CHAPTER 33: WITHHOLDING ON WAGES

 Terms defined
A. Wages
- All remuneration (other than fees paid to a public official) for services
performed by an employee for his employer, including the cash value
off all renumeration paid in any medium other than cash, except that
such term shall not include renumeration paid
o For agricultural labor paid entirely in products of the farm
where the labor is performed
o For domestic service in a private home
o For casual labor not in the course of the employee’s trade or
business
o For services by a citizen/resident of the PH for a foreign
government or international organization
- If the remuneration paid by an employer to an employee for services
performed during ½ or more of any payroll period of not more than 31
consecutive days constitute wages
o All the renumeration paid by such employer to such employee
for such period shall be deemed wages
- Renumeration paid by an employer to an employee for services
performed during more than ½ of any such payroll period does not
constitute wages
o None of the remuneration paid by such employer to such
employee shall be deemed to be wages
B. Payroll period
- Period for which payment of wages is ordinarily made to the employee
by his employer
- Miscellaneous payroll period
o Payroll period other than a daily, weekly, biweekly, semi-
monthly, monthly, quarterly, semi-annual or annual period
C. Employee
- Any individual who is the recipient of wages and includes an officer,
employee, or elected official of the Gov’t of the PH or any political
subdivision, agency, or instrumentality thereof
- Includes an officer of the corporation
D. Employer
- Person for whom an individual performs or performed any service, of
whatever nature, as the employee of such person except that
o If the person for whom the individual performs or performed
any service does not have control of the payment of the wages
for such services
o In the case of a person paying wages on behalf of a non-resident
alien individual, foreign partnership or foreign corp. not
 engaged in trade or business within the PH – employer means
such person
 Income tax collected at Source
o Requirement of Withholding
 Every employer making payment of wages shall deduct and withhold upon such
wages a tax
 Notes
 Backwages, allowances, and benefits awarded in a labor dispute
o Subject to withholding tax on wages
o There are times when the judgment awarded in a labor dispute
is enforced through garnishment of debts due to the employer
or other credits to which the employer is entitled
 Garnishes are authorized to deduct and withhold the
income tax due from backwages, allowances and
benefits to be paid to the employees and are liable for
such deductions
 No withholding of tax shall be required on statutory minimum wage
(SMW) including holiday pay, overtime pay, night shift differential and
hazard pay of Minimum wage earners (MWEs) in the public/private
sectors
o However, employee who receives additional compensation such
as
 Commissions
 Honoraria
 Fringe benefits
 Benefits in excess of the allowable statutory amount of
90,000
 Taxable allowances
 Other taxable income other than SMW, holiday pay,
overtime pay, night shift differential and hazard pay,
shall still enjoy the privilege of being an MWE
 MWE remains to be entitled to exemption
 Any taxable income they receive other than as
MWEs may be subjected to the appropriate
taxes
 When an MWE receives other income (income
from the conduct of trade, business or practice
of profession, except income subject to final
tax)
o Only this other income shall be subject
to income tax and withholding tax
o Compensation received as MWE shall
be exempt from both the income tax
and withholding tax
  Representation and Transportation Allowance (RATA) & Personal
Economic Relief Allowance (PERA)
o Granted to public officers and employers under the General
Appropriations Act (RATA)
o Constitute reimbursement for expenses incurred in the
performance of a government personnel’s official duties (PERA)
 Shall be subject to income tax and consequently
withholding tax
 Taxable fringe benefits received by employees holding
managerial/supervisory positions
o Subject to a final fringe benefit tax
o Shall not form part of the taxable supplementary compensation,
of managers and supervisors, subject to withholding tax
o Tax paid by recipient
 If the employer, in violation of the provisions of this chapter, fails to deduct and
withhold the tax as required under this chapter
 And thereafter, the tax against which such tax may be credited is paid
o Tax so required to be deducted and withheld shall not be
collected from the employer
 Note: in no case relieve the employer from liability for any penalty/addition to
the tax otherwise applicable in respect of such failure to deduct and withhold
o Refunds or Credits
 Employer
 When there has been overpayment of tax, refund or credit shall be
made to the employer only to the extent that the overpayment was not
deducted and withheld hereunder by the employer
 Employees
 Amount deducted and withheld during any calendar year shall be
allowed as a credit to the recipient of such income against the tax
imposed under Sec. 24A of the Title II of Tax Code
 Refunds and credits in cases of excessive withholding shall be granted
under rules and regulations promulgated by Sec. of Finance, upon
recommendation of Commissioner
 Any excess of the taxes withheld over the tax due from the taxpayer
 Shall be returned/credited within 3 months from the 15 th day of April
 Refunds/credits made after such time shall earn interest at the rate of
6% per annum, starting the lapse of 3-month period to the date the
refund of credit is made
