How does the 2018 Tax Reform affect your taxes? Calculate and find out here!
The country’s proposed tax reform package under the administration of President Rodrigo Duterte aims to bring down the tax liabilities of most taxpayers in the country. Majority of the waged workers who are earning ₱21,000 a month or less will be exempted from tax liabilities, while those who are earning more are subject to a drastically lesser tax liability than in the current tax rule.
This tax calculator will provide a simplified computation of your monthly tax obligation under the new tax reform. Figures shown by the calculator are based on the tax reform’s tax schedule for 2017, 2018, and 2019, including deductible exemptions and contributions.
Statutory contributions such as Philhealth, SSS, GSIS, and Pag-IBIG have their own computation set by the respective agencies and will still be deducted from the employee’s monthly salary.
Taxable income is your total annual income minus all the deductions and tax reliefs you are entitled for. Generally, it’s the amount of income that’s taxable, unless exempted by law. With the new tax reform, middle and low income earners will be exempted from income tax. This is done by raising the minimum taxable income.
Workers earning less than ₱21,000 a month will be exempted, because their salary is less than the lowest tax brackets implemented in the new tax reform.
On the other hand, statutory contributions such as Philhealth, SSS, GSIS, and Pag-IBIG are still in place. The computations are set by the respective agencies and are deducted from the employee’s monthly salary.
These contributions are not affected by the proposed income tax reform, thus the same policies as before apply.
Every year, SSS releases a contribution table to provide a breakdown of how much employers and employee should be paying per month. The monthly contribution of an individual is determined according to the salary range where his or her compensation fall in. This is already predetermined by SSS and the payments are shared by the employer and employee.
|₱1,000.00 and 1,249.99
|₱4,750.00 to ₱5,249.99
|₱9,750.00 to ₱10,249.00
|₱15,750 and above
To see the full table, visit sss.gov.ph
The premiums for employed members, OFWs, self-employed or individually paying members and those members under the sponsored program registered in the Philippine Health Insurance Corporation will be based on the contribution table that they have rolled out early 2017. The contribution will be shared by the employee and the employer in half, and the minimum is ₱200 per month while the maximum is at ₱875 per month.
|₱8,999 and below
|₱20,000 to ₱20,999
|₱35,000 and up
To see the full table, visit philhealth.gov.ph
For government employees, instead of SSS contribution, they have the Government Service Insurance System (GSIS). It is a government-owned agency that provides insurance and benefits to government employees and officials.
For simplicity of the calculator, we did not include this option in the calculator. However, here is how the contribution is calculated for government employees and officials.
|Monthly contribution (percentage of salary)
Further, members of the judiciary and constitutional commissioners shall pay 3% of their monthly compensation as personal share, and their employers a corresponding 3% share for the life insurance coverage.
The current tax system offers reduced taxes or tax relief to individuals who are breadwinners of a household. Currently, the tax exemptions are determined by the number of dependents that an individual has in his household and provide tax exemption to individuals with up to four dependents.
Here are the current exemptions before the implementation of the tax reform:
With the new tax reform, the exemptions enumerated in the current tax rules will be removed. Whether with dependent or not, the imposed tax rates apply for everyone across all income classes.