Professional Documents
Culture Documents
Philippines)
FEBRUARY 22, 2011 BY VICTORINO ABRUGAR
How to compute withholding tax on compensation and wages in the Philippines? If
you have seen a Monthly Remittance Return of Income Taxes Withheld on
Compensation or BIR Form No. 1601-C, you will only see totals of compensation and
tax withheld on compensation of the taxpayers employees. You will not have an idea
on the computation of the tax withheld on compensation for each of those employees.
In this article, we will tackle how a withholding tax is computed for each of them. So
lets proceed.
Requirement of Withholding
According to Section 79 of the National Internal Revenue Code (Republic Act No.
8424), as further amended by RA 9504, except in the case of a minimum wage earner
as defined in Sec. 22(HH) of this code, every employer making payment of wages shall
deduct and withhold upon such wages a tax determined in accordance with the rules
and regulations to be prescribed by the Secretary of Finance, upon recommendation
of the Commissioner. This means that employees and workers who earn minimum
wages are not subject to withholding tax. The summary of the current regional
minimum wage rates can be viewed at the Department of Labor and Employment
(DOLE) official website.
Methods of computing tax withheld on compensation
1. Use of withholding tax table. In general, every employer making payment of
compensation shall deduct and withhold from such compensation a tax determined in
accordance with the prescribed Revised Withholding Tax Tables (Annex C) which shall
be used starting January 1, 2009. Below are the four withholding tax tables prescribed
in these regulations:
a.
Monthly tax table to be used by employers using the monthly payroll period;
b.
payroll period;
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c.
Weekly tax table to be used by employers using the weekly payroll period;
d.
Daily tax table to be used by employers using the daily payroll period.
Legend:
Z-Zero exemption
S-Single
ME-Married Employee
1;2;3;4- Number of qualified dependent children
S/ME = P50,000 Each Working employee
Qualified Dependent Child = P25,000 each but not exceeding four (4) children
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b.
Quarterly and semi-annually divide the compensation by three (3) or six (6)
3. Annualized withholding tax method. This method is used (a) when the employeremployee relationship is terminated before the end of the calendar year; and (b) when
computing for the year-end adjustment (the employer shall determine the amount to be
withheld from the compensation on the last month of employment or in December of
the current calendar year).
Steps in computing amount of tax to be withheld
Step1. Determine the total monetary and non-monetary compensation paid to an
employee for the payroll period, segregating gross benefits which include 13th month
pay, productivity incentives, Christmas bonus, other benefits, received by the
employee per payroll period, and employees contribution (employees contribution
only and not the employers contribution) to SSS, GSIS, HDMF, PHIC, and union dues.
Gross benefits which are received by officials and employees of both public and
private entities in the amount of P30,000 or less shall be exempted from income and
withholding taxes.
You may read our article about How to compute 13th Month Pay in the Philippines.
Step2. Segregate the taxable from the non-taxable compensation income paid to the
employee for the payroll period. The taxable income refers to all remuneration paid to
an employee not otherwise exempted by law from income tax and consequently from
withholding tax. The non-taxable income are those which are specifically exempted
from income tax by the Code or by other special laws as listed in Sec.2.78.1(B) hereof
(e.g. benefits not exceeding P30,000, non-taxable retirement benefits and separation
pay).
You may read our article titled How to Compute Separation Pay in the Philippines.
Step3. Segregate the taxable compensation income as determined in Step 2 into
regular taxable compensation income and supplementary compensation income.
Regular compensation includes basic salary, fixed allowances for representation,
transportation and other allowances paid to an employee per payroll period.
Supplementary compensation includes payments to an employee in addition to the
regular compensation such as commission, overtime pay, taxable retirement pay,
taxable bonus and other taxable benefit, with or without regard to a payroll period.
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You may read our article on How to Compute Overtime Pay in the Philippines.
Representation and Transportation Allowance (RATA) granted to public officers and
employees under the General Appropriations Act and the Personnel Economic Relief
Allowance (PERA) which essentially constitute reimbursement for expenses incurred
in the performance of government personnels official duties shall not be subject to
income tax and consequently to withholding tax.
Step 4. Use the appropriate tables mentioned under Section 2.79 (B)(1) for the payroll
period: monthly, semi-monthly, weekly or daily, as the case may be.
Step 5. Fix the compensation level as follows:
(a)
qualified dependent children using the appropriate symbol for the taxpayers status.
(b) Determine the column to be used by taking into account only the total amount of
taxable regular compensation income. The compensation level is the amount indicated
in the line and column to which the regular compensation income is equal to or in
excess, but not to exceed the amount in the next column of the same line.
Step 6. Compute the withholding tax due by adding the tax predetermined in the
compensation level indicated at the top of the column, to the tax on the excess of the
total regular and supplementary compensation over the compensation level, which is
computed by multiplying the excess by the rate also indicated at the top of the same
column/compensation level.
