OFW Income Tax Philippines — What You Need to Know

Published: 2026-05-01 · Updated: 2026-05-01 · SuweldoKo

Do OFWs pay income tax in the Philippines?

OFWs (Overseas Filipino Workers) are generally exempt from Philippine income tax on income earned abroad. Under the NIRC, non-resident citizens (including OFWs) are taxed only on income from Philippine sources. Income earned from foreign employment is not subject to Philippine income tax.

OFW Tax Status Summary

Income Type	Philippine Tax Treatment
Foreign employment income	Exempt (non-resident citizen)
Philippine-sourced income (rental, business)	Taxable at progressive rates
Remittances received by family	Not taxable income
Interest from Philippine bank accounts	Subject to 20% final tax
Dividends from Philippine corporations	Subject to 10% final tax

Government Contributions for OFWs

OFWs may voluntarily contribute to SSS, PhilHealth, and Pag-IBIG to maintain benefits coverage. SSS voluntary contributions allow access to retirement, disability, sickness, and death benefits. PhilHealth voluntary coverage provides health insurance for the OFW and dependents. Pag-IBIG contributions build housing fund savings.

Returning OFWs

When an OFW returns to the Philippines and resumes local employment, they become resident citizens again and are subject to the full TRAIN Law progressive income tax on all income, including any Philippine-sourced income earned while abroad.

Common Questions

Mga Karaniwang Tanong

Do OFWs pay income tax in the Philippines?▾

OFWs are exempt from Philippine income tax on their foreign-sourced income. They are classified as non-resident citizens and taxed only on income from Philippine sources. Remittances sent home are not taxable income for the recipient.

Are OFWs required to pay SSS contributions?▾

OFWs are not mandated to pay SSS but may register as voluntary members to maintain their SSS benefits and coverage. Voluntary SSS contributions allow OFWs to access retirement, disability, and death benefits.

What is the Pag-IBIG obligation of OFWs?▾

Under RA 9679, OFWs are required to register with Pag-IBIG Fund and may pay voluntary contributions. Mandatory Pag-IBIG coverage applies to OFWs who are employed through the POEA or licensed recruitment agencies.

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