 Refunds shall be made upon warrants drawn by the Commissioner or by his duly
authorized representative without the necessity of counter-signature by the
Chairman, Commission on Audit or the latter’s duly authorized representative
o Withholding on Basis of Average wages
 Commissioner may, under rules and regulations promulgated by the Secretary
of Finance, authorize employers to:
  Estimate the wages which will be paid to an employee in any quarter of
the calendar year
 Determine the amount to be deducted and withheld upon each
payment of wages to such employee during such quarter as if the
appropriate average of the wages so estimated constituted the actual
wages paid
 Deduct and withhold upon any payment of wages to such employee
during such quarter such amount as may be required and withheld
during quarter
o Non-resident Aliens
 Wages paid to non-resident alien individuals engaged in trade or business in the
PH shall be subject to the provisions of Chapter XIII (Withholding on Wages) of
Title II of the Tax Code
o Year-end adjustment
 On or before the end of calendar year prior to payment of the compensation for
the last payroll period
 Employer shall determine the tax due from each employee on taxable
compensation income for the entire taxable year in accordance with
Sec. 24A of Tax Code
 Difference between the tax due from each employee for the entire year and the
sum of taxes withheld from January to November
 Shall either be withheld from his salary on December of the current
calendar year or refunded to the employee not later than January 25 of
the succeeding year
 Penalties for Non-Compliance
o Employer
 Employer shall be liable for the withholding and remittance of correct amount
of tax required to be deducted and withheld
 If employer fails to withhold and remit the correct amount of tax as required to
be withheld
 Such tax shall be collected from the employer together with the
penalties/additions to the tax otherwise applicable in respect to such
failure to withhold and remit
 Any employer/withholding agent who fails, or refuses to refund excess
withholding tax not later than Jan. 25 of the succeeding year
 Shall, in addition to any penalties provided in the Tax Code, be liable to
a penalty equal to the total amount of refund which was not refunded
to the employee resulting from any excess of the amount withheld over
the tax actually due on their return
o Employee
 If an employee fails/refuses to file an Application of Registration (BIR Form No.
1902), or the Certificate of Update of Exemption and of Employer’s and
Employee’s Information (BIR Form No. 2305) together with the attachments or
willfully supplies false or inaccurate information
  Tax otherwise required to be withheld by the employer shall be
collected from him including penalties/additions to the tax from due
date of remittance until date of payment
 On other hand, excess taxes withheld made by the employer due to
o Willful failure/refusal to file either BIR Form No. 1902or BIR
Form N0. 2305
o Willful supplying of false and inaccurate info.
 Shall not be refunded to the employee but shall be
forfeited in favor of the Gov’t
 Filing of Monthly Return and Payment of Taxes Withheld
o Every person required to deduct and withhold the tax on compensation, including Large
taxpayers
 Shall make a return and pay such withholding tax on or before the 10 th day of
the month following the month which the withholding was made
 Return (BIR Form No. 1601C) shall be filed with and tax paid to any AAB within
the RDO or in places where there are no AABs to the RDO or in places where
there are no AABs, to the RDO of the City or municipality where the withholding
agent/employer’s legal residence or place of business/office is located
o Taxes withheld from the last compensation (December) for the calendar year
 Be paid not later than Jan. 15 of the succeeding year
o With respect to taxpayers who avail of the eFPS
 Deadline for electronically filing shall be in accordance with the rules and
regulations promulgated for the eFPS
 After eFiling, such taxpayers shall proceed to online payment by clicking the
“Proceed to Payment” button to remit the taxes due
o Note: Required Attachment
 In case of hazardous employment
 Employer in private sector shall attach to BIR Form No. 1601-C for
return periods March, June, September and December a copy of the list
submitted to the DOLE Regional/Provincial Offices-Operations
Divisions/Unit
o List shall show the names of the Minimum Wage Earners who
received the hazard pay, period of employment , amount of
hazard pay per month and justification for payment of hazard
pay as certified by said DOLE/allied agency that the hazard pay
is justifiable
o In the same manner, the aforementioned return periods, an
employer in the public sector shall attach a copy of Department
of Budget and Management circulars or equivalent as to who
are allowed to receive hazard pay
 Requirement of Deductibility of Compensation paid by employer
o Any income payment which Is deductible under the Tax Code
 Allowed as deduction of the payor’s gross income only if it shown that the
income tax required to be withheld has been paid
 o Compensation income where no income taxes were withheld
 Shall be allowed as deduction from an employers’ gross income when the
required employees’ withholding statement have been issued to the subject
employees on or before January 31 of the succeeding year in which the
compensation was paid
 In cases where there is termination of employment
o On the day on which the last payment of wages is made
 Provided further that the Alphabetical List “Alphalist” of the subject
