Project your PERA balance and the 5% annual tax credit on contributions.
Projected balance at retirement
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Total contributed
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Annual tax credit
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Total tax credit
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Two tax breaks bundled into one account
A Personal Equity and Retirement Account, created under the PERA law, is the closest thing the Philippines has to a fully tax-advantaged retirement wrapper. It hands you two distinct benefits. First, a 5 percent income-tax credit on what you put in each year, which directly trims the tax you owe. Second, the money invested inside the account grows free of the usual taxes on investment income, and a qualified distribution comes out tax-free. This calculator models both sides at once: it compounds your yearly contributions into a projected nest egg and tallies the credits you collect along the way. The 5 percent credit rate and the contribution caps shown here are the figures this calculator applies, so treat them as the BIR's framework as modelled and confirm the current numbers with the Bureau of Internal Revenue.
How the projection builds the balance
The growth figure uses a future-value annuity calculation. Each year you add a contribution, that money compounds at your expected return, and the contributions stack year after year. The tool assumes contributions land at the end of each year, which is the conservative choice, an early-in-the-year deposit would compound slightly more. There is one quiet guardrail: a PERA legally cannot accept more than the annual cap, so if you enter a contribution above your limit, the calculator invests only the capped amount. That keeps the projection honest rather than letting you model a balance you could never legally fund.
Twenty-five years at 100,000 a year
Use the default: a resident contributing PHP 100,000 a year, 25 years to retirement, and a 7 percent expected return. The contribution sits right at the resident cap of PHP 100,000, so the full amount is invested. Over 25 years you contribute PHP 2,500,000 of your own money. At 7 percent compounding, the projected balance grows to about PHP 6,324,904, meaning roughly PHP 3.8 million is investment growth you never paid tax on. Separately, the 5 percent credit on each PHP 100,000 contribution is PHP 5,000 a year, which over 25 years adds up to PHP 125,000 in tax you did not have to pay. These figures use the rates this calculator applies.
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The chart makes the point of long investing visible: the slim teal block is the cash you actually put in, and the wide grey block is the compounded growth riding on top of it.
The age-55 finish line
The tax-free distribution is not automatic. To collect it, you generally need to reach age 55 and have kept the account funded for at least 5 years. Pull the money out before you qualify and you forfeit the perks, the tax-exempt treatment unwinds and penalties apply, which can claw back much of what the wrapper saved you. The practical read: open a PERA only with money you genuinely intend to leave alone until retirement. A common mistake is treating it as a flexible savings pot. It is not, and its whole advantage comes from the long hold.
Common PERA mix-ups
Can I open more than one PERA?
You can hold PERA accounts across different products, but the annual contribution cap applies to your total, not per account. So splitting money between accounts does not let you contribute more than the resident or overseas Filipino limit in a single year. Confirm the current account rules with your administrator and the BIR.
Is the 7 percent return guaranteed?
No. The return is an assumption you choose, and a PERA can hold conservative or growth investments with very different outcomes. The 7 percent in the example is illustrative. Try a lower figure like 4 or 5 percent to see a more cautious projection, and remember real returns vary year to year.
Does contributing less than the cap still earn the credit?
Yes. The credit is 5 percent of whatever you actually contribute, up to the cap. If you put in PHP 60,000, the credit is PHP 3,000. You do not have to hit the ceiling to benefit, though contributing more, up to the cap, earns a proportionally larger credit and a bigger balance.