UP JFA
- Apr 25
- 6 min read

Income Tax Tables in the Philippines (2022)

Updated: Apr 28

The Philippines’ new tax reform bill, known as TRAIN or Tax Reform for Acceleration and Inclusion, was signed into law on December 19, 2017 and its implementation began on January 1, 2018.

What are the new income tax rates under the TRAIN law? How will TRAIN affect income taxes of individuals and corporations? How is the TRAIN tax system different from the previous Philippine tax system?

In this article, we focus on these items. Below you’ll find the new TRAIN Income Tax Tables adopted by the Bureau of Internal Revenue (BIR) with sample computations showing how income taxes will be determined under TRAIN.

First off, take note that in the new TRAIN tax law, there are two (2) sets of income tax tables to be implemented:

(1) Income Tax Tables that will be used from 2018 to 2022; and

(2) Income Tax Tables that will be used from year 2023 onwards.

NOTE: We compiled all articles related to the TRAIN law on this page: TRAIN Tax Law, Sample Computations, and BIR Implementing Guidelines. Click the link to access relevant information, such as the following useful articles on Philippine taxation.

New Income Tax Rates under TRAIN (2018-2022)

Here are highlights of the first part of the approved TRAIN tax reform law to be implemented from the year 2018 until the year 2022:

Those earning an annual salary of P250,000 or below will no longer pay income tax (zero income tax).
Those earning between P250,000 and P400,000 per year will be charged an income tax rate of 20% on the excess over P250,000.
Those earning annual incomes between P400,000 and P800,000 will pay a fixed amount of P30,000 plus 25% of the excess over P400,000.
Those with yearly salaries between P800,000 and P2 million will be charged a fixed amount of P130,000 plus 30% on the excess over P800,000.
High-income earners receiving salaries between P2 million and P8 million annually will pay a fixed amount of P490,000 plus 32% of the excess over P2 million.
Finally, the highest income tier receiving salaries of at least P8 million per year will have withholding taxes of P2.41 million plus 35% of the excess over P8 million.

The new TRAIN tax rates are as follows. Again, these rates will govern income taxes to be paid from 2018 until 2022.

Beginning 2023, however, there will be new income tax rates that are actually lower than those implemented from 2018 to 2022.

BIR Income Tax Rates under TRAIN (2023 onwards)

From year 2023 onwards, the income tax rates will be further adjusted, that is, they will actually be lower, shown as follows:

Those earning annual salary of P250,000 or below will continue to be exempted from paying income tax.
Those earning between P250,000 and P400,000 per year will be charged a lower income tax rate of 15% on the excess over P250,000.
Those with annual salaries from P400,000 to P800,000 will have withholding taxes of P22,500 plus 20% of the excess over P400,000.
Salaried employees with annual incomes between P800,000 and P2 million will be charged a fixed amount of P102,500 plus 25% on the excess over P800,000.
Those receiving salaries between P2 million and P8 million per year will be charged P402,500 plus 30% of the excess over P2 million.
Finally, the highest income segment of employees with annual salaries of at least P8 million will pay P2.2025 million plus 35% of the excess over P8 million.

The new income tax rates from year 2023 onwards, as per the TRAIN law, are as follows.

New TRAIN Income Tax Rates vs. Old Income Tax Rates

What changed in the new TRAIN tax law versus the old income tax law?

Prior to the approval of the TRAIN bill in 2018, the following tax tables were in use until the end of 2017. The income tax rates before TRAIN, which are relatively higher than the post-TRAIN tax rates, are shown below.

Here are major items that changed when we compare the old (pre-TRAIN) tax tables versus the new TRAIN income tax tables.

income brackets were streamlined and reduced to just six (6) from seven (7) brackets;
taxable income threshold per bracket has been adjusted upwards;
tax rate charged on each taxable income bracket was revised, mostly lowered;
annual gross income eligible for tax exemption has been adjusted upwards from the amount of minimum wage previously to P250,000 in the new tax tables; and
personal exemption (P50,000) and additional exemptions (maximum of P100,000, if taxpayer has four dependents) were removed.

Under the TRAIN law, salaried individuals earning annual gross compensation of P250,000 or below are now exempted from paying income taxes. This is a drastic change from the past, wherein only minimum wage earners were exempted.