employees, including the Minimum Wage Earners has been submitted
under BIR Form No. 1604-CF (Annual Information Return of Income Tax
Withheld on Compensation and Final Withholding Taxes) on or before
January 31 of the year following the calendar year in which the
compensation payments were paid or accrued
 Note:
o Taxpayer cannot claim the compensation expenses as
deductions for income tax purposes if he fails to file the
alphalist or fails to resubmit the complete and corrected
alphalist after the validation process conducted by the BIR
 Taxes Withheld are Trust Funds
o Taxes deducted and withheld by the employers shall be held in a special fund in trust for
the Government until the same are paid to the said collecting officers
 Return and Payment in Case of Government Employees
o If the employer is the Gov’t of the PH or any political subdivision, agency or
instrumentality thereof
 Return of the amount deducted and withheld upon any wage shall be made by
the officer/employee having control of the payment of such wage or by any
officer/employee duly designated for the purpose
 Statements and Returns
o Requirements
 General: Every employer required to deduct and withhold a tax on
compensation including fringe benefits given to rank and file employees
 Shall furnish every employee from whose compensation income taxes
have been withheld the Certification of Compensation Payment/Tax
Withheld (BIR Form No. 2316) on or before January 31 of the
succeeding year
 If employer is terminated before the close of such calendar year
o Said BIR Form No. 2316 shall be furnished to the employee on
the day on which the last payment of compensation is made
 Employers of MWEs are still required to issue BIR Form no. 2316 to MWEs on or
before Jan. 31 of the ff. year
 Failure to furnish BIR Form No. 2316 to the employees
 Ground for mandatory audit of the employer’s income tax liabilities
(including withholding tax) upon verified complaint of the employees
 BIR Form No. 2316 shall contain the following information:
  Names, addresses and TIN of the employer
 Name, address and TIN of the employee
 Sum of compensation paid including non-taxable benefits
 Amount of SMW, overtime pay, holiday pay, night shift differential pay
and hazard pay received by MWEs
 Amount of tax due, and amount of tax withheld during the calendar
year
 Such other information required
- In case of successive employments during the taxable year
o Extra copy of the BIR Form No. 2316 duly certified by him and
his previous employers shall be furnished by the employee to
his new employer
o Annual Information Returns
 Every employer required to deduct and withhold the tax is required to file with
the Large Taxpayers Assistance Division (LTAD), Large Taxpayers Division Office
(LTDO) or RDO where the employer is registered as withholding agent
 On or before January 31 of the following year an Annual Information
Return of Income Taxes Withheld on Compensation and Final
Withholding Taxes (BIR Form No. 1604-CF)
 Shall be submitted with the Alphabetical List of Employees
 BIR Form No. 1604-CF
 Must show among others, the withholding agent’s registered name,
addresses and TIN
 Alphalist of Employees must show the ff.:
 Name and TIN of employees
 Gross compensation paid by present and previous employers of the
calendar year
 Taxable 13th month pay/other benefits for rank and file employees
 Taxable fringe benefits for managerial employees
 Non-taxable SMW, overtime pay, holiday pay, night shift differential pay
and hazard pay
 Taxes required to be withheld under Section 24A of the Tax Code
 Taxes actually withheld by all employers for the calendar year
 All withholding agents/employers shall regardless of the total absence of
operational transactions during the year or the number of employees, whether
the employees are exempt or not
 Submit the Alphalist of Employees required to be attached to BIR Form
No. 1604-CF via the following modes:
o As attachments in the Electronic Filing and Payment System
(eFPS)
o Through electronic submission using the BIR’s website
o Through email at dedicated BIR addresses using the prescribed
CSV data file format
 Substituted filing
 BIR Form No. 2316
o Contain certification that the employer’s filing of BIR Form no.
1604-CF shall be considered as substituted filing of the
employee’s income tax return
 To the extent that the amount of compensation and tax
withheld appearing in the BIR Form no. 1604-CF is
consistent with the corresponding amounts indicated in
BIR Form no. 2316
 Note:
o Under Sec. 51A of the NIRC
 Certificate of Withholding filed by the employer duly
stamped “RECEIVED” by the BIR shall be tantamount to
the substituted filing of income tax returns by said
employees
o In cases covered by substituted filing, employer shall furnish
each employee with the original copy of BIR Form no. 2316
 Employer shall also file with the BIR a duplicate copy
not later than Feb. 28 following the close of the
calendar year in the following manner:
 For taxpayers registered with Large Taxpayers
Service (LTS), the BIR Form 2316 shall be
submitted in soft copies (PDF) with filenames
alphabetically arranged in a DVD-R
o Shall be submitted with a notarized
certification duly signed by the
authorized representative of the
taxpayer certifying that the soft copies
contained in the DVD-R are the
complete and exact copies of originals
o USBs may be used in the absence of
DVDs
 Scanned copies of forms shall
be made in uneditable format
 Non-LTS taxpayers shall have the option to
submit hard copies of the BIR forms 2316
o Once said taxpayer begins to submit the
BIR Form 2316s in soft copies, they shall
no longer be allowed to submit the said
forms in hard copies
