President Marcos called for tax relief during his fifth State of the Nation Address (SONA) on July 27, 2026, and House leaders wasted no time responding. The very next day, House Speaker Faustino “Bojie” Dy III and Majority Leader Sandro Marcos filed House Bill No. 10345, seeking to raise the annual tax-free income ceiling from ₱250,000 to ₱350,000.
Here’s what’s actually being proposed, how much you could actually save, and where the bill currently stands.
What HB 10345 Proposes
The bill seeks to amend Section 24 of the National Internal Revenue Code, restructuring the graduated income tax rates that apply to Filipino citizens and resident aliens. If passed and signed into law, it would take effect on January 1, 2027.
Current vs. Proposed Tax Brackets
Current brackets (TRAIN Law):
- Up to ₱250,000: 0%
- Over ₱250,000 to ₱400,000: 15%
- Over ₱400,000 to ₱800,000: 20%
- Over ₱800,000 to ₱2,000,000: 25%
- Over ₱2,000,000 to ₱8,000,000: 30%
- Over ₱8,000,000: 35%
Proposed brackets (HB 10345):
- Up to ₱350,000: 0%
- Over ₱350,000 to ₱400,000: 15%
- Over ₱400,000 to ₱800,000: 20% (unchanged)
- Over ₱800,000 to ₱2,000,000: 25% (unchanged)
- Over ₱2,000,000 to ₱8,000,000: 30% (unchanged)
- Over ₱8,000,000: 35% (unchanged)
In short: the exemption ceiling moves up by ₱100,000, and the 15% bracket shrinks to only cover ₱350,000 to ₱400,000 instead of ₱250,000 to ₱400,000. Everything above ₱400,000 stays exactly the same.
How Much Would You Save Under HB 10345?
Here’s the number most readers actually want to know. Since the brackets above ₱400,000 stay exactly the same, everyone earning ₱400,000 or more would save the exact same flat amount, since that reduction is baked into the base tax calculation carried forward from the lower brackets. Below ₱400,000, savings scale up gradually from zero.
| Annual Taxable Income | Current Tax Due | Proposed Tax Due | Annual Savings | Monthly Savings |
|---|---|---|---|---|
| ₱300,000 | ₱7,500 | ₱0 | ₱7,500 | ₱625 |
| ₱350,000 | ₱15,000 | ₱0 | ₱15,000 | ₱1,250 |
| ₱400,000 | ₱22,500 | ₱7,500 | ₱15,000 | ₱1,250 |
| ₱500,000 | ₱42,500 | ₱27,500 | ₱15,000 | ₱1,250 |
| ₱800,000 | ₱102,500 | ₱87,500 | ₱15,000 | ₱1,250 |
| ₱1,000,000 | ₱152,500 | ₱137,500 | ₱15,000 | ₱1,250 |
The pattern here is straightforward:
- If you earn between ₱250,000 and ₱400,000, your savings scale up the closer you are to ₱400,000, topping out at ₱15,000 a year.
- If you earn ₱400,000 or more, your savings are capped at a flat ₱15,000 per year (₱1,250 per month), no matter how much higher your income goes, since every bracket above that point shifts down by the same fixed amount.
- If you earn below ₱250,000, you’re already exempt under current law, so this bill wouldn’t change anything for you.
Want to see your exact current tax computation before comparing it against these proposed numbers? Use our net salary calculator to check your take-home pay under today’s rates.
What Stays the Same
A few provisions carry over unchanged from current law:
- Married couples will continue computing their income taxes separately. Income that can’t be attributed exclusively to either spouse gets divided equally between them.
- Minimum wage earners remain exempt from income tax on their basic pay, plus holiday pay, overtime pay, night shift differential, and hazard pay, regardless of this bill.
Current Status of the Bill
As of this writing, HB 10345 has only been filed in the House of Representatives. It still needs to go through committee hearings, floor debates, and a full House vote before moving to the Senate for its own version and eventual reconciliation. A Senate counterpart bill has not yet been formally confirmed. Until it clears both chambers and is signed by the President, this remains a proposal, not law, and the current ₱250,000 exemption threshold still applies.
We’ll update this article as the bill moves through Congress.
FAQs
How much would I save if HB 10345 gets approved?
It depends on your income level. If you earn between ₱250,000 and ₱400,000 annually, your savings scale up gradually to a maximum of ₱15,000 per year. If you earn ₱400,000 or more, your savings are capped at a flat ₱15,000 per year (about ₱1,250 per month), regardless of how much higher your income is, since the brackets above ₱400,000 remain unchanged.
Is the ₱350,000 tax exemption already in effect?
No. This is still a proposed bill (HB 10345), not a signed law. The current tax-free threshold remains ₱250,000 until Congress passes this measure and the President signs it.
When would this take effect if passed?
The bill proposes an effective date of January 1, 2027, meaning it would apply to income earned starting that year, not retroactively to 2026.
Does this bill increase taxes for high earners?
No. The brackets above ₱400,000 remain exactly the same as current law. Only the lower-income brackets are being restructured.
Will minimum wage earners be affected?
Minimum wage earners are already exempt from income tax under current law, and this bill doesn’t change that. Their basic pay, holiday pay, overtime, night differential, and hazard pay all remain exempt.
Blogger’s Corner
Malaking bagay ito lalo na sa mga nasa ₱250,000 to ₱350,000 range ngayon, kasi sila yung pinaka-directly maaapektuhan kung maipasa ito. Pero since bago pa lang ito i-file sa Kamara, matagal pa bago ito maging batas, kung sakaling maging batas man. I-uupdate namin itong article habang may bagong development.
This article is for general informational purposes only and reflects the status of House Bill No. 10345 as of the time of writing. This is a proposed measure and not yet enacted into law. Always verify the current status of pending legislation through official government channels such as the House of Representatives website or the Bureau of Internal Revenue before making financial decisions based on it.