New year, new rates! Apparently, lower rates!
In this article, we will be sharing the Bureau of Internal Revenue’s (BIR) tax tables to be used effective January 1, 2023. For easy reference and free download, an excel format of the tax table with a bonus sample calculator is available here. Reduced withholding tax rates are to be used in accordance with Republic Act No. 10963 or Tax Reform for Acceleration & Inclusion, in brevity and known as TRAIN Law.
For Individual Citizens and Resident Aliens Earning Purely Compensation Income and Individuals Engaged in Business and Practice of Profession, below are the Graduated Income Tax Rates under Section 24(A)(2) of the Tax Code of 1997, as amended by the TRAIN Law.
ANNUAL TAX TABLE
Effective January 1, 2023, an employee with annual taxable income of P400,000 will have a tax of P22,500 compared to a P30,000 tax in the past years. P7,500 lower, indeed!
WITHOLDING TAX TABLE
Effective January 1, 2023, an employee with a monthly taxable income of P33,333 will have a tax of P1,875 compared to a P2,500 tax in the past months. P625 lower, indeed!
We are hopeful that this change will create an impact on the purchasing power of every employee despite the country’s inflation, among other factors.
Good news! AanyaHR is compliant with TRAIN Law and the changes in tax rates are automatically applied. Human Resource in-charge or the Payroll Department does not need to do anything! Government-mandated reports are even at a few clicks. Want to know more about other helpful and awesome features of AanyaHR, please send an email to customerfirst@illimitado.com or visit our website and book for a demo!
Source: BIR