Compute the 5% income-tax credit on your PERA contribution for the year.
Tax credit
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Qualified contribution
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Annual cap
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A direct cut to your tax bill, up to a ceiling
This tool isolates one number from the broader PERA picture: the income-tax credit you earn for contributing. A credit is more valuable than a deduction. A deduction shaves your taxable income, but a credit comes straight off the tax you owe, peso for peso. The PERA credit is set at 5 percent of your qualified contribution. That sounds modest until you realise it is essentially a guaranteed, immediate 5 percent return courtesy of the tax code, on top of whatever your investments earn. The 5 percent rate and the contribution caps used here are the figures this calculator applies, so confirm them against current BIR guidance before relying on them for a filing.
Where the cap starts to bite
The credit is not unlimited, and this is the detail the calculator is built to surface. Only your qualified contribution counts, and that is capped at PHP 100,000 a year if you are a resident, or PHP 200,000 if you are an overseas Filipino. Contribute beyond the cap and the extra simply does not earn any additional credit. So the maximum credit is PHP 5,000 for a resident and PHP 10,000 for an overseas Filipino, full stop. Knowing exactly where the ceiling sits stops you from over-funding the account in the belief that more contributions automatically mean more tax relief.
When you over-contribute: a 150,000 peso case
Picture a resident professional who, feeling flush after a good year, puts PHP 150,000 into a PERA. The calculator first checks the qualified amount. For a resident the cap is PHP 100,000, so only PHP 100,000 qualifies and the extra PHP 50,000 is ignored for credit purposes. Five percent of PHP 100,000 is PHP 5,000, which is exactly the resident maximum. The PHP 50,000 above the cap earns nothing extra, it sits in the account doing the work of an ordinary investment without the bonus credit. These figures use the rate this calculator applies.
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The chart shows it plainly. Of the PHP 150,000 contributed, only the teal slice up to PHP 100,000 generates the credit, while the grey slice above the cap earns nothing extra in tax relief.
Claiming the credit on your return
The credit reduces your income tax due for the year, so you claim it when you file. To do that you need the proof of contribution your PERA administrator issues, often a certificate confirming the qualified amount. The practical tip: keep that document filed alongside your tax records, because without it you cannot substantiate the credit. One edge case worth flagging is that the credit reduces tax due but is generally not a cash refund on its own, so its value depends on you actually having income tax to offset. If your tax for the year is already near zero, the credit has less to bite into.
Things people get wrong about the credit
Is the 5 percent credit the same as my investment return?
No, they are separate. The 5 percent credit is a one-time tax benefit on the year's contribution, granted by the tax code. Your investment return is whatever the assets inside the PERA earn over time. You get both, which is what makes the account attractive, but do not confuse the guaranteed credit with a market return.
Do overseas Filipinos really get double the credit?
The cap on qualified contributions is higher for overseas Filipinos, PHP 200,000 versus PHP 100,000 as modelled here, so the maximum credit rises to PHP 10,000. The 5 percent rate itself is the same. Switch the status dropdown in the calculator to see the higher cap applied, and confirm your eligibility and the current limit with the BIR.