INCOME TAX – Guide on Annual Tax Based On Income Effective Year 2023

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Annual Income Tax Depending on Income Starting 2023

INCOME TAX – Here is a guide on the annual tax to be implemented based on income effective year 2023.

Taxes are present in all nations and almost everyone is paying taxes consciously or unconsciously. There are several kinds of implementation with regards to it.

There are taxes when you buy food in a restaurant, when you book a hotel accommodation, when purchase from the department store, and a lot more. These are the taxes that we don’t usually notice.

With regards to the other type of tax, it is the income tax that refers to how much the person is earning from work, a business, or a profession.

INCOME TAX

Under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, there are new exemption caps and rules for the income tax. Based on its primer, starting 2023, there will be new rates.

Meanwhile, the exemption cap remains at Php 250,000.00 meaning if your annual salary is Php 250,000.00 or below, you don’t need to pay for an income tax based on your earnings.

However, if your annual income is over Php 250,000.00. There is an income tax and it depends on the excess from the bracket set Here are some examples based on the Primer:

  • Over P250,000 but not over P400,000
    • 15% of the Excess Over P250,000
    • For example, if your income is Php 280,000.00, the taxable excess is Php 30,000.00 thus your annual tax is Php 4,500.00.
  • Over P400,000 but not over P800,000
    • P22,500 + 20% of the Excess over P400,000
    • For example, if you get Php 450,000.00 annually, the excess is Php 50,000.00 and 20% of it is Php 10,000.00. Your tax every year is Php 32,500.00.
  • Over P800,000 but not over P2,000,000
    • P102,500 +25% of the Excess over P800,000
    • For example, if you earn Php 900,000.00 annually, the excess is Php 100,000.00 and 25% of it is Php 25,000.00. Your annual tax is Php 127,500.00.
  • Over P2,000,000 but not over P8,000,000
    • P402,500 + 30% of the Excess over P2,000,000
    • For example, you get Php 5,000,000.00 every year thus the excess is Php 3,000,000.00 and 30% of it is Php 900,000.00. Plus the Php 402,500, your annual tax is Php 1,302,500.00.

Thank you for visiting our website. We hope we have helped you in regards to this. You may keep coming back for more informative guides.

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