Taxes
The same ₱1 is taxed very differently depending on how you earned it. Here's the Philippine tax on each way of making money, low to high.
The peso you earn selling shares is taxed 0.6%. The peso you earn from work can be taxed up to 35% — about 58× more.
Philippine tax rate by source of income
💼 work 🏢 business 📈 capital / assets 🏛️ inherited wealth
Read top to bottom, the pattern is hard to miss: income from capital and inherited wealth — the things you need money to own in the first place — is taxed far below income from work. So the more of your income comes from assets rather than a salary, the lower your overall rate tends to be.
Every rate, explained — swipe →
🏛️ wealth transfer
6% Inheritance (estate)
of the net estate
Since the 2018 TRAIN law, a flat 6% on what's left of an estate after deductions (including a ₱5,000,000 standard deduction and up to ₱10,000,000 for the family home). Passing on wealth is taxed once, lightly.
📈 capital
6% Selling real estate
of the sale price or zonal value
A 6% capital gains tax on the higher of the selling price or the BIR zonal value, for property held as a capital asset.
📈 capital
10% Dividends
final tax on the payout
Dividends are your share of a company's profit, paid out to you as a shareholder. For a resident, a 10% final tax is withheld and that's it — no bracket, no filing.
📈 capital
20% Bank interest
final tax
Interest on a peso bank deposit is taxed 20%, withheld at source.
🏢 business
25% Corporate profit
of net income (20% for small firms)
The regular corporate income tax is 25% of net taxable income — 20% for small domestic companies (taxable income up to ₱5,000,000 and assets up to ₱100,000,000), under the CREATE law.
💼 work
35% Salary (top bracket)
on income over ₱8M/yr (marginal)
Salaries are taxed on a graduated scale: 0% up to ₱250,000 a year, then 15% → 20% → 25% → 30%, up to 35% on income above ₱8,000,000. The 35% is the top marginal rate; most workers pay a lower effective rate, but every peso of a high salary above ₱8M is taxed at 35% — versus 0.6% for a peso from selling shares.
💼 work
35% Fringe benefits
on the value of the benefit
Perks given to managers and supervisors (housing, cars, club dues) carry a 35% fringe benefits tax, paid by the employer.
Important: these rates aren't measured the same way
- The bars are the headline statutory rates, but they sit on different bases: 0.6% on the gross sale price of shares, 6% on a net estate, 10% on a dividend payout, up to 35% on net salary. They're not perfectly like-for-like.
- Salary is graduated: the first ₱250,000 a year is untaxed and most workers never reach 35%, so a typical effective rate is lower than the top bracket shown. Even so, a peso of high salary is taxed at 35% where a peso from selling listed shares is taxed 0.6%.
- This covers income taxes only. Everyone also pays 12% VAT on most purchases — a tax that lands hardest on those who spend all they earn.
- Sources: PwC Tax Summaries — Philippines (individual & corporate); BIR — Estate Tax (RA 10963 / TRAIN). current law (TRAIN + CREATE), reviewed 2026. Full methodology →