1. What is Daily Rate Calculation?

The daily rate calculation converts a monthly salary to a daily equivalent for tax withholding purposes in the Philippines. This is commonly used for contractual employees or those paid on a daily basis.

2. How Does the Calculator Work?

The calculator uses the standard formula:

Where:

• Monthly Rate — The employee's monthly salary in PHP
• 12 — Number of months in a year
• 365 — Number of days in a year

Explanation: This calculation spreads the annual salary evenly across all days of the year to determine the daily equivalent.

3. Importance of Daily Rate Calculation

Details: Accurate daily rate calculation is essential for proper tax withholding, social security contributions, and other statutory deductions in the Philippines.

4. Using the Calculator

Tips: Enter the monthly salary in Philippine Pesos (PHP). The calculator will compute the equivalent daily rate used for withholding tax calculations.

5. Frequently Asked Questions (FAQ)

Q1: Why divide by 365 instead of working days?
A: For tax withholding purposes, the BIR uses 365 days to calculate the daily rate regardless of actual working days.

Q2: Is this the same as the daily wage?
A: No, this is the tax-equivalent daily rate. Actual daily wages may differ based on employment contracts.

Q3: Does this include 13th month pay?
A: No, this calculation is based on basic monthly salary only. Additional compensation should be calculated separately.

Q4: How is this used for withholding tax?
A: The daily rate determines which tax bracket applies for percentage tax withholding calculations.

Q5: Is this applicable to all employees?
A: Primarily used for daily-paid or contractual employees. Regular monthly-paid employees have different tax computation methods.