The new year 2023 is fast approaching. Many are looking forward to a new start.
One of the things we can look forward is the lower income tax rate for individual citizen and resident alien (foreigner) effective January 2023.
It must be recalled that Republic Act (RA) 10963 Tax Reform for Acceleration and Inclusion, also known as TRAIN Law, has amended Section 24 of the National Internal Revenue Code (NIRC) which pertains to the Income Tax Rate for Individual.
The act stated two schedule of new income tax rate as follows:
a) Effective January 1, 2018 to December 31, 2022
b) Effective January 1, 2023 and onward
Because of this change on income tax rate, withholding tax rate on employee’s compensation will likewise change.
Under Revenue Regulation (RR) 11-2018 Annex E, the new schedule of withholding tax on compensation effective January 1, 2023 and onward is as shown below.
Withholding Tax Table for 2023 Onward
| Payroll Frequency | Bracket/Column | From | To | Fix Tax | Tax Rate on Excess |
|---|---|---|---|---|---|
| Daily | 1 | 0 | 685 | 0 | 0 |
| 2 | 685 | 1,095 | 0 | 15% | |
| 3 | 1096 | 2191 | 61.65 | 20% | |
| 4 | 2,192 | 5,478 | 280.85 | 25% | |
| 5 | 5,479 | 21,917 | 1,102.6 | 30% | |
| 6 | 21,918 | and above | 6,034.3 | 35% | |
| Weekly | 1 | 0 | 4,808 | 0 | 0 |
| 2 | 4,808 | 7,691 | 0 | 15% | |
| 3 | 7,692 | 15,384 | 432.6 | 20% | |
| 4 | 15,385 | 38,461 | 1,971.2 | 25% | |
| 5 | 38,462 | 153,845 | 7,740.45 | 30% | |
| 6 | 153,846 | and above | 42,355.65 | 35% | |
| Semi-monthly | 1 | 0 | 10,417 | 0 | 0 |
| 2 | 10,417 | 16,666 | 0 | 15% | |
| 3 | 16,667 | 33,332 | 937.5 | 20% | |
| 4 | 33,333 | 83,332 | 4,270.7 | 25% | |
| 5 | 83,333 | 333,332 | 16,770.7 | 30% | |
| 6 | 333,333 | and above | 91,770.7 | 35% | |
| Monthly | 1 | 0 | 20,833 | 0 | 0 |
| 2 | 20,833 | 33,332 | 0 | 15% | |
| 3 | 33,333 | 66,666 | 1,875 | 20% | |
| 4 | 66,667 | 166,666 | 8,541.8 | 25% | |
| 5 | 166,667 | 666,666 | 33,541.8 | 30% | |
| 6 | 666,667 | and above | 183,541.8 | 35% |
Annual Income Tax Table for 2023 Onward
| Bracket | From | To | Fix Tax | Rate on Excess |
|---|---|---|---|---|
| 1 | 0 | 250,000 | 0 | 0 |
| 2 | 250,000 | 400,000 | 0 | 15% |
| 3 | 400,000 | 800,000 | 22,500 | 20% |
| 4 | 800,000 | 2,000,000 | 102,500 | 25% |
| 5 | 2,000,000 | 8,000,000 | 402,500 | 30% |
| 6 | 8,000,000 | and above | 2,202,500 | 35% |
2023 Withholding Tax and Annual Income Tax Table in Excel Files
To help you compute multiple withholding and annual income taxes on multiple employees, we prepared the tax tables in excel files. Please note that in the following excel files, the tax rate is displayed in decimal form instead of percentage for your easier computation.
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Hi. I have a question regarding the quarterly filing of percentage taxes.
I have 2 businesses, under my name, that are qualified for the percentage tax. Should I file 1 with combined tax return or should it be filed separately?
Hi, if Sole Proprietor with multiple business, the filing must be consolidated/combined. Hope this helps!