How is my salary calculated?
In the Philippines, your salary is calculated by deducting mandatory contributions and taxes from your gross income to determine your net pay. Here's a step-by-step breakdown:
- Gross Income: This is your total earnings before any deductions, including basic salary, allowances, overtime pay, bonuses, and other compensation.
- Mandatory Contributions: Certain amounts are deducted from your gross income for government-mandated contributions such as SSS, PhilHealth, and Pag-IBIG Fund.
- Other Deductions: Deductions such as late, undertime, or leave without pay.
- Taxable Income: After deducting the mandatory contributions from your gross income, the remaining amount is your taxable income.
- Withholding Tax: The Philippines employs a progressive tax system, where tax rates increase with higher income brackets. Please refer to this guide for detailed instructions on calculating your tax deductions.
- Net Pay: Subtract the calculated income tax from your taxable income to arrive at your net pay (the amount you take home)
To calculate your salary, please refer to this link and choose “semi-monthly” on the payroll period. Let us know if you have further questions.
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