Philippines BIR
Employer Compliance Guide 2025
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Philippine employers must comply with four major statutory bodies governing employee compensation. Each has separate contribution rates, wage bases, filing deadlines and reporting formats — making Philippine payroll one of the more complex compliance environments in ASEAN.
BIR Withholding Tax on Compensation (TRAIN Law)
Employers are required to withhold income tax from employees’ monthly compensation under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, Republic Act 10963. The withheld amount must be remitted to BIR by the 10th or 15th of the following month depending on the employer’s classification.
| Annual Taxable Income | Income Tax Due |
|---|---|
| Up to ₱250,000 | 0% — Tax Exempt |
| ₱250,001 – ₱400,000 | 15% on excess over ₱250,000 |
| ₱400,001 – ₱800,000 | ₱22,500 + 20% on excess over ₱400,000 |
| ₱800,001 – ₱2,000,000 | ₱102,500 + 25% on excess over ₱800,000 |
| ₱2,000,001 – ₱8,000,000 | ₱402,500 + 30% on excess over ₱2,000,000 |
| Above ₱8,000,000 | ₱2,202,500 + 35% on excess over ₱8,000,000 |
SSS, PhilHealth & Pag-IBIG Contribution Rates (2025)
| Statutory Body | Employer Share | Employee Share | Wage Basis / Cap |
|---|---|---|---|
| SSS | 9.5% | 4.5% | Monthly Salary Credit — max ₱20,000 |
| PhilHealth | 2.5% | 2.5% | Basic monthly salary — max ₱100,000 |
| Pag-IBIG (HDMF) | 2% | 2% | Monthly compensation — max ₱5,000 basis |
All three contributions must be remitted monthly. SSS and PhilHealth have specific contribution schedule tables — contributions are not simply a flat percentage applied to any salary; they are based on salary brackets that determine the applicable contribution amount.
13th Month Pay
Under Presidential Decree 851, all rank-and-file employees in the private sector who have worked for at least one month during the calendar year are entitled to receive a 13th month pay.
- Amount: equivalent to 1/12 of the employee’s total basic salary earned during the calendar year
- Payment deadline: on or before 24 December each year
- Tax treatment: up to ₱90,000 is tax-exempt under the TRAIN Law
- Eligibility: all rank-and-file employees regardless of position, designation or employment status
- Managers and executives are excluded from the rank-and-file definition but most companies extend the benefit as a matter of policy
- Pro-ration applies for employees who did not work the full year
Minimum Wage (NCR, 2025)
Minimum wages in the Philippines are set by Regional Tripartite Wages and Productivity Boards — rates vary by region. The National Capital Region (NCR) has the highest minimum wage in the country.
| Sector | NCR Daily Rate (2025) |
|---|---|
| Non-Agriculture (NCR) | ₱645/day |
| Agriculture / Service / Retail Establishments with ≤15 workers (NCR) | ₱645/day |
| Other regions | Varies — set by Regional Wage Boards. Check DOLE for current rates. |
Philippines Payroll Filing Calendar
Philippine Payslip Requirements
Under DOLE regulations, employers must provide employees with payslips that clearly show all components of their compensation and deductions. While less prescriptive than Singapore’s MOM requirements, Philippine payslips should include:
- Basic salary / hourly rate and total hours or days worked
- All allowances paid — COLA, transportation, meal, housing
- Overtime pay, night differential, holiday pay and rest day pay
- SSS, PhilHealth and Pag-IBIG employee share deductions
- BIR withholding tax deduction for the period
- Other deductions (loans, cash advances)
- Net salary paid
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