Sample Computations Using the Withholding Tax Tables
The following are sample computations of Withholding tax on compensation using the
withholding tax tables:
Example 1: Single with no dependent receiving monthly compensation
Juan Santos, single with no dependent, receives P18,000 (net of SSS/GSIS,PHIC,HDMF
employee share only) as monthly regular compensation and P 7,000 as supplementary
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compensation for January 2011 or a total of P25,000. How much is the withholding tax
for January 2011 for Juan?
Computation:
By using the monthly withholding tax table, the withholding tax for January 2011 is
computed by referring to Table A line 2 S (single) of column 6 (fix compensation level
taking into account only the regular compensation income of P18,000 which shows a
tax of P1,875 on P15,833 plus 25% of the excess of P 2,167 (P18,000-15,833) plus
P7,000 supplementary compensation.
Regular compensation:
18,000
15,833
P
2,167
7,000
P 9,167
P 1,875.00
2,291.75
P 4,166.75
Computation: Using the semi-monthly withholding tax tables, the withholding tax due
is computed by referring to Table B line 4 ME4 of column 6 which shows a tax of
P937.5 on P12,083 plus 25% of the excess (P 14,000 12,083 = P1,917).
P 14,000
12,083
Excess
P 1,917
Tax on P12,083
P 937.50
479.25
P1,416.75
Summary of current regional daily minimum wag rates (Department of Labor and
Employment)
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Requirements in
Contributions
Paying
SSS
Employees
Contributions Collection List also known as SSS Form R-3or R-3 Diskette/USB File
Although there is now a special deadline for SSS payments based on the tenth digit of a
members SSS number, I advise employers to pay like the usual deadline which is on or
before the 10th day of the following month because your employees have different SSS
number and this is much convenient for you and your payroll staff. I also advise to pay to the
SSS branch that handles your companys records to maintain fast and easy access of
records and employees applications concerns. Paying to the SSS branch will save your time
when you will submit your R3 files too although you can also pay SSS contributions online
and to some accredited payment centers like banks.
Fill out 3 copies of SSS Form R5 and make sure all your companys info such as SSS
employers number, company name, type of payor, date of payment, contact number
and amount of remittance for social security contributions and employees
compensation contributions are all correctly written.
Count your cash or money or double-check your check or postal money orders before
paying.
Keep the receipt and have it photocopied for the next step (below)
Once you paid your employees SSS premiums, you are not done yet. You still need to
submit the receipt together with the SSS R3 diskette or USB file and copies of each
months Transmittal Certification and Employee File. If you dont know how to print
these documents, please read How to Use SSS R3 Program and Generate File.
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Prepare photocopies of the SSS R5 (receipt). Prepare 2 copies per month because
Submit your SSS R3 diskette or USB flash drive for posting and uploading of the
collections and contributions. SSS then will save the R3 Collection Monthly List before
they will return your diskette or USB flash drive. They will be in PDF format and you
have to print these out and keep them for your file reference.
This form is submitted monthly together with the SSS form R3 (see form #2 below). It looks
like a bank deposit slip where you will need to write all the information like the following:
Employer No.
Business Name
Business Address
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Business Tin
Type of Payor
After the employer paid the contribution, the bank or the SSS Office will put a stamp on the
R5 form that will served as the employer proof of payment.
This form is submitted monthly or quarterly before the 10th of the following month. If the due
date falls on weekend or Holiday it must be submitted by the first working day after. The
purpose of this form is to submit names of employees and employer contributions to SSS.
1. Fill out 3 copies of SSS Form R5 (see form #1 above) and make sure all the companys
information are all correctly written.
2. Fill out 3 copies of SSS Form R3 (see form #2 above)
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4. Once the contributions are paid, you still need to submit the receipt together with the SSS R3
File in a USB flash drive. This SSS R3 file can be created by the SSS R3 generator which is a
software that can be downloaded in SSS websitehttps://www.sss.gov.ph/sss/index2.jsp?
secid=1&cat=101 This R3 File Generator Program was developed to assist employers in the
preparation of their monthly contributions report. This R3 File generator will help employer to
submit contributions online. It is also an assurance that each employees SSS contribution are
posted properly to their account.
By the way, theres a minimum hardware requirement when downloading R3file Generator:
256 MB memory
CGA Display
JRE 6 or WIndows
------------======================
Where to pay: Payments are accepted at SSS cashier counters, Bayad Centers, SM
Bills Payment Centers, and accredited banks (over the counter or online).
For more info: www.sss.gov.ph
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SALARY LOAN
SSS CONTRIBUTION
CONTRIBUTION
In this post, I will share with you some information and tips on how and where to pay your SSS
contributions as a Voluntary, Self-employed, or OFW member.
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1.
How much should you pay for your SSS Contribution?
Your contribution is based on how much your compensation is. Below is the latest SSS Table of
Contribution of 2015. The minimum contribution for SE (Self-Employed), VM (Voluntary Member),
and OFW (Overseas Filipino Worker) is Php 110 if your compensation ranges from Php 1,000 to Php
1,249; while the maximum is Php 1,760 if it ranges from Php 15,750 and higher.
