1. What is Net Pay Calculation?

The net pay calculation determines an employee's take-home pay after all deductions in the Philippines. It accounts for mandatory contributions (SSS, PhilHealth, Pag-IBIG) and income tax.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( Gross\ Pay \) — Total salary before deductions (PHP/year)
• \( Income\ Tax \) — Computed tax based on BIR brackets (PHP)
• \( SSS \) — Social Security System contribution (PHP)
• \( PhilHealth \) — Health insurance contribution (4% of gross pay)
• \( Pag\-IBIG \) — Home Development Mutual Fund contribution (up to 100 PHP/month)

Explanation: The equation subtracts all mandatory deductions from the gross salary to determine the actual take-home pay.

3. Importance of Salary Calculation

Details: Accurate net pay calculation helps employees understand their compensation and employers ensure proper withholding and remittance of contributions.

4. Using the Calculator

Tips: Enter gross pay in PHP/year, income tax in PHP, SSS contribution in PHP, PhilHealth (typically 4% of gross pay), and Pag-IBIG (max 100 PHP/month).

5. Frequently Asked Questions (FAQ)

Q1: How is income tax calculated in the Philippines?
A: Income tax follows progressive rates from 0% to 35% based on taxable income brackets set by the BIR.

Q2: What's the current SSS contribution rate?
A: SSS contributions are based on salary brackets, with both employee and employer sharing the contribution.

Q3: Is PhilHealth always 4%?
A: Currently yes, but rates may change. The 4% is split between employee and employer (2% each).

Q4: What's the maximum Pag-IBIG contribution?
A: The maximum monthly contribution is 100 PHP for employees earning 5000 PHP and above.

Q5: Are there other deductions not included here?
A: Yes, some employers may deduct union dues, loans, or other voluntary contributions not reflected in this basic calculator.