 BIR Form no. 2316, duly certified by both employee and
employer shall serve the same purpose as if a BIR Form
No. 1700 has been filed
 Such as proof of financial capacity for purposes
of loan, credit card or other applications or for
 the purpose of availing tax credits in the
employee’s home country, or for other
purposes with various government agencies
 Information referring to the certification appearing at
the bottom of BIR shall not be signed by both employer
and employee
 If the latter is not qualified for substituted filing
o Extension of time
 Commissioner, under such rules and regulations as may be promulgated by
Secretary of Finance
 May grant to an employer a reasonable extension of time to furnish and
submit the required statements and returns
 Exemptions from Withholding Tax on Compensation
o Exempted from withholding tax on compensation but may be subject to income tax
depending on the nature/source of income earned by the individual recipient
 Renumerations received as an incident of employment
 Retirement benefits and those received by officials and employees of
private firms, whether individual or corporate, under a reasonable
private benefit plan maintained by the employer
 Amount received by an official/employee or by his heirs from the
employer due to death, sickness or other physical disability or for any
cause beyond the control of the said official/employee such as
retrenchment, redundancy or cessation of business
 Social security benefits, retirement gratuities, pensions and other
similar benefits received by resident or non-resident citizens of the
Philippines or aliens who come to reside permanently in the PH from
foreign gov’t agencies and other institutions, private or public
 Payments of benefits due or to become due to any person residing in
the PH under the law of the United States administered by the United
States Veterans Administration
 Payment of benefits made under the SSS Act of 1954
 Benefits received from the GSIS Act of 1937 and the retirement gratuity
received by gov’t officials and employees
 Renumerations paid for agricultural labor
 Renumeration for services which constitute agricultural labor and paid
entirely in products of the farm where the labor is performed is not
subject to withholding
o Agricultural labor
 Does not include services performed in connection with
forestry, lumbering or landscaping
 Remuneration paid entirely in products of the farm where the labor is
performed by an employee of any person in connection with any of ff.
activities is excepted as remuneration for agricultural labor:
o Cultivation of soil
 o Raising, shearing, feeding, caring for, training or management of
livestock, bees, poultry or wildlife
o Raising/harvesting of any agricultural/horticultural commodity
 Farm
o Not limited to stock, dairy, poultry, fruits and duck farms,
plantations, ranches, nurseries, orchards and such greenhouse
and other similar structures
 Renumeration paid entirely in products of the farm where the labor is
performed by an employee in the employ of a farmer or farmers’ cooperative,
organization, or group in the handling, planting, drying, packing, packaging,
processing, freezing, grading, storing or delivering to storage or to market or to
carrier for transportation to market, of any agricultural or horticultural
commodity produced by such farmer or farmer-members of such organization
or group
 Excepted as remuneration for agricultural labor
 If performed for commodities produced by persons other than such
farmer or members of such farmers’ organization or group
o Not considered as an incident to ordinary farming operations
o Notes
 Remuneration paid entirely in products of the farm where the labor is
performed for the ff. services in the employ of the owner/tenant/other operator
of one or more farms
 Not considered as remuneration for agricultural labor, provided the
major part of such services is performed on a farm
o Services performed in connection with the operation,
management, conservation, improvement or maintenance of
any such farm/its tools/equipment
 May include services performed by carpenters, painters,
mechanics, farm supervisors, irrigation engineers,
bookkeepers and other skilled or semi-skilled workers
who contribute in any way to conduct of the farm or
farms operated by person employing them as
distinguished from any other enterprise in which such
person may be engaged
 Services performed in salvaging timber, or clearing land
brush and other debris left by a hurricane or typhoon
o Note: The services must be performed in the employ of the
owner/tenant/other operator of the farm
 Exception does not extend to remuneration paid for
services performed by employees of a commercial
painting concern (ex. Contracts w/ farmer to renovate
his farm properties)
  Renumeration paid entirely in products of the farm where the labor is
performed by an employee in the employ of any person in connection with any
of the ff. operations
 Not considered as remuneration for agricultural labor w/o regard to the
place where such services are performed:
o Making of copra, stripping of abaca
o Hatching of poultry
o Raising of fish
o Operation/maintenance of ditches, canals, reservoirs or
waterways, used exclusively for supplying/storing water for
farming purposes
o Production/harvesting of crude gum from a living
tree/processing of such crude gum into gum spirits or
turpentine and gum resin
 Such processing is carried on by the original producer of
such crude gum
 All payments (cash or other forms other than products of the farm where the
labor is performed) for services constituting agricultural labor
3. Remuneration for domestic services