2.
When to Pay your SSS Contribution?
For Household Employers, Self-Employed, and Voluntary Members except OFW members, you can
pay your contributions on or before the deadline. The payment deadline falls on the month
following the applicable month or quarter.
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For example in my case, since I need to pay my contributions for the previous quarter including
the months of April, May, and June, the payment deadline is in July. What specific date in July?
Heres the guideline.
If the 10th (last) digit of your Social Security Number ends in 1 or 2, the deadline is on
the 10th day of the following month.
If the 10th (last) digit of your Social Security Number ends in 3 or 4, the deadline is on
the 15th day of the following month.
If the 10th (last) digit of your Social Security Number ends in 5 or 6, the deadline is on
the 20th day of the following month.
If the 10th (last) digit of your Social Security Number ends in 7 or 8, the deadline is on
the 25th day of the following month.
If the 10th (last) digit of your Social Security Number ends in 9 or 0, the deadline is on
3.
Where to Pay SSS Contribution as a Voluntary Member?
There are several payment centers and options where you can pay your contributions.
SSS Payment Facilities
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SM Business Centers
I-Remit
Ventaja
4.
Log in to your SSS Online Account (If you dont have it yet, you have to register first.
Click HEREto know how).
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lower
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EMPLOYERS in the private and government sectors may now remit their premium
contributions to the Philippine Health Insurance Corporation (PhilHealth)
electronically.
This development is made possible through the Electronic Premium Remittance
System (EPRS) version 3.1, a facility that was upgraded from being a premium
reporting mechanism to one that will now enable employers to remit premium
contributions online.
Initially, we have partnered with Security Bank for the online premium payment
facility, but we are optimistic that very soon, other accredited collecting agents
(ACAs) will make this facility available for our employer-partners, PhilHealth
President and CEO Alexander A. Padilla said.
The new EPRS will also enable employers to enjoy prompt acknowledgement of
premium payments and immediate posting of their premium contributions.
Through the new EPRS, the process of premium remittance and reporting has
been reduced from six (6) to three (3) steps, namely, updating of employees
remittance status; generation of Statement of Premium Account (SPA); and
selection of ACA to remit premium contributions online.
Once the online payment succeeds, the employer will receive an electronic
PhilHealth Acknowledgement Receipt or ePAR. It will be reflected in the
employers EPRS account and shall serve as the employers proof of premium
payment.
We call on our partner-employers to enrol their accounts now with any of the
ACAs with approved payment facilities so that they can immediately avail
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themselves of the online payment facility in the EPRS, Padilla said. (Faudia H.
Subillaga)
PhilHealth
What to do: Fill out and file PhilHealth Form ME-5. This reflects the amounts
contributed by the employee and employer.
How to compute: The computation changes depending on the salary bracket of
employee. Usually, the employer covers 50% of the payment and the employee
covers the other 50%.
Philhealth, my bill was reduced significantly. On the other side, those members
who dont pay their contribution regularly regret much when unforeseen health
problems occur.
For responsible members just continue with what you are doing, and for those
members who wont pay their contribution maybe, this is the time to change your
mind as it would really benefit you and your dependents in the long run.
IPMs Individually paying members are individuals who render services or sell
goods as a means of livelihood outside of an employer-employee relationship or
as a career. These include professional practitioners including but not limited to
doctors, lawyers, engineers, artists, architects and the like, businessmen,
entrepreneurs, actors, actresses and other performers, news correspondents,
professional athletes, coaches, trainers, and such other individuals.
Quarter A three-month period on a financial calendar that acts as a basis for
the reporting of earnings and the paying of dividends or premiums.
IMPLEMENTING GUIDELINES:
Individually Paying Members (IPM.s) shall pay their premium either of the
following:
SIX HUNDRED PESOS (P600.00) per quarter;
ONE THOUSAND TWO HUNDRED PESOS (P1,200.00) semiannually;
TWOTHOUSAND FOUR HUNDRED PESOS (P2,400.00) per annum
.As quoted from http://www.philhealth.gov.ph/circulars/2010/circ27_2010.pdf
PhilHealth Circular No. 09 series of 2001 provides that in order to institute a
more flexible payment scheme for IPMs, please be informed that the deadline of
payments has been moved to the last working day of the quarter being paid for.
Thus, all payments within the quarter shall be applied on the same quarter within
which the payment is made .
DEADLINE OF QUARTERLY CONTRIBUTION
INCLUSIVE QUARTER
DUE DATE
AMOUNT
JAN-MARCH
P600.00
APRIL-JUNE
P600.00
JULY-SEPT.
P600.00
OCT-DEC
P600.00
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Since the introduction of the Pag-IBIG Fund Law of 2009 (Republic Act 9679),
everyone, including overseas Filipino workers, are entitled by law to be members of
the government housing fund. The main objective of the Pag-IBIG Fund is to provide
affordable home options to Filipinos via a savings initiative.
