Gross to Net Salary Calculator

Gross Pay vs. Net Pay: What's the Difference?

Every Filipino payslip has two numbers that matter most: gross pay and net pay. Gross pay is the full amount your employer agrees to pay you before anything is taken out — the number written in your employment contract or job offer. Net pay, often called take-home pay, is what actually lands in your bank account or gets handed to you in cash after mandatory government contributions and withholding tax have been deducted.

In the Philippines, the gap between gross and net pay is not optional or negotiable — it is required by law. Every employee covered by the Social Security System (SSS), PhilHealth, and the Home Development Mutual Fund (Pag-IBIG or HDMF) must contribute a percentage of their monthly salary to each of these programs, and employers are legally required to withhold and remit these amounts on the employee's behalf. On top of these three mandatory contributions, employers also withhold income tax under the Bureau of Internal Revenue's (BIR) graduated tax table, following the TRAIN Law (Republic Act No. 10963).

Understanding this gap matters for more than curiosity. It affects how you negotiate a job offer (a ₱30,000 offer is not ₱30,000 in your pocket), how you budget month to month, and how you plan for big purchases like a car or house loan where lenders look at your net disposable income. This calculator and guide walk through every deduction step by step using the official 2026 rates, so you can see exactly where your money goes.

The Four Deductions That Turn Gross Into Net

For a typical rank-and-file employee in the private sector, four deductions stand between gross pay and net pay: SSS, PhilHealth, Pag-IBIG, and BIR withholding tax. Each has its own rules, and all four are computed independently before being subtracted from gross pay.

1. SSS Contribution (5% Employee Share)

The Social Security System collects a total contribution equal to 15% of an employee's Monthly Salary Credit (MSC), split between employee and employer: the employee shoulders 5% and the employer shoulders10%. The MSC is not your exact salary — it is a bracket figure that SSS assigns based on where your actual monthly salary falls, ranging from a floor of ₱5,000 to a ceiling of ₱35,000.

For anyone whose MSC is above ₱20,000, an additional Mandatory Provident Fund (MPF) contribution kicks in on the portion of the MSC above that ₱20,000 threshold. The MPF is still split the same way — 5% employee, 10% employer — but it is tracked separately from the regular SSS fund (branded "MySSS Pension Booster") and functions as an extra retirement savings layer for higher-income earners. In practice, this means employees earning above roughly ₱20,250 a month have part of their SSS contribution routed into the MPF program alongside the regular SSS bracket, though the total 5% employee rate stays the same either way.

SSS contributions fund retirement pensions, disability benefits, maternity and sickness benefits, unemployment insurance, and death/funeral benefits for members and their dependents.

2. PhilHealth Premium (2.5% Employee Share)

PhilHealth, the national health insurance program, charges a premium rate of 5% of monthly basic salary in 2026, split exactly 50/50 between employee and employer — 2.5% each. There is a salary floor of ₱10,000and a ceiling of ₱100,000 used as the basis for computation. That means an employee earning less than ₱10,000 a month still has their premium computed as if they earned ₱10,000, and anyone earning more than ₱100,000 a month has their premium capped as if they earned exactly ₱100,000.

PhilHealth premiums fund inpatient and outpatient hospitalization benefits, the Konsulta primary care package, and a growing list of case-rate benefits for surgeries, dialysis, cancer treatment, and more.

3. Pag-IBIG Contribution (Home Development Mutual Fund)

Pag-IBIG contributions are the smallest of the three mandatory deductions in peso terms, but they build into a valuable long-term savings and housing loan benefit. The employee share is tiered: 1% of monthly compensation if that compensation is ₱1,500 or below, and 2% if compensation is above ₱1,500. Employers always contribute a flat 2%, regardless of the employee's salary level.

Crucially, the amount of "monthly compensation" used to compute the statutory Pag-IBIG contribution is capped at ₱10,000, even if the employee earns far more. That means the maximum employee share under the basic statutory program is ₱200 per month (2% of ₱10,000). Employees who want to save more through Pag-IBIG can voluntarily enroll in Pag-IBIG MP2 (Modified Pag-IBIG II), a separate voluntary savings program with no salary cap and typically better dividend rates — but MP2 contributions are optional and are not part of this gross-to-net computation.

Pag-IBIG contributions accumulate as a member's Total Accumulated Value (TAV), which can be withdrawn upon retirement, membership maturity, or in qualifying circumstances, and also qualifies members for Pag-IBIG housing loans and multi-purpose loans.

4. BIR Withholding Tax (TRAIN Law)

The final and usually the largest deduction for mid-to-high earners is income tax, withheld by the employer under the graduated tax table introduced by the TRAIN Law (RA 10963). Withholding tax is computed on taxable income, not gross pay — meaning SSS, PhilHealth, and Pag-IBIG employee contributions (and any qualified non-taxable allowances, like de minimis benefits within BIR limits) are subtracted from gross pay first, and tax is only applied to what remains.

