Income in Tagalog is "kita." Income is all the money that flows in to you over a period: salary, business profit, interest, dividends, rent, or remittances. Sa madaling salita, ang kita ay lahat ng perang pumapasok sa iyo, anuman ang pinagmulan, sa loob ng isang panahon.

One word, but it hides at least four different kinds of money. Knowing which kind of kita you have, and which kind you are building, changes how you save, invest, and pay tax. That is what this glossary unpacks.

The Tagalog Deep-Dive: Kita, Sweldo, Sahod, Tubo

Tagalog is precise about money coming in. English says "income" for everything; Tagalog splits it:

  • Kita is the umbrella word. Lahat ng pumapasok na pera ay kita. It comes from the verb kumita, to earn.
  • Sweldo (from Spanish sueldo) is salary, the fixed amount an employee receives. Formal but universally understood.
  • Sahod is the act or event of receiving pay. "Sahod na bukas" means payday is tomorrow. You receive your sahod; the amount is your sweldo.
  • Tubo is earnings from money itself: interest, yield, gains. Ang tubo ng deposito mo ay kita rin, pero hindi ito sweldo.
  • Kabuhayan is livelihood, the broader source of income: a sari-sari store, a tricycle, a farm.

Register note: in formal or BIR contexts, "income" usually stays in English or becomes kita in translated forms ("buwis sa kita" for income tax). Kapag kaswal na usapan, "Magkano ang kita mo diyan?" works for a business, while "Magkano ang sweldo mo?" is strictly for employment. Asking either question directly is, of course, a separate cultural risk.

The Four Types of Income Every Filipino Should Name

| English term | Tagalog | Meaning | |---|---|---| | Active income | Kita mula sa trabaho | Money earned by trading your hours: sweldo, raket, freelance fees | | Business income | Kita ng negosyo | Profit after a business pays its costs | | Portfolio income | Kita mula sa puhunan | Dividends, interest, and gains from investments | | Passive income | Kitang hindi direktang pinagtatrabahuhan | Cash flow from assets that pay you whether or not you show up | | Gross income | Kabuuang kita | Income before any deductions | | Net income | Netong kita | What actually lands in your pocket after deductions |

Ang karamihan ng Pilipino ay nagsisimula sa unang uri lamang: kita mula sa trabaho. The whole project of personal finance is converting some of that active income into the third and fourth types, so money keeps arriving even when you stop clocking in. Paano ito ginagawa sa konteksto ng Pilipinas, mula digital banks hanggang MP2 at REITs, ay nasa aming gabay sa passive income sa Pilipinas.

Ano ang Pinagkaiba ng Gross at Net Income?

Gross income is the headline number; net income is the truth. Ang gross ay ang nakasulat sa job offer; ang net ay ang dumarating sa payroll account mo.

A worked peso example. Si Liza, accounting staff sa Makati, may basic monthly salary na ₱30,000. Heto ang payslip niya:

  • Gross monthly income: ₱30,000.00
  • SSS contribution: ₱1,350.00
  • PhilHealth (2.5% employee share): ₱750.00
  • Pag-IBIG: ₱200.00
  • Withholding tax: ₱1,541.67
  • Net income (take-home): ₱26,158.33

That is a 12.8% gap between gross and net. Kapag nagba-budget ka gamit ang gross, laging kulang ang pera mo sa katotohanan. Every budget, every loan application you evaluate, every "kaya ko ba ang monthly amortization na ito" question should start from the ₱26,158.33, not the ₱30,000.

The same logic applies to business income. A milk tea stall with ₱80,000 monthly sales is not earning ₱80,000. After ingredients, rent, staff, and permits, the net might be ₱18,000. Sales are benta; income is kita. Maraming maliit na negosyo ang namamatay dahil pinagsama ang dalawa.

Why the Type of Kita Changes Your Tax

The Bureau of Internal Revenue does not treat all income the same, and the differences are large:

  • Compensation income (sweldo) is taxed on a graduated scale, 0% up to ₱250,000 a year, rising to 35% at the top.
  • Interest income from banks carries a 20% final withholding tax, deducted before you even see the tubo.
  • Cash dividends from domestic corporations are taxed at 10% final tax for individuals.
  • MP2 Pag-IBIG dividends are tax-exempt under the Pag-IBIG Fund charter, one reason the program is hard to beat for beginners.
  • Self-employed and professionals earning ₱3,000,000 or less in gross sales can opt for a flat 8% tax on gross receipts above ₱250,000, instead of graduated rates plus percentage tax.

The practical point: ₱1,000 of dividend income and ₱1,000 of overtime pay are not equal after tax. Kapag pinaplano mo kung saan manggagaling ang susunod mong kita, kasama ang buwis sa kuwenta.

From One Income to Many

The most fragile financial position in the Philippines is one income stream feeding an entire household, sometimes across an ocean. One illness, one layoff, one delayed remittance, at gumuguho ang buong budget. The stable position is layered: sweldo as the base, a side raket or small business as the second layer, then portfolio income (tubo, dibidendo) growing quietly underneath.

You do not need a big number to start the third layer. Sa 6.00% yield, ang ₱100,000 ay nagbibigay ng humigit-kumulang ₱500 kada buwan, maliit pero totoong kita na hindi mo pinagtrabahuhan ng oras. The vocabulary for every instrument that produces it, from bonds to REITs, is in our complete salitang pera glossary.

FAQ

What is the Tagalog word for income? Kita. It covers all money coming in: salary (sweldo), business profit (kita ng negosyo), interest (tubo), dividends (dibidendo), and rent. Sweldo refers only to employment salary, while kita is the umbrella term for every source.

What is the difference between gross income and net income? Gross income is your earnings before any deductions; net income is what remains after SSS, PhilHealth, Pag-IBIG, and withholding tax. On a ₱30,000 salary, take-home pay is roughly ₱26,158. Always budget from net, never from gross.

Ano ang pinakamadaling paraan para magkaroon ng pangalawang kita? Ang karaniwang unang hakbang: ilipat ang ipon sa instrumentong may tubo, tulad ng digital bank na may 4.00% interest o MP2 Pag-IBIG na historically 6% hanggang 7.5% ang dividend at tax-free pa. Hindi ito magpapayaman agad, pero ito ang simula ng kita na hindi mo binabantayan.