Why your tax isn't a flat percentage
Philippine income tax is progressive. The first ₱250,000 a year is tax-free; income above that is taxed in slices at 15%, 20%, 25%, 30% and 35%. Only the income within each bracket is taxed at that bracket's rate.
Before the table is applied, your mandatory SSS, PhilHealth and Pag-IBIG contributions are deducted, which lowers the taxable amount.
Common questions
Under the TRAIN law, the first ₱250,000 of annual taxable income is exempt. Only income above that is taxed, at 15% to 35%.
Your gross pay less mandatory SSS, PhilHealth and Pag-IBIG contributions. Those are excluded before the tax table is applied.
Your marginal rate is the bracket your last peso falls into (up to 35%). Your effective rate is total tax over total income — always lower.