o Remuneration paid for services of a household nature performed by an employee in or

about the private home of the person by whom he is employed
 Not subject to withholding
o Private home
 Fixed place of abode of an individual/family
o Services of a household nature in or about a private home
 Services rendered by cooks, maid, butlers, valets, laundresses, gardeners and
chauffeurs of automobiles for family use
o Notes
 Services of household personnel furnished to an employee (except rank and file
employees) by an employer
 Subject to the fringe benefits tax (Sec. 33 of the Tax Code)
 If home is utilized primarily for the purpose of supplying board or lodging to the
public as a business enterprise
 It ceases to be a private home
 Remuneration paid for services performed therein is not exempted
 Above-enumerated services which are performed in or about rooming or
lodging houses, boarding houses, clubs, hotels, hospitals or commercial
offices/establishment
 Considered as compensation
 Remuneration paid for services performed as a private secretary even if they are
performed in the employer’s home
 Considered as compensation
4. Remuneration for casual labor not in the course of an employer’s trade or business

 Casual Labor
o Labor which is occasional, incidental or irregular
o Not in the course of the employer’s trade/business
 Labor that does not promote or advance the trade or business of the employer
o Any remuneration paid for labor which is occasional, incidental or irregular and does not
promote or advance the trade or business of the employer
 Not considered as compensation
o Notes
 Any remuneration paid for casual labor but which is rendered in the course of
the employer’s trade or business
 Considered as compensation
 Any remuneration paid for casual labor performed for a corporation
 Considered as compensation

5. Compensation for services by a citizen or resident of the PH for a foreign government or international
organization

 Remuneration paid for services performed as an employee of a foreign government or

international organization
o Exempted from withholding
o This includes remuneration paid not only for services performed by ambassadors,
ministers, and other diplomatic officers and employees but also for services performed
as consular or other officer or employee of a foreign government or as a non-diplomatic
representative of such government
 Note:
o Foreign government, embassies, diplomatic missions, and international organizations
situated in the PH
 Acting as employers enjoy immunity from collecting or withholding taxes on the
salaries and emoluments of their employees, whether they are foreigners or
Philippine nationals
 Basis: International comity as embodied in several international agreements to
which the Philippines is a signatory
 Vienna Convention for International Relations (for embassies and
diplomatic missions)
 Convention on the Privileges and Immunities of United Nations
 Convention on the Privileges and Immunities of Specialized Agencies
(for the various agencies of UN)
 Asian Development Bank Headquarters Agreement
 Articles of Agreement of the International Finance Corporation
 Sec. 2.78.1 of Rev. Reg. No. 2-98
 Reiterates the exemption from the withholding tax system of the
remunerations being paid by foreign governments and international
 organizations to their employees who are residents or nationals of the
PH
o Includes not only remuneration paid for services performed by
ambassadors, ministers and other diplomatic officers and
employees but also remuneration paid for services performed
as consular or other officer or employee of a foreign
government or as a non-diplomatic representative of such
government
 Exemption from withholding taxes does not equate to the exemption from
paying income tax itself
 Employees of such entities who are not tax-exempt by the provisions of
applicable international agreements or laws
o Not relieved of their duty to report their compensation income
to the BIR and pay the taxes due thereon

