How to Use the Latest Withholding Tax Table for Employees
- Danhilson O. Vivo, CPA, REB, REA
- Oct 28
- 3 min read
The Bureau of Internal Revenue (BIR) regularly updates the withholding tax table to ensure that employee tax deductions align with the current income tax rates prescribed by law. Employers are responsible for correctly computing and remitting the withholding tax on compensation of their employees based on the updated schedule. This article provides a practical guide on how to use the latest BIR withholding tax table, along with the complete and updated 2025 tax table.
Official Basis
The updated withholding tax table is based on the BIR Revenue Regulations No. 13-2023 and Revenue Memorandum Circular (RMC) No. 05-2023, implementing the adjusted income tax rates under the TRAIN Law (Republic Act No. 10963). These rates took effect on January 1, 2023, and continue to apply in 2025.
Monthly Withholding Tax Table (Effective January 1, 2023 - Present)
Below is the complete updated monthly withholding tax table for employees as prescribed by the BIR:
How to Compute Withholding Tax on Compensation
To compute the monthly withholding tax using the table:
1. Determine the employee’s taxable monthly income – Subtract non-taxable benefits such as de minimis benefits and 13th month pay (up to ₱90,000) from gross income.
2. Identify the applicable bracket in the tax table based on taxable income.
3. Apply the base tax and percentage rate indicated in the table.
4. Formula: Withholding Tax = Prescribed Tax Due + [(Taxable Income – Excess Over) × Percentage Rate]
Sample Computation
Example: An employee has a monthly taxable income of ₱50,000.Step 1: Identify the range: ₱33,333 – ₱66,666Step 2: Prescribed tax due = ₱1,875Step 3: Excess over ₱33,333 = ₱16,667Step 4: Multiply by 20% = ₱3,333.40Step 5: Add base tax ₱1,875 + ₱3,333.40 = ₱5,208.40Thus, the monthly withholding tax is ₱5,208.40.
Remittance and Reporting
Employers must withhold and remit taxes through BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation). The deadline for remittance is on or before the 10th day of the following month, or the 15th day if filed electronically via eFPS or eBIRForms. Failure to file or pay on time may result in penalties, surcharges, and interest.
Best Practices for Employers
• Always refer to the official BIR withholding tax table available on the BIR website (www.bir.gov.ph).
• Update your payroll system to reflect the latest tax rates.
• Maintain proper documentation of employee income and tax deductions.
• Conduct regular payroll compliance reviews with certified tax consultants.
How DV Consulting Inc. Can Help
DV Consulting Inc. provides expert assistance in payroll management, tax compliance, and BIR filing. Our experienced CPAs ensure accurate withholding tax computation and remittance, minimizing risks of penalties or disallowances.
We also offer payroll automation solutions aligned with the latest BIR updates, ensuring that your business remains compliant and efficient.
Proper computation of withholding tax is essential for both employers and employees. By using the latest BIR withholding tax table and maintaining accurate payroll systems, businesses can stay compliant and avoid unnecessary penalties. Employers should always refer to official BIR publications and seek professional guidance when needed.
Article created by:
Danhilson Vivo, CPA, REB, REA
President & CEO
DV Consulting
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