Employers technically withhold tax every pay period based on an annualized projection of the employee's taxable income, applying the brackets on a pro-rated basis, with a year-end adjustment to true up any over- or under-withholding. For simplicity, this calculator computes it by annualizing the monthly taxable income (multiplying by 12), applying the annual brackets, and dividing back down to a monthly figure — which produces the same result as correct per-period withholding when income is steady throughout the year.

The 2026 annual taxable income brackets under the TRAIN Law are:

Notice that the first ₱250,000 of annual taxable income is entirely tax-free. This is why many minimum-wage and low-income earners in the Philippines pay zero income tax — their annual taxable income, after SSS, PhilHealth, and Pag-IBIG deductions, typically falls under that threshold.

Worked Example 1: ₱30,000 Monthly Gross Salary

Let's walk through a complete computation for an employee earning ₱30,000 gross per month, with no additional non-taxable allowances.

Step 1 — SSS. A monthly salary of ₱30,000 falls into the MSC bracket of ₱30,000. Since this is above the ₱20,000 MPF threshold, the ₱30,000 MSC splits into a regular SSS portion of ₱20,000 and an MPF portion of ₱10,000. Employee share: 5% of ₱20,000 (₱1,000) plus 5% of ₱10,000 (₱500), for a total employee SSS contribution of ₱1,500.

Step 2 — PhilHealth. 5% of ₱30,000 is ₱1,500 total premium, split 50/50. Employee share: ₱750.

Step 3 — Pag-IBIG. Monthly compensation is capped at ₱10,000 for computation purposes. Since ₱30,000 is above the ₱1,500 threshold, the employee rate is 2%. Employee share: 2% of ₱10,000 = ₱200.

Step 4 — Total mandatory deductions. ₱1,500 + ₱750 + ₱200 = ₱2,450.

Step 5 — Taxable income. ₱30,000 − ₱2,450 = ₱27,550 per month, or ₱330,600 annualized.

Step 6 — Withholding tax. ₱330,600 falls in the ₱250,001–₱400,000 bracket: 15% of the excess over ₱250,000. Excess = ₱80,600. Tax = 15% × ₱80,600 = ₱12,090 per year, or ₱1,007.50 per month.

Step 7 — Net pay. ₱30,000 − ₱2,450 − ₱1,007.50 = approximately ₱26,542.50 per month take-home pay.

That means an employee earning ₱30,000 gross keeps roughly 88.5% of their salary after all mandatory deductions — a fairly typical ratio for this income band.

Worked Example 2: ₱80,000 Monthly Gross Salary

Now let's see how the picture changes for a higher earner at ₱80,000 gross per month, where tax brackets start to bite harder.

Step 1 — SSS. ₱80,000 is well above the ₱35,000 MSC ceiling, so the MSC is capped at ₱35,000. This splits into ₱20,000 regular + ₱15,000 MPF. Employee share: 5% of ₱20,000 (₱1,000) + 5% of ₱15,000 (₱750) = ₱1,750.

Step 2 — PhilHealth. ₱80,000 is below the ₱100,000 ceiling, so the full amount is used. 5% of ₱80,000 = ₱4,000 total, split 50/50. Employee share: ₱2,000.

Step 3 — Pag-IBIG. Capped at ₱10,000 compensation, 2% rate applies. Employee share: ₱200 (same as any earner above ₱1,500 monthly, because of the statutory cap).

Step 4 — Total mandatory deductions. ₱1,750 + ₱2,000 + ₱200 = ₱3,950.

Step 5 — Taxable income. ₱80,000 − ₱3,950 = ₱76,050 per month, or ₱912,600 annualized.

Step 6 — Withholding tax. ₱912,600 falls in the ₱800,001–₱2,000,000 bracket: ₱102,500 + 25% of the excess over ₱800,000. Excess = ₱112,600. Tax = ₱102,500 + (25% × ₱112,600) = ₱102,500 + ₱28,150 = ₱130,650 per year, or ₱10,887.50 per month.

Step 7 — Net pay. ₱80,000 − ₱3,950 − ₱10,887.50 = approximately ₱65,162.50 per month take-home pay.

At this income level, the employee keeps roughly 81.5% of gross pay — noticeably less than the ₱30,000 earner's 88.5%, because the higher earner's taxable income has crossed into the 25% bracket instead of staying in the 15% bracket. Notice also that SSS and Pag-IBIG contributions do not keep scaling up proportionally once you're past their ceilings — the ₱80,000 earner pays only ₱250 more in SSS than the ₱30,000 earner despite earning nearly 3x more, and pays exactly the same Pag-IBIG amount. Withholding tax is what does most of the work of scaling deductions at higher income levels.

