How to Verify If Your Employer Is Deducting the Correct Tax

Nov 25, 2025

How to Verify If Your Employer Is Deducting the Correct Tax

1. Why Verifying Tax Deductions Matters
2. Know the Taxes That Should Be Deducted
3. Steps to Verify Your Employer’s Tax Deductions
Step 1: Gather Payroll Records
Step 2: Know Your Taxable Income
Step 3: Use a PH Tax Calculator
Step 4: Verify Contributions
Step 5: Track Cumulative Tax
Step 6: Report Discrepancies
4. Tips for Accurate Verification
5. Example

For many employees, taxes are a set-and-forget part of the monthly payroll. Your employer deducts your income tax, SSS, PhilHealth, and Pag-IBIG contributions automatically. But errors can happen, and if left unchecked, they could affect your take-home pay, benefits, and annual tax filing.

This guide shows you how to verify that your employer is deducting the correct tax and ensures you stay compliant with the BIR.

Even with automated payroll systems, mistakes happen. Verifying deductions helps you:

  • Avoid overpayment or underpayment of taxes

  • Ensure correct contributions to social security programs

  • Prevent penalties and interest during annual tax filing

  • Gain confidence in your take-home pay

Your monthly payroll deductions usually include:

  1. Withholding Tax on Compensation

    • Based on the latest TRAIN Law (2025) tax brackets.

  2. SSS Contributions

    • Employee share based on salary credit table.

  3. PhilHealth Contributions

    • 4.5% of monthly basic salary (2025 rates may vary slightly).

  4. Pag-IBIG Contributions

    • Usually 2% of monthly salary, with a minimum and maximum cap.

  5. Other Deductions

    • Loans, insurance, and voluntary contributions.

Collect:

  • Monthly payslips

  • BIR Form 2316 (issued annually by the employer)

  • Any relevant receipts or deduction statements

  • Gross salary including bonuses, allowances, and commissions

  • Subtract non-taxable allowances and mandatory contributions

  • Use this to determine your taxable income

  • Input your monthly or annual income

  • Include deductions and exemptions

  • Select your tax status (single, married, dependents)

  • Check the withholding tax displayed and compare with payroll deductions

  • Compare SSS, PhilHealth, and Pag-IBIG contributions against current 2025 rates.

  • Ensure voluntary deductions match your signed agreements.

  • Keep a record of taxes withheld month by month

  • Total should match the annual withholding reported in BIR Form 2316

If you notice errors:

  • Notify HR or payroll immediately

  • Provide evidence (payslips, contribution tables, tax calculator outputs)

  • Request correction in payroll or adjustment in the next month

  • Check regularly: Don’t wait until year-end to notice discrepancies.

  • Keep updated: Use the latest TRAIN Law tax tables and contribution rates.

  • Use reliable calculators: Online PH Tax Calculators are fast and accurate.

  • Document everything: Saves time if questions arise during annual filing.

Suppose you earn ₱25,000 per month. According to 2025 TRAIN Law:

  • Withholding tax should be ~₱1,330

  • SSS contribution: ₱800

  • PhilHealth: ₱400

  • Pag-IBIG: ₱100

If payroll deducts ₱1,800 for tax, you’re overpaid by ₱470. Multiply by 12 months → ₱5,640 lost. Verifying allows you to correct this promptly.

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