What happened to personal and additional exemptions in the new TRAIN Income Tax law? The new TRAIN tax law removed these monetary exemptions previously enjoyed under the old Philippine tax system.

The Personal Exemption, amounting to P50,000, and additional exemption of P25,000 per qualified dependent (maximum of P100,000 additional exemptions for a taxpayer with four (4) dependents) are now gone under the TRAIN law.

Sample Income Tax Computations under TRAIN (2018 to 2022)

How to compute income taxes under the new TRAIN law?

The Bureau of Internal Revenue (BIR) explained this in Revenue Regulation No. 8-2018 (RR 2018) which the BIR released in 2018. The formula to follow is simple. The formula to compute income tax due, under the graduated income tax rates of TRAIN, is:

INCOME TAX DUE = a + (b x c)

where: a = Basic Amount of Annual Income;

b = Additional Rate; and

c = Of the Excess over

To recap, here’s the graduated income tax tables under TRAIN to be implemented from 2018 until 2022.

The income tax payable can be computed as follows:

So, for example, an employee with taxable income of P300,000 per year, will fall under the income bracket P250,000-P400,000. The income tax due is as follows:

a = Basic Amount of Annual Income = Zero (0)
b = Additional Rate = 20%
c = Of the Excess over P250,000 = P50,000
INCOME TAX DUE = 0 + (20% * P50,000) = P10,00

Thus, an employee earning taxable income of P300,000 per year will pay income tax amounting to P10,000 under TRAIN.

With tax due of P10,000 on annual income of P300,000, the effective income tax rate charged to this taxpayer is only 3.33%.

How about someone making P1 Million a year? What’s the income tax payable? Same formula to use.

Using the table above, we can see that the taxpayer falls under the tax bracket P800,000-P2,000,000. Thus, the tax due is:

a = Basic Amount of Annual Income = P130,000
b = Additional Rate = 30%
c = Of the Excess over P800,000 = P200,000
INCOME TAX DUE = P130,000 + (30% * P200,000) = P190,000

The salaried employee earning P1 Million will thus pay income tax of P190,000 under the new TRAIN tax tables.

Paying P190,000 income tax on taxable income of P1 Million, the taxpayer is therefore charged an effective income tax rate of 19%.

Sample Income Tax Computations under TRAIN (2023 Onwards)

Take note that part 2 of the TRAIN tax rates will take effect beginning year 2023.

The formula to follow, though, is still the same:

INCOME TAX DUE = a + (b x c)

where: a = Basic Amount of Annual Income;

b = Additional Rate; and

c = Of the Excess over

So in the year 2023, an employee earning P300,000 annual salary will be paying income tax of:

a = Basic Amount of Annual Income = Zero (0)
b = Additional Rate = 15%
c = Of the Excess over P250,000 = P50,000
INCOME TAX DUE = 0 + (15% * P50,000) = P7,500

You’ll notice that the tax due of P7,500 is much lower than the income tax due of P10,000 during the implementation of TRAIN in 2018 to 2022. This is because the TRAIN law further reduced income tax rates from 2023 onwards.

Previously, the effective income tax rate charged to this taxpayer was 3.33%. From 2023 onwards, the new effective income tax rate, paying P7,500 income tax on P300,000 annual income, is down to just 2.5%.

How about the employee making P1 Million a year? From 2018 to 2022, that employee paid income tax in the amount of P190,000 during the implementation of TRAIN.

Using the new graduated income tax tables for 2023 onwards, the new income tax payable is as follows:

a = Basic Amount of Annual Income = P102,500
b = Additional Rate = 25%
c = Of the Excess over P800,000 = P200,000
INCOME TAX DUE = P102,500 + (25% * P200,000) = P152,500

Paying P152,500 income tax on P1 Million annual salary, this taxpayer is paying an effective income tax rate of 15.25%, lower than the 19% effective income tax rate during the implementation of TRAIN in 2018 to 2022.

Now you know how to compute your own income tax under TRAIN! Good job!

About the Author:

James Ryan Jonas teaches business strategy, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.1 Billion ($56 Million) worth of retirement funds on behalf of thousands of UP employees.