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Income tax in Philippines 2026
The first PHP 250,000 is tax-free, then five bands run from 15% to 35% above PHP 8 million — with no personal allowances, the zero band does that job.
Who owes what depends on status: resident citizens pay on worldwide income, but resident foreigners and non-residents pay only on Philippine-source income.
At a glance
- top rate
- 35% above PHP 8 million
- entry band
- 0% on the first PHP 250,000, then 15%
- tax year basis
- Calendar year
- filing deadline
- 15 April; quarterly estimates 15 May, 15 August, 15 November
- residency basis
- Citizens: worldwide; resident aliens: Philippine income only
- regime flag
- 8% flat tax option for self-employed under PHP 3 million of receipts
Rates
Income tax scale (2026)
| Taxable income (PHP) | Rate | Tax on all bands below (PHP) |
|---|---|---|
| 0 – 250,000 | 0% | 0 |
| 250,001 – 400,000 | 15% | 0 |
| 400,001 – 800,000 | 20% | 22,500 |
| 800,001 – 2,000,000 | 25% | 102,500 |
| 2,000,001 – 8,000,000 | 30% | 402,500 |
| Over 8,000,000 | 35% | 2,202,500 |
Marginal rates apply within each band.
Self-employed and professional options (2026)
| Option | Rate / base | Conditions |
|---|---|---|
| Graduated scale | 0-35% on net income | Itemized deductions, or an optional standard deduction of 40% of gross receipts |
| 8% flat tax | 8% of gross receipts above PHP 250,000 | Receipts up to PHP 3 million; replaces income tax and percentage tax; elect in the first-quarter return |
Thresholds & allowances
- Zero bandPHP 250,000
No personal or dependant allowances exist since 2018 — the zero band replaces them
- 13th-month pay and benefitsExempt up to PHP 90,000
Including the excess of small-value perks over their own limits
- Minimum wage earnersFully exempt
Including holiday, overtime, night-shift and hazard pay
- Retirement account credit5% of contributions
Personal Equity and Retirement Account (PERA) cap: PHP 200,000 a year, 400,000 for overseas Filipinos
- Retirement benefitsExempt once
Under a qualified plan after 10 years' service and age 50+
Residency
Residency trigger
Citizens are resident unless they genuinely move abroad; foreigners become resident by intention rather than a fixed day count, and stay taxed only on Philippine-source income either way. Overseas Filipino workers with valid overseas-employment papers pay nothing on foreign earnings.
Non-resident treatment
Non-resident foreigners staying over 180 days ('engaged in trade or business') use the same 0-35% scale on Philippine income; shorter-stay non-residents pay a flat 25% final tax on gross Philippine income.
Notes
- The annual return is due 15 April; tax over PHP 2,000 can be split into two instalments (15 April and 15 October).
- Business earners file quarterly estimates on 15 May, 15 August and 15 November, with e-filing the default since 2024.
- Married couples file one return where practical but are taxed separately on their own incomes.
- Employees with one employer and correctly withheld tax do not need to file at all.
- Net operating losses carry forward 3 years; the 8% flat-tax election is closed to partners of professional partnerships and anyone registered for value added tax.
FAQ
What is the top income tax rate in the Philippines?
35%, on taxable income above PHP 8 million; the first PHP 250,000 of anyone's income is tax-free.
Do foreigners living in the Philippines pay tax on foreign income?
No — resident aliens pay 0% on foreign income; they are taxed only on Philippine-source income. Worldwide taxation applies only to resident Filipino citizens.
How does the 8% flat tax work?
Self-employed people with gross receipts up to PHP 3 million can pay 8% on receipts above PHP 250,000 instead of the graduated scale and percentage tax — elected in the first-quarter return.
Figures: tax year 2026, compiled from public sources. Not tax advice.