6 |
| Compensation Range | P10,417 and below | P10,417 – P16,666 | P16,667 – P33,332 | P33,333 – P83,332 | P83,333 – P333,332 | P333,333 and above |
| Prescribed Withholding Tax | 0.00 | 0.00 +20% over P10,417 | P1,250.00 +25% over P16,667 | P5,416.67 +30% over P33,333 | P20,416.67 +32% over P83,333 | P100,416.67 +35% over P333,333 |
| MONTHLY | 1 | 2 | 3 | 4 | 5 | 6 |
| Compensation Range | P20,833 and below | P20,833 – P33,332 | P33,333 – P66,666 | P66,667 – P166,666 | P166,667 – P666,666 | P666,667 and above |
| Prescribed Withholding Tax | 0.00 | 0.00 +20% over P20,833 | P2,500.00 +25% over 33,333 | P10,833.33 +30% over P66,667 | P40,833.33 +32% over P166,667 | P200,833.33 +35% over P666,667 |