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To service the needs of its 13.8 million members, HDMF has increased the number of
ways to pay your Pag-IBIG monthly savings or your amortization payments for an
existing home or multi-purpose loan.
3. Bayad Center
There are hundreds of Bayad Centers in Metro Manila that accept Pag-IBIG and other
government contributions. For monthly contributions, your membership identification
number (MID) / registration tracking number (RTN) will serve as your account number.
If you will be paying for your housing amortization, you will need to have your housing
loan monthly billing statement or the SMS reminder to fill out the payment details.
Keep the receipt issued by the Bayad Center outlet, as it will serve as your Pag-IBIG
fund receipt (PFR).
4. SM Business Center
The SM Business Center is the bills and customer service arm of SM Supermalls.
These are usually found on the same floor where the SM Supermarket is located. This
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is convenient for customers who needs to pay bills and shop for groceries all in one
go.
5. Credit Card
You can make payments using your Visa or Mastercard via HDMFs online payment
facility. This can also work with debit cards as long as there are sufficient funds to
make the payment. A minimum convenience fee of P7.20 will be charged for the
monthly payment.
6. Globe G-Cash
Globe is the first company in the Philippines that offers Pag-IBIG members a way to
pay their monthly contributions or housing loan amortizations just about anywhere in
the country. By dialing *143# on your mobile phone, select Pay Bills, and then the
Government option to enter your MID number to make your payments. Make sure that
the details on your G-Cash account is the same as on the information registered on
your MID number. You will receive an SMS notification from Globe once the
transaction went through.
7. Banks
Metrobank only accepts payments for your home loan amortization with Pag-IBIG. For
monthly contributions and loan amortizations on your short-term loans, Pag-IBIG
members can make payments via Union Bank, BPI and Land Banks Internet banking
facilities: Union Bank One Hub, BPI ExpressLink, and Land Bank wePayAccess.
8. Overseas Remittances
Recently, HDMF saw the need to address the concerns of overseas Filipinos workers
(OFWs) who are unable to make periodic monthly payments. OFWs are now given the
option to make annual payments of P1,200 to cover the 12 months in advance, in
place of making monthly contributions. According to the overseas accounts
department of HDMF-POEA (Philippine Overseas Employment Administration), family
members and loved ones of OFWs can also pay for the latters contributions on their
behalf.
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Should OFWs prefer to make the contributions themselves, they can do so via the
following payment channels:
Banks
OFWs can now make payments via Philippine National Bank (PNB), Metrobank, or
Asia United Bankvia their online bill payments systems. PNB can also accept
payments at their New York and Hong Kong branches. OFWs in London can also
make their payments at Allied Bank at Rochester Row.
HDMF accepts monthly contributions via I-Remit and Ventaja. i-Remit has 1,400
offices and has more countries covered in the Asia-Pacific and Middle East regions.
Ventaja can be a preference for OFWs who are working in the US, Canada, and
Australia.
Due Diligence
After making payments to third-party services, you are encouraged to check your
remittances online. You can check your updated contributions via HDMFs E-Services
portal. OFWs have a special verification tab where you can key in your your MID
number, along your first and last name to check your updated contributions.
HDMF said that the posting of the payments are usually dependent on when thirdparty services will submit payments to the agency. You may want to wait for at least 23 business days for the payment to be reflected on your Pag-IBIG account. For
instances that there is a discrepancy with your actual payments to your updated
contributions, it is best to raise this issue with the third party service first before HDMF.
You can also call the Overseas Accounts department based in Makati at landline
numbers 892-0643, 723-7599 or trunkline 812-4731.
Do you have questions about paying your Pag-IBIG contributions that we have left
unanswered? Please let us know by leaving a comment below.
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How to compute Value Added Tax (VAT) payable in the Philippines? Any person or
entity who is engaged in trade, business or in the practice of profession may be
liable to business taxes. Business taxes can be either a Percentage tax or a Value
Added Tax. Furthermore, a taxpayer can be a VAT registered or a Non-VAT
registered taxpayer. In this article, we will tackle how to compute VAT Payable and
file the monthly and quarterly VAT returns.
VAT returns are filed monthly using the Monthly Value Added Tax Declaration
Return BIR Form 2550M and quarterly using the Quarterly Value Added Tax
Declaration Return BIR Form 2550Q. To download forms, please click here to go to
the BIR forms download page.
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Documentary Requirements
1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form No.
2307), if applicable
2. Summary Alphalist of Withholding Agents of Income Payments Subjected to
Withholding Tax At Source (SAWT), if applicable
3. Duly approved Tax Debit Memo, if applicable
4. Duly approved Tax Credit Certificate, if applicable
5. Authorization letter, if return is filed by authorized representative.
Procedures
1. Fill-up BIR Form No. 2550M (for monthly VAT declaration) or 2550Q (for
quarterly VAT declaration) in triplicate copies (two copies for the BIR and one copy
for the taxpayer)
2. If there is payment: File the Monthly VAT declaration, together with the required
attachments, and pay the VAT due thereon with any Authorized Agent Bank (AAB)
under the jurisdiction of the Revenue District Office (RDO)/Large Taxpayers District
Office (LTDO) where the taxpayer (head office of the business establishment) is
registered or required to be registered.
The taxpayer must accomplish and submit BIR-prescribed deposit slip, which the
bank teller shall machine validate as evidence that payment was received by the
AAB. The AAB receiving the tax return shall stamp mark the word Received on
the return and machine validate the return as proof of filing the return and payment
of the tax.
In places where there are no duly accredited agent banks, file the Monthly VAT
declaration, together with the required attachments and pay the VAT due with the
Revenue Collection Officer (RCO) or duly authorized Treasurer of the Municipality
where such taxpayer (head office of the business establishment) is registered or
required to be registered.
The RCO or duly authorized Municipal/City Treasurer shall issue a Revenue
Official Receipt upon payment of the tax.
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3. If there is no payment:
File the Monthly VAT Declaration, together with the required attachments with the
RDO/LTDO/Large Taxpayers Assistance Division, Collection Agent or duly
authorized Municipal/ City Treasurer of Municipality/City where the taxpayer (head
office of the business establishment) is registered or required to be registered.
Deadline
Monthly VAT returns BIR Form 2550M:
Not later than the 20th day following the end of each month (manual filing)
Quarterly VAT returns BIR Form 2550Q:
Within twenty five (25) days following the close of taxable quarter (manual filing)
For EFPS filing, please visit the BIR website for detailed and updated dates of
deadlines.
Reference:
BIR Tax information on Value Added Tax
Sections 105 to 115 of the National Internal Revenue Code of 1997, as amended
How to compute quarterly income tax return in the Philippines for self-employed
individuals? If you are a professional who practice your profession or a selfemployed individual engaged in a sole proprietorship business, you may be looking
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for a guide on how to prepare your BIR Form 1701Q. BIR form 1701Q is filed
quarterly for the first quarter, second quarter and third quarter. For the annual
income tax return, the BIR form 1701 is used. The following are the steps,
procedures, requirements, tips and other important information you need to know
in computing and preparing your quarterly income tax returns.
Step 2.6: Compute your [36] Taxable Income to Date by adding your [35]
Taxable Income for the Previous Quarter/s during the taxable year to
your [34] Taxable Income this Quarter. Take the following guides:
1. For the 1st quarter, you dont have [35] Taxable Income for the Previous
Quarter/ssince it is the beginning quarter of the taxable year.
2. For the 2nd quarter, your [35] Taxable Income for the Previous
Quarter/s is equal to your [34] Taxable Income this Quarter in the 1st
quarter.
3. For the 3nd quarter, your [35] Taxable Income for the Previous
Quarter/s is equal to the total of your taxable [34] Income this Quarter in
the 1st and 2nd quarters or the total [36] Taxable income to Date of the
2nd quarter.
4. There is no 1701Q filed and computed in the fourth quarter. Instead the
annual income tax return (BIR Form 1701) is filed and computed. To learn
how to compute annual income tax for self-employed please read our article
on How to compute income tax in the Philippines for self-employed
individuals.
Step 2.7: Compute your [37] Tax Due using the Graduated Tax Table for
Individuals. You can jump below Step 2.9 to see tax rates table and our sample
computation.
Step 2.8: Compute your [39] Tax Payable by deducting to your [37] Tax Due to
your [38] total tax Credits/Payments for the Quarter, which include [38A/B] Prior
Years Excess Credits, [38C/D] Tax Payment(s) for the Previous Quarter(s), [38E/F]
Creditable Tax Withheld for the Previous Quarter(s), [38G/H] Creditable Tax
Withheld Per BIR Form 2307 for the Quarter, and [38I/J] Tax Paid in Return
Previously Filed (if you are filing an amended return).
Step 2.9: Compute your [41] Total Amount Payable by adding any [40]
Penalties(surcharge, interest and compromise), if there is any. Penalty is charged
for late filing. To learn more about computing penalties, please check our article
How to compute BIR penalties.
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P300,000
300,000
0
300,000
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180,000
120,000
20,000
140,000
60,000
80,000
40,000
120,000
18,500
1,000
3,000
2,000
12,500
12,500
Step 2.11 Put your signature over your printed name. Also fill the Title/Position of
Signatory.
STEP 3: Fill out the details of payment in Part III
Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue District
Office where you registered and present the duly accomplished BIR Form
1701 Q, together with the required attachments and your payment.
Receive your copy of the duly stamped and validated form from the teller of
the AABs/Revenue Collection Officer/duly Authorized City or Municipal
Treasurer.
Proceed to the Revenue District Office where you are registered or to any
Tax Filing Center established by the BIR and present the duly accomplished
BIR Form 1701Q, together with the required attachments.
Receive your copy of the duly stamped and validated form from the RDO/Tax
Filing Center representative.
Page 41 of 86
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Form
No.
