Close

Tax as a UK expat in Philippines

I am working for a foreign company in PH, we are a Branch Office of an EU company. I have been taxed at 32% of the whole of my income for the 2 months I have been here, but as I understand it the PH operates a progressive tax rate eventually rising to 32% but not on all of the income.

Can anyone advise on the true situation?

Hi!

if your income tax is 32% per month, then your annual income is more than PHP500,000.

Below is how the government computes it based on your annual income :
> 0 - 10,000 = 5%
> 10,000 - 30,000 = 10%
> 30,000 - 70,000 = 15%
> 70,000 - 140,000 = 20%
> 140,000 - 250,000 = 25%
> 250,000 - 500,000 = 30%
> 500,000 and above = 32%

so if your annual income is more than 500,000, then the tax computation is true.
mine is also 32%, i know.. it sucks.. especially seeing the country is not really developed. it always gives me a question, where does my money go?

In other countries I have worked i have at least been able to do tax deductible stuff like pensions, savings plans, life policies etc. but not here. It will definitely affect how long I stay here.

yes true. philippines is the highest deduction tax in south east Asia though..

amanda.O :

Hi!

if your income tax is 32% per month, then your annual income is more than PHP500,000.

Below is how the government computes it based on your annual income :
> 0 - 10,000 = 5%
> 10,000 - 30,000 = 10%
> 30,000 - 70,000 = 15%
> 70,000 - 140,000 = 20%
> 140,000 - 250,000 = 25%
> 250,000 - 500,000 = 30%
> 500,000 and above = 32%

so if your annual income is more than 500,000, then the tax computation is true.
mine is also 32%, i know.. it sucks.. especially seeing the country is not really developed. it always gives me a question, where does my money go?

500,000 pesos is only $10,000 USA, to be taxed at 32%?  Find another place to work.

I earn $13-15 per month depending on bonuses etc, not per year. Yes it is a decent salary but I do not want to make the sacrifice of working the other side of the world away from family and home to be taxed like this. The recruiter told me it was 32% top rate and suggested what my take home would be, higher than it actually is. I assumed that like anywhere else I have worked it was on an ascending sliding scale which was payable on the top portion of your salary, not all of it. I will raise this with my company and suggest we recalculate on a take home rather than gross basis. They are quite good on things like this talking to a couple of colleagues so I'll give it a go.

mugtech :
amanda.O :

Hi!

if your income tax is 32% per month, then your annual income is more than PHP500,000.

Below is how the government computes it based on your annual income :
> 0 - 10,000 = 5%
> 10,000 - 30,000 = 10%
> 30,000 - 70,000 = 15%
> 70,000 - 140,000 = 20%
> 140,000 - 250,000 = 25%
> 250,000 - 500,000 = 30%
> 500,000 and above = 32%

so if your annual income is more than 500,000, then the tax computation is true.
mine is also 32%, i know.. it sucks.. especially seeing the country is not really developed. it always gives me a question, where does my money go?

500,000 pesos is only $10,000 USA, to be taxed at 32%?  Find another place to work.

ikr, philippines has the highest income tax rate in south east asia but by looking at the country itself, how the infrastructure is.. i still can't understand why they take 32% of my salary every month.

Hello bangna63

There is a government website that gives you the info, plus info on reciprocal agreements with other countries (the UK)

https://www.bir.gov.ph/index.php/tax-in … e-tax.html 

All the best

Mervyn

You pay Tax to support the Buildings and offices with their facilities so that the people that work in those offices collecting the tax, can support themselves and their families  , same as the UK

Really? I thought I was paying for a pathetic infrastructure with  minimal reward. I will do my 2 yeATRS 2
2 years and  get the hell out of here here. Shame, seems like a good place.

you are very lucky in Philippines that it is only 32% Tax, maybe try to live some way where it is 35% as a start, then   the more you make the more tax it is, most modern Country have high Tax, for the reasons you see when you visit them.

I have worked in over 20 different countries, with various Employers/Agencies. The employer/agent who arranges your contract is usually in possession of all the tax requirements of the country that you are going to work in before you start your job.
In order to make it beneficial to you to work in that country the employer provides an uplift salary that is at least 2 times what you would earn in the UK for the same equivalent job, plus accommodation and food allowance with a tax free/offset, also with leave rotation and air and local travel allowance as part of your employment. Some countries have a insurance reciprocal agreement with the UK and your employer should also be covering your medical insurance requirements.
Some Employers/Agents. Are just not nice people, as a UK citizen you may have limited help from the British Embassy google their website.

Some tax does go to good use, schools etc

The tax rates are bracketed so you should not be paying 32% on all your income, just the income above P500,000.  And then for each bracketed amount of your income below P500,000 you pay the relevant % for that income bracket.

samangelevski :

you are very lucky in Philippines that it is only 32% Tax, maybe try to live some way where it is 35% as a start, then   the more you make the more tax it is, most modern Country have high Tax, for the reasons you see when you visit them.

well,, comparing philippines with singapore, malaysia or even japan, the tax in the philippines is higher.
even in japan, if you're earning is below 6,950,000 yen/annum  (3,083,683.04PHP) then your tax will be 20%. while in the philippines, if you're earning more than 500,000 PHP/annum then your tax is 32%.

but look at the country. japan, singapore and malaysia are way better than philippines. they are way more modern country but has lower tax. why?

Hard to tell how Tax systems work, but I do know what ever Tax systems they have it must work, Tax is usually adjusted to Inflation and Bank base Interest rates, so if the inflation rate is estimated to be above 3% up to 4,5% then you will find tax rates higher then low inflation as the Japan, then you have Bank rates they are funny ones too, they all kind of work at the base rate to keep inflation down as much, if inflation rates are high then Bank base rate will go high too, it is called off set, if they ever get it right.

New topic