Introducing the new Tax Table for 2018

With the new Tax Reform Program for 2018, a new set of tax tables will take effect starting on January 1, 2018. With the new tax tables, it is expected that the withholding tax for most employees will be lowered.

Also,with the new Tax Table, the taxable payroll amount has been increased. Those who are earning P20,833 or below per month are not subject to compensation tax. This means an increased take-home pay for a lot of employees.

Once you exceed P20,833, your tax due is 20% of the excess over P20,833.

The next bracket is at P33,333 monthly, where the tax due is 25% of the excess over P33,333, plus P2,500.00.

Once your payroll hits P66,667 per month, your tax rate becomes 30% of the excess over P66,667, plus P10,833.33.

If your payroll reaches P166,667 monthly, your tax rate becomes 32% of the excess over P166,667, plus P40,833.33.

Then if your payroll reaches P666,667 monthly, your tax becomes 35% of the excess over P666,667, plus P200,833.33. This is already the highest bracket.

Another observation is that the tax for all will be the same, regardless of your status (Single or Married) or the number of dependents that you have.

Also, the tax-exempt limit for benefits (such as 13th month pay and other bonuses) has been increased from P82,000 to P90,000.

Some sample tax computations:

If your monthly taxable income is P25,000, your monthly tax will be (P25,000 – P20,833) x 0.2 = P833.40 per month.

If your monthly taxable income is P35,000, your monthly tax will be (P35,000 – P33,333) x 0.25 + P2,500 = P2, 916.75

If your monthly taxable income is P75,000, your monthly tax will be (P75,000 – P66,667) x 0.30 + P10, 833.33 = P13, 333.23

If your monthly taxable income is P200,000, your monthly tax will be (P200,000 – P166,667) x 0.32 + P40,833.33 = P51, 499.89

If your monthly taxable income is P750,000, your monthly tax will be (P750,000 – P666,667) x 0.35 + P200,833.33 = P229, 999.88.

Here is the new tax table for 2018:

You may also download the PDF here:

revised Wht table 14863