TRAIN Law (2020) Income Tax Tables in the Philippines



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

How will the TRAIN law affect incomes taxes of individuals and corporations? What are the new income tax rates? In this article, we focus on exactly that. Below you’ll find the new TRAIN Income Tax Tables adopted by the Bureau of Internal Revenue (BIR) and sample computations showing how income taxes are determined under TRAIN.

Take note that in the new TRAIN tax law, there are two sets of income tax tables to be implemented:

(1) Income Tax Tables for the years 2018 to 2022; and

(2) Income Tax Tables from the 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 selected articles below on Philippine taxation.


New BIR Income Tax Tables under TRAIN

Here’s the TRAIN income tax tables to be used from the year 2018 until 2022.

New Income Tax Tables under TRAIN Law, from 2018 to 2022

And here are the tax rates under TRAIN that will be used in the computation of income tax from the year 2023 onwards.

BIR Income Tax Tables under TRAIN, year 2023 onwards

New Income Tax Rates under TRAIN Law (for 2018-2022)

In the approved tax reform bill under TRAIN, from the initial implementation in 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 applicable tax rates are as follows.

Taxable Income per YearIncome Tax Rate (Year 2018-2022)
P250,000 and below0%
Above P250,000 to P400,00020% of the excess over P250,000
Above P400,000 to P800,000P30,000 + 25% of the excess over P400,000
Above P800,000 to P2,000,000P130,000 + 30% of the excess over P800,000
Above P2,000,000 to P8,000,000P490,000 + 32% of the excess over P2,000,000
Above P8,000,000P2,410,000 + 35% of the excess over P8,000,000
Source: BIR and PinoyMoneyTalk.com

All these will be implemented from 2018 until 2022 but beginning 2023, the rates will further fall.

BIR Income Tax Rates under TRAIN Law (After Year 2022)

From year 2023 onwards, the income tax rates will be further adjusted, as follows:

  • Those earning an 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 income tax rates from year 2023 onwards, as per the approved TRAIN tax law, are as follows.

Taxable Income per YearIncome Tax Rate (Year 2023 onwards)
P250,000 and below0%
Above P250,000 to P400,00015% of the excess over P250,000
Above P400,000 to P800,000P22,500 + 20% of the excess over P400,000
Above P800,000 to P2,000,000P102,500 + 25% of the excess over P800,000
Above P2,000,000 to P8,000,000P402,500 + 30% of the excess over P2,000,000
Above P8,000,000P2,202,500 + 35% of the excess over P5,000,000
Source:BIR and PinoyMoneyTalk.com

Compare: TRAIN Tax Tables vs. Old Income Tax Tables

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.

Income per YearIncome Tax Rate (Before TRAIN)
P10,000 and below5%
Above P10,000 to P30,000P500 + 10% of the excess over P10,000
Above P30,000 to P70,000P2,500 + 15% of the excess over P30,000
Above P70,000 to P140,000P8,500 + 20% of the excess over P70,000
Above P140,000 to P250,000P22,500 + 25% of the excess over P140,000
Above P250,000 to P500,000P50,000 + 30% of the excess over P250,000
Above P500,000P125,000 + 32% of the excess over P500,000
Source:BIR and PinoyMoneyTalk.com

Comparing the old (pre-TRAIN) tax tables versus the new Philippine income tax tables, we can see that the:

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

Under the TRAIN tax reform, 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.

In addition, the new BIR tax reform removed the monetary exemptions enjoyed by taxpayers in the old 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 in the TRAIN law.

Sample Computations using TRAIN Tax Table

How to compute income taxes under TRAIN?

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 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

Income Tax Computations (under TRAIN from year 2018 to 2022)

From 2018 until 2022, using the graduated income tax tables, the TRAIN tax rates are computed as follows:

Range of Taxable IncomeTAX DUE = a + (b x c)
OverNot OverBasic Amount (a)Additional Rate (b)Of Excess Rate (c)
-P250,000--
P250,000P400,000-20%P250,000
P400,000P800,000P30,00025%P400,000
P800,000P2,000,000P130,00030%P800,000
P2,000,000P8,000,000P490,00032%P2,000,000
P8,000,000-P2,410,00035%P8,000,000
Source:BIR &PinoyMoneyTalk.com

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 computed 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) = P10,000

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

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

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

Income Tax Computations (under TRAIN from year 2023 onwards)

Now, from the year 2023 onwards, a new graduated income tax tables will be in use. The formula to follow, though is still the same:

Range of Taxable IncomeTAX DUE = a + (b x c)
OverNot OverBasic Amount (a)Additional Rate (b)Of Excess Rate (c)
-P250,000--
P250,000P400,000-15%P250,000
P400,000P800,000P22,50020%P400,000
P800,000P2,000,000P102,50025%P800,000
P2,000,000P8,000,000P402,50030%P2,000,000
P8,000,000-P2,202,50035%P8,000,000
Source:BIR &PinoyMoneyTalk.com

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 tax due of P10,000 during the period 2018 to 2022. This is because the TRAIN tax rates were reduced even further 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. Using the new graduated income tax tables for 2023 onwards, the 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%.