Gross vs. Net Pay at Different Salary Levels

The table below shows approximate monthly net pay at five common gross salary levels, assuming no non-taxable allowances and standard employee-only deductions.

A clear pattern emerges: at ₱15,000, withholding tax is zero because annualized taxable income stays under the ₱250,000 tax-free threshold. By ₱25,000, taxable income has just crossed into the 15% bracket, so a small tax starts to appear. From ₱40,000 upward, tax grows much faster than the mandatory contributions, which are capped by MSC ceilings, PhilHealth ceilings, and the Pag-IBIG statutory cap. This is the core reason net pay as a percentage of gross pay declines as income rises in the Philippines — it's a function of a progressive tax system layered on top of capped social contributions.

How 13th Month Pay Fits Into the Picture

Gross-to-net computations for regular monthly pay don't usually include 13th month pay, because it's paid separately — typically in November or December, on or before December 24, as required under Presidential Decree No. 851. Every rank-and-file employee who has worked at least one month during the calendar year is entitled to it, computed as total basic salary earned during the year divided by 12.

Importantly, the first ₱90,000 of combined 13th month pay and other bonuses in a calendar year is tax-exempt. Only the amount exceeding ₱90,000 is added to taxable income and subject to withholding tax. For most rank-and-file employees, 13th month pay falls entirely within this tax-exempt ceiling and is received in full, with no tax withheld at all.

Frequently Asked Questions

Is this calculator's result exactly what I'll see on my payslip?

It's a close and generally accurate estimate for a standard rank-and-file employee with no other income adjustments. Your actual payslip may differ slightly because of rounding conventions your employer's payroll system uses, mid-year adjustments to your withholding tax, or additional pay items like overtime, allowances, or loan deductions that aren't part of a basic gross-to-net computation.

Why did my Pag-IBIG deduction stay the same even though my salary went up?

Because the statutory Pag-IBIG program caps the "monthly compensation" used for computation at ₱10,000, regardless of how much more you actually earn. That caps the maximum employee contribution at ₱200 per month (2% of ₱10,000) for anyone earning above ₱1,500 a month. If you want to save more through Pag-IBIG, you can voluntarily enroll in the Pag-IBIG MP2 program, which has no such cap.

Why does my SSS contribution stop increasing after a certain salary?

SSS contributions are based on your Monthly Salary Credit (MSC), which is capped at ₱35,000 regardless of how much more you earn. Once your salary reaches that ceiling, your SSS deduction (regular plus MPF combined) stays flat even if your salary keeps rising.

Do non-taxable allowances actually reduce my tax?

Yes. De minimis benefits — like a rice subsidy, transportation allowance, or meal allowance — that fall within BIR-prescribed limits are excluded from taxable income entirely. That means the portion of your pay structured as a qualifying non-taxable allowance is not subject to withholding tax, which can meaningfully reduce your tax bill compared to receiving the same total amount as fully taxable basic salary.

Why is withholding tax the biggest deduction for high earners but zero for minimum-wage earners?

Because the TRAIN Law's tax table is progressive and starts at 0% for the first ₱250,000 of annual taxable income. Minimum wage earners and many low-income workers have annual taxable income under that threshold after SSS, PhilHealth, and Pag-IBIG deductions, so they legally owe no income tax at all. As gross pay rises, though, taxable income quickly moves into higher brackets (15%, 20%, 25%, 30%, or 35%), while SSS, PhilHealth, and Pag-IBIG contributions are all capped — so tax becomes the dominant and fastest-growing deduction for mid-to-high income earners.

Does my employer also pay for SSS, PhilHealth, and Pag-IBIG?

Yes — this calculator only shows the employee share that's deducted from your salary. Your employer pays an additional, larger share on top of your salary at no cost to you: 10% of MSC for SSS (vs. your 5%), 2.5% for PhilHealth (matching your 2.5%), and a flat 2% for Pag-IBIG (matching or exceeding your 1–2%). These employer contributions are a real cost to the business but don't appear on your payslip as a deduction from your pay.

Is this calculator updated for 2026 rates?

Yes. All figures used here — SSS's 15% total rate with MSC brackets up to ₱35,000, PhilHealth's 5% premium rate with a ₱10,000 floor and ₱100,000 ceiling, Pag-IBIG's tiered 1–2% employee rate with a ₱10,000 compensation cap, and the BIR TRAIN Law's graduated income tax brackets — reflect the rates in effect for tax year 2026.

What if I'm paid semi-monthly or weekly instead of monthly?

Your total monthly deductions and net pay don't change based on pay frequency — only how that monthly total is divided across pay periods does. Semi-monthly pay splits your monthly net into two roughly equal cutoffs (commonly the 15th and end of month), while weekly pay divides it across approximately 4.33 weeks per month. Use the pay frequency selector above to see your estimated take-home amount per cutoff or per week.