Formula:

Taxable income = (Monthly Basic Pay + Overtime Pay + Holiday Pay + Night Differential) - (SSS/PhilHealth/Pag-IBIG deductions + Tardiness + Absences)

Assuming Withholding Tax Computed Monthly

[Example] Jane's Contribution:
Monthly Salary – 50,000
SSS contribution – 800
Philhealth contribution – 750
Pag-ibig contribution – 100
Status: Single

Calculations:

Taxable income = 50,000 – (800+750+100)
= 50,000 – 1,650
Taxable income = 48,350
Tax = 2,500 + [(48,350-33,333) x .25]
= 2,500 + (15,017 x .25)
= 2,500 + 3,754.25
Tax = P6,254.93

Referring to the table MONTHLY under Compensation Level, the highest amount that does not exceed Jane’s taxable income of P48,768.7 is P33,333 (column 3)

On the Prescribed Minimum Withholding Tax under (column 3) P2500 + 25% over CL. This means Jane’s tax is P2,500 plus 25% of the difference of her taxable income P48,350 and the amount in the table P33,333.

Source:

http://birtaxcalculator.com/tax_tables.php
https://www.bir.gov.ph/index.php/train.html
https://bir-excel-uploader.com/new-tax-calculator-2018/

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