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


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36 thoughts on “TRAIN Law (2020) Income Tax Tables in the Philippines”

  1. Sir, are the non taxable income like gsis/philhealth premiums and personal exemption still be considered in computing our taxable income? Or only the gross annual compensation will be ou basis in computing our tax due?

    1. Will the deduction for GSIS, Philheath and Pag-ibig fund be deducted from Gross Pay to arrive the taxable income?

  2. JEAL ROSE MINURTIO

    Good Day!

    magtatanong lang po sana ako kung ibabawas ba yong GSIS, PHILHEALTH AT PAGIBIG deduction?

    thank you po & God Bless…

  3. for professionals like doctors, are we still eligle to use the 40% optional deduction in lieu of itemized expenses? or will the new scheme be applied to gross income?

  4. Is there a specific industries that is exempted to income tax?. We actually belong to BPO industry. It is true that we are not included on that exemption though were earning under the category of 250k or below annually?

  5. Pano po yung mga employees like with dependents? Base on the new taxation mas tataas po ang tax namin. So we wont benefit from it. Its like we are the ones who will shoulder the taxes due feom other people. Like in may case i will be paying additional 5k.

  6. As per BIR 2018 Withholding Tax Table, Gross Income is used to compute for the monthly withholding tax.. Deductions for GSIS, Phil health and Pag-ibig fund are not considered in the computation of the monthly withholding tax.

  7. I don’t understand. Your table is based on the Gross Income. E, ano pa hong use nung mga personal exemption & dependents? elimated na po ba?
    Thanks!

  8. if below 250,000 ang gross ng isang consultant may deduction pa rin ba! and ilang percent po ba ang computation.

  9. Just asking if you know the answer for this. Our salary last January 11 2018, the company still deducted 30% on our withholding tax, katwiran cutoff is December 16 to 31st. Tama po ba un?

    1. Cash basis po ang tax, which means that since nabayaran po kayo ng January, applicable na TRAIN law sa inyo.

  10. Sir, i observed that you used 3 different column headings in the 3 Tax Tables shown above, as follows– “Annual Income”, “Gross Income Per Year”, “Income Per Year”. Shouldn’t the heading be “Net Taxable Income”?

  11. BAKIT MAY MGA FIXED VALUES PA NABABAYARAN ANG TAX PAYERS IBA PA YONG PERCENTAGE NA BABAYARAN KUNG SOBRA SA MAXIMUM KINITA. BAKIT DI NA LANG YONG PERCENTAGE. YON LANG PERCENTAGES AY MALAKI NA NA . WALA MAN LANG NAGREACT SA TRAIN TAX LAW NA GINAWA NILA

  12. Hi! Just wondering if we are still required to use the ebir forms for this years filingnof annual ITR. I downloaded it and the tax rates were not yet updated. Theyre still using the old version with no change in tax rate as indicated by TRAIN law. Tnx

  13. what forms should be filed if your a professional and opted for the graduated tax . do you still file the same 2551 M at 3% monthly and 1701 Q at 5% quarterly.

  14. Maria Melanie pontevedra

    Single proprietor po ako at ng availed ng 8% income tax -train law.ask ko lng kung mag file p ba ako ng quarterly now? Tnx

  15. Hi, I am a self-employed too and Im going to declare my income for the first time by jan or feb.. So technically only my income for the last quarter of this year will be declared. Please let me know if my computation is correct. I have Graduated OT -OSD.
    Say for example monthly income of P75000 x 3 (oct-dec2018) =P225000
    Since it’s below 250k lieu then it will be exempted from annual tax. Right?

  16. Hi po. Pag employed solo parent with 2 children, 1child is PWD, may tax incentive po ba yun? If so, how and where to file po? Salamat po.

  17. Would like to inquire, last postings under this site was a Train Law sample computation on monthly basis.
    With regards to Annual computation, does the 2 classification of compensation matters for annual computation. ( REGULAR AND SUPPLEMENTARY COMPENSATION)?

  18. HI! I M LOOKING FOR THE TAX EXEMPTION FOR PWD DEPENDENTS HERE IN THE TRAIN LAW? i cant find it, hope to get an answer po

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