Requirement
Deadline for
manual filers
1601-C
1601-E
1601-F
2550M
2551M
2550Q
1701Q
1702Q
- 1st Quarter
April 15 or 15
days after end
of qtr.
- 2nd Quarter
August 15 or 45
days after end
of qtr.
- 3rd Quarter
Nov. 15 or 45
days after end
of qtr.
May 29 or 60
days after end
of each qtr.
- 2nd Quarter
August 29 or 60
days after end
of each qtr.
- 3rd Quarter
Nov. 29 or 60
days after end
of each qtr.
1701
pril 15
1702
2000
WAIVER: Please note that this is just a basic listing and should not be taken as complete or accurate.
Deadlines may change without prior notice. For a more complete and updated listing, please visit the website
of the respective agency concerned.
(Filing and Remittance)
*NOTE:
1.
For Large and Selected Non-Large Taxpayers who are enrolled in the eFPS( Electronic Filing and
Payment System) , the remittance and filing of the basic tax returns is staggered based on the
industry classification of the company.
All other tax forms or tax deadlines not enumerated in the above schedule, please feel free to consult with
us
How to compute SSS contribution in the Philippines? Employers must know how
much employers contribution (ER) they must pay to the Philippine Social Security
System (SSS) for their employers. If youre an employee, you might also ask how
much employees contribution (EE) is deducted, withheld and remitted by
your employer to the SSS from your salary. For self-employed persons, such as
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For Self-employed (SE) persons, Voluntary Members (VM) and Overseas Filipino
Workers (OFW), since they dont have employers, they pay their total SSS
contributions alone. Their total contribution is determined by simply looking at the
last column (SE/VM/OFW Total Contribution) of the schedule based on their
monthly salary /earnings credit range. Thus, if youre self-employed and you earn
P14,000 a month, the total SSS contribution you should remit to the SSS amounts
to P1,456.
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What taxes should you pay in the Philippines? What taxes should self-employed
individuals pay in the Philippines? Self-employed taxpayers are those individuals
who receive income from business or from practice of profession. Persons who
receive mixed income (income from business or practice of profession and income
from compensation) are also considered as self-employed and are also taxed
similarly.
Self-employed individuals include persons who own business in the form of single
proprietorship and practicing professionals (registered or non-registered with the
professional commission), such as accountants, lawyers, doctors, engineers,
architects, artists and even bloggers. If you are one of them, the following are the
ordinary taxes you may be required to pay or remit to the Bureau Internal Revenue
(BIR) .
registered persons. If paid manually (other than EFPS), it should be paid not later
than the 20th day following the end of each month.
To learn more about Percentage Tax, please read our article How to Compute
Percentage Tax Payable in the Philippines.
Note: Taxpayer can either be VAT registered or NON-VAT registered. Thus, he can
be liable to either Percentage Tax or Value Added Tax, but not both.
2. Monthly Value Added Tax (BIR Form 2550M)
This is applicable to persons whose gross annual sales and/or receipt is at least
P1,919,500, persons who are required to register as VAT taxpayers and those who
have opted to duly register as VAT registered taxpayers. The deadline for monthly
VAT is the same with monthly percentage tax.
To learn more about the computation of Value Added Tax payable and filing of the
VAT returns, please read our article titled How to Compute VAT Payable in the
Philippines.
Note:
Monthly VAT returns are not filed on the months that correspond the end of the
quarters (i.e., March, June, September and December). Instead, the taxpayer must
file Quarterly VAT returns which compute the VAT Payable as of the end of the
quarter. Please see #2 of taxes that are paid quarterly.
4. Monthly Remittance Return of Income Taxes Withheld on Compensation
(BIR Form 1601C)
If you have employees, you are required to deduct and withhold taxes on
compensation paid to employees. The return must be filed on or before the 10th
day of the month following the month in which withholding was made. For the
month of December, it must be filed on or before January 15 of the following year.
EFPS may have different deadlines of filing.
5. Monthly Remittance Return of Creditable Income Taxes Withheld
(Expanded) (BIR Form 1601E)
If you are paying for rental, professional services, prime contractors/subcontractors
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the income tax quarter of the taxpayer (i.e. Calendar quarter of Fiscal Quarter).
This return shows the VAT payable at the end of the quarter. Please see #2 of the
taxes that are paid monthly.
3. Quarterly Percentage Tax (BIR Form 2551Q)
This return shall be filed by the following:
a. Franchise grantees sending overseas dispatch, messages or conversation from
the Philippines;and
b. Proprietor, lessees or operators of cockpits, cabarets, night or day clubs, boxing
exhibitions, professional basketball games, jai-alai and racetracks.
The return shall be filed and the tax paid within twenty (20) days after the end of
each taxable quarter.