6. Damages

 Actual, moral, exemplary, and nominal damages received by an employee/his heirs

o Pursuant to a final judgment or compromise agreement arising out of or related to an
employer-employee relationship

7. Life Insurance proceeds

 Proceeds of life insurance policies paid to heirs or beneficiaries upon the death of insured,
whether in a single sum or otherwise
o Exempt from withholding
 Interest payments agreed under the policy for the amounts which are held by the insured under
such agreement
o Included in gross income

8. Amounts received by the insured as a return of premiums

 Amounts received by the insured as a return of premiums paid by him under life insurance,
endowment or annuity contracts either during the term or at the maturity of the term or upon
surrender of contract

9. Compensation for injuries or sickness

 Amounts received through accident/health insurance or under Workmen’s Compensation Acts,

compensation for personal injuries or sickness plus the amount of any damages received
whether by suit or agreement on account of such injuries or sickness

10. Income exempt under treaty

 Income of any kind to the extent required by any treaty obligation binding upon the Gov’t of PH

11. 13th month pay and other benefits

  13th month pay equivalent to the mandatory 1 month basic salary of officials and employees of
the government (whether national or local) including GOCC and of private offices received after
the 12th month pay
 Other benefits such as Christmas bonus, productivity incentives, loyalty awards, gifts in cash or
in kind and other benefits of similar nature actually received by officials and employees of both
government and private offices
o Includes Additional Compensation Allowance granted and paid to all officials and
employees of the National Government Agencies, including state universities and
colleges, GOCCs, government financial institutions and LGUs
 Above-stated exclusions under a and b shall cover benefits paid or accrued during the year
o Provided that total amount shall not exceed 90,000 pesos
 May be increased through rules and regulations issued by the Secretary of
Finance, upon recommendation of the Commissioner, after considering among
others, the effect on the same on the inflation rate at the end of the taxable
year

12. GSIS, SSS, Medicare and other contributions

 GSIS, SSS, Medicare and Other Pag-ibig contributions and union dues of individual employees
 Exemption from withholding covers only the mandatory/compulsory contributions of employees
to the SSS, GSIS, PHIC and HDMF

13. Compensation income of MWEs who work in the private sector and being paid the Statutory
Minimum Wage (SMW) as fixed by the Regional Tripartite Wage and Productivity Board
(RTWPB)/National Wages and Productivity Commission applicable to the place where she is assigned
> as well as compensation of employees in the public sector who are paid not more than the SMW
applicable to the non-agricultural sector, as fixed by the RTWPB/NPWC applicable to the place where
he/she is assigned

 Notes:
o SMW
 Rate fixed by the Regional Tripartite Wage and Productivity Board as defined by
the Bureau of Labor and Employment Statistics of DOLE
 RTWPB of each region shall determine the wage rates in the different regions
based on the established criteria and shall be the basis of exemption from
income tax for this purpose
 NPWC shall officially submit a Matrix of Wage Order by region and any changes
thereto
 10 days after its effectivity to the Assistant Commissioner, Collection
Service, for circularization in the BIR
o Holiday pay, overtime pay, night shift differential pay and hazard pay earned by an MWE
 Likewise be covered by exemption
o Additional compensation such as commissions, honoraria, fringe benefits, benefits in
excess of allowable statutory amount of 90,000, taxable allowances and other taxable
income given to an MWE by the same employer
 Subject to withholding tax using the withholding tax table
  MWEs receiving other income from other sources in addition to compensation
income
 Income from other concurrent employers from the conduct of trade,
business or practice of profession except income subject to final tax
o Subject to income tax only to the extent of income other than
SMW
 Any income subject to income tax may be subject to withholding tax
 Income exempt from income tax is consequently exempt from
withholding tax
 Income not subject to withholding tax does not necessarily mean that it
is not subject to income tax
 Any reduction/diminution of wages for purposes of exemption from income tax
(and from withholding) shall constitute misrepresentation and therefore, shall
result to the automatic disallowance of the expense
 Offenders may also be criminally prosecuted under existing laws

14. Compensation during the year not exceeding