Payroll management in the Philippines relies heavily on the BIR tax table, which determines how employee income is taxed and reported. This table serves as a key reference for accurate salary calculations and compliance with Bureau of Internal Revenue regulations.
For HR teams, accountants, and business owners, understanding the BIR tax table is essential for applying the correct withholding tax rates. It also requires awareness of tax frameworks such as the TRAIN Law, which continues to shape payroll taxation. As tax regulations change, businesses must follow updated BIR guidelines — for example, BIR Revenue Regulation No. 5 updates withholding tax rates under the National Internal Revenue Code.
Conclusion
Understanding the BIR tax table and mandatory employee contributions is essential for every business operating in the Philippines. Staying current with the TRAIN Law rates — which have been in effect since January 2023 and continue through 2026 — ensures both operational stability and employee trust.
Manual payroll is error-prone and time-consuming, especially as a workforce grows. Automating tax calculations through an integrated payroll system centralises employee data, applies the correct BIR bracket automatically, computes mandatory contributions, and generates the reports your compliance team needs — all in one place. If you are evaluating your options, see our guide to payroll software in the Philippines to understand what features matter most for BIR compliance and scalability.
FAQ of BIR Tax Table
Is there a new BIR tax table for 2026?
No — there are no new rates for 2026. The TRAIN Law (RA 10963) revised withholding tax in two phases: Phase 1 applied from January 2018 to December 2022, and Phase 2 (the current, lower rates) took effect January 2023. There is no Phase 3. The rates in the tables above apply unchanged to 2026 payroll.
What is the TRAIN Law and how does it affect the tax table?
The TRAIN Law (Tax Reform for Acceleration and Inclusion, RA 10963) is the landmark tax reform that revised the personal income tax system in the Philippines. Signed in December 2017, it lowered income tax rates and raised the zero-tax threshold to ₱250,000 annually (₱20,833/month). Its graduated table is now the basis for all BIR withholding tax on compensation.
Is the 13th month pay taxable?
Under the TRAIN Law, the 13th month pay and other bonuses are non-taxable up to a combined maximum of ₱90,000 per year. Any excess is taxable. For example, an employee with a ₱50,000 monthly wage and ₱30,000 bonus (total ₱80,000) has no taxable amount. However, if the bonus increases to ₱50,000, the total becomes ₱100,000, with ₱10,000 being taxable.
What happens if my company applies the wrong tax table?
Using an incorrect or outdated tax table creates two risks. Under-withholding may result in BIR penalties, surcharges, and interest charges against the employer under the NIRC. Over-withholding causes employee dissatisfaction and requires the administrative effort of correcting the error and processing refunds — which can be complex for payroll teams. Using updated payroll software eliminates both risks.
When must withheld taxes be remitted to BIR?
Employers must file BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) and remit the tax on or before the 10th day of the following month (15th day for eFPS filers in certain groups). Non-compliance results in penalties and interest charges from the BIR.