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Manual filing remains the traditional and most widespread method of submitting
various tax returns for government revenue services in the Philippines. However,
the tax environment is changing rapidly vis--vis the advancement of information
and communication technology (ICT). As web technology is becoming more and
more popular, the introduction of the internet filing has brought fundamental
changes to the method of filing tax returns. In response, the BIR has introduced
two (2) methods of electronic filing (e-filing) of tax returns: (1) Electronic Filing and
Payment System (eFPS); and (2) Electronic BIR Forms (eBIRForms).
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A sample
of reference number for eFPS filing.
If the taxpayer has a tax due to be paid, click the Proceed to Payment button at the
bottom of the FRN page.
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An eFPS
payment form sample.
Click submit. The taxpayers payment instruction is submitted to the bank by
redirecting the control over the participating banks URL.
eFPS
redirection to the banks ePayment facility.
Upon successful payment, a confirmation screen stating that the BIR eFPS has
received the payment transaction will appear, as proof of successful tax payment.
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An
eFPS payment confirmation sample from the BIR.
The Electronic BIR Forms (eBIRForms) was developed primarily to provide noneFPS taxpayers and their accredited tax agents (ATAs) with an accessible and
more convenient service through easy preparation and filing of tax returns and is
mandated under Revenue Regulations No. 6-2014. It consists of the following:
a. Offline Package a tax-preparation software that allows the taxpayers and their
ATAs to prepare tax returns offline with automatic computations and validation
features to lessen human error.
Taxpayers with internet can download the eBIRForm Package from the BIR
website (https://ebirforms.bir.gov.ph). Those without internet may copy the
eBIRForms Package from the BIR RDO e-lounges through USB flash drives.
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The system will store e-filed tax returns for future references.
Easy to use;
e. Enterprise enjoying fiscal incentives (PEZA, BOI, Various Zone Authorities, etc.)
(RR 1-2010);
f. Top 5,000 Individual Taxpayers (RR 6-2009);
g. Corporations with paid-up capital stock of P10 Million and above (RR 10-2007);
h. Corporations with complete Computerized Accounting System (CAS) (RR 102007);
i. Procuring Government Agencies with respect to withholding of VAT and
Percentage Taxes (RR 3-2005);
j. Government bidders (RR 3-2005);
k. Insurance companies and Stock brokers (RMC 71-2004)
l. Large taxpayers (RR 2-2002, as amended); and
m. Top 20,000 Private Corporations (RR2-98, as amended).
2. Electronic BIR Forms (eBIRForms)
RR 6-2014 mandates the use of eBIRForms to the following taxpayers:
a. Accredited Tax Agents / Practitioners and all its client-taxpayers who authorized
them to file on their behalf;
b. Accredited Printers of Principal and Supplementary Receipts / Invoices;
c. One-Time Transaction (ONETT) taxpayers;
d. Those engaged in business, or those with mix income (both compensation and
business income) who shall file a NO PAYMENT return (exception under RMC
12-2015);
e. Government-Owned and Controlled Corporations (GOCCs);
f. Local Government Units (LGUs), except barangays; and
g. Cooperatives, registered with National Electrification Administration (NEA) and
Local Water Utilities Administrations (LWUA).
Are all taxpayers required to electronically file tax returns?
Not all taxpayers are required to file electronically. Only taxpayers enumerated
above are required. However, nothing prevents them from using the eBIRForms /
eFPS facility of the BIR as volunteering taxpayer. The existing procedures on
manual filing shall still apply.
Is using eBIRForms mandatory to all taxpayers?
NO. Only those taxpayers enumerated in RR 6-2014 are mandated to use and
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prepared using the Data Entry Module. In the case of the Summary List of Sales/
Purchases/ Importation for all VAT taxpayers, the same is prepared using the BIR
RELIEF module. All attachments are submitted to the BIR via email to:
esubmission@bir.gov.ph. Validation report of the attachments generated by the
BIR system shall also be included.
Sample validation report of Monthly Alphalist of Payees (MAP):
Sample
validation report of Monthly Alphalist of Payees (MAP).
Sample validation of Summary Lists of Sales and Purchases (SLSP):
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Sample validation of
Summary Lists of Sales and Purchases (SLSP)
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Sample validation of
Summary Lists of Sales and Purchases (SLSP) 2
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Sample
validation of Summary Lists of Sales and Purchases (SLSP) 3
2.
3.
4.
5.
6.
7.
8.
Payment forms.
For the complete list of the BIR Forms, please see this BIR webpage.
What are the penalties for failure to file returns under electronic systems of
the BIR by taxpayers mandatorily covered by eFPS or eBIRForms?
All taxpayers, under the existing issuances, who are mandatorily covered to file
their returns using eFPS or eBIRForms, who fail to do so, shall be imposed a
penalty of P1,000 per return pursuant to Sec. 250 of the NIRC, as amended.
In addition, the taxpayer shall also be imposed with civil penalties equivalent to
25% of the tax due to be paid, for filing a return not in accordance with existing
regulations, thus, tantamount to WRONG VENUE filing pursuant to Section 248 (A)
(2) of the NIRC, as amended.
Finally, RDOs are directed to include non-compliant taxpayers in their priority audit
program.
Are those mandated to e-File but filed manually be penalized?
Yes, under RR 5-2015. If there will be an extension or waiver of penalties, the
same shall be circularized in a revenue issuance.
In relation to RMC 43-2008, when there are technical problems encountered in the
eFPS environment during deadlines for tax filing, the authority for manual filing of
all tax returns of eFPS enrolled taxpayers is given once the Information System
Group (ISG) of the BIR announced thru an official memorandum and posted in the
BIR web and BIR e-mail the unavailability or limited capability of the system on the
deadline date or the date before the deadline. However, taxpayers are still required
to lodge/file via eFPS said declarations/returns, up to the step of getting the Filing
Reference Number (FRN), fifteen (15) days from the date of manual filing to ensure
submission of complete and accurate return data for uploading to the BIR
Intergrated Tax System (ITS).
Can the offline eBIRForms be used even when the taxpayer is enrolled in the
eFPS?
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Yes, all taxpayers enrolled in either eFPS or eBIRForms or those who will file
manually, are encouraged to use Offline eBIRForms for ease and convenience,
and to provide them ample time to encode/edit and complete their returns.
Disclaimer: This article/guide is for general information use only and doesnt
constitute professional advice. Moreover, new and subsequent laws and tax rules
may render whole or part of this article obsolete. If you see any errors, please
contact us to correct them.
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In line with the governments policy of providing fast and convenient manner of
transacting with government offices, the BIR being one of the government
agencies with a very important role in nation building, conceptualized and
introduced eFPS (eFiling and Payment System) in 2001 to make the filing of tax
returns and payment of taxes convenient for taxpayers through a much faster
processing and immediate confirmation of tax returns filed and paid.
With the eFPS, taxpayers can avail of a paperless tax filing experience and can
also pay their taxes online through the convenience of internet-banking service via
debit facility from their enrolled bank account. In addition, since eFPS is available
on the internet, taxpayers can file and pay their taxes anytime and anywhere, at
their own convenience, as long as they are using a computer with secured and
stable internet connection.
eFPS is available to all taxpayers with e-mail account and internet access who are
registered in the BIR Integrated Tax System (ITS). Taxpayers who would like to
avail of the eFPS shall register in accordance with the provisions of the applicable
regulations, circulars and orders.
The following enrollment procedures shall be observed by all qualified taxpayers:
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You can click the eFPS logo to visit the BIRs eFPS page.
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The
eFPS Login Screen.
It is necessary to indicate a VALID EMAIL ADDRESS where the system will send
the VERIFICATION CODE to be supplied in the next portion.
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A prompt that the eFPS Verification Code was sent to your email.
3.3. In the Verification portion of the Enrollment Form, supply the EMAIL
VERIFICATION CODE as stated in the e-mail. Then, input the CAPTCHA CODE
and click on SUBMIT.
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4. If the message box below appears, it means that your TIN is not yet preloaded in the eFPS Registration database. Pre-loading of TIN is one of the prerequisites in the eFPS availment. You must coordinate with your RDO by
submitting a Letter of Intent. Once done, you may fill-up the enrollment form again.
A
prompt in eFPS that the record is accepted, and BIR will be processing the eFPS
enrollment.
BIR Email Notification with the message that the eFPS enrollment is under investigation.
7. Submit all the necessary documents to the respective RDO having the
jurisdiction for account activation.
8. Receive an e-mail notification (within 3 to 10 working days) from
LTAS/RDO-TASS indicating the status of application.
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BIR Email Notification with the message that the eFPS enrollment is activated.
9. When account is activated, taxpayer may start filing tax returns. In addition,
eFPS enrolled taxpayer is required to maintain an online banking facility with any
authorized agent bank (AAB) where he intends to pay through the bank debit
system.
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Sa
mple of the eFPS Challenge Question
The
button enroll more users at the bottom of eFPS user menu.
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6. The online Enrollment Form screen will now be displayed. Take note that
the field for the TIN and the Registered Name of Taxpayer are already pre-filled.
The additional user may now fill-up the enrollment form in accordance with the
same procedures provided for in Number 3 of Scenario 1.
7. After SUBMIT, you may either proceed or cancel your enrollment. If you
click on button, the focus will stay on Step 3 Verification screen.
If you click on the YES button, a message box will appear on the screen
informing you that your enrollment has been received for processing. Click OK to
proceed. User is then returned to the User Menu.
If you have already reached the maximum number of enrollees, the Enrollment
Form will not be accepted.
8. Submit the necessary documents to the respective RDO.
9. Wait for an email notification.
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For more information about eFiling of taxes in the Philippines, please read my
article How to file tax returns online in the Philippines.
Disclaimer: This article/guide is for general information use only and doesnt
constitute professional advice. Moreover, new and subsequent laws and tax rules
may render whole or part of this article obsolete. If you see any errors, please
contact us to correct them. For more information, please visit the Frequently Asked
Questions (FAQ) page of BIRs eFPS or visit the nearest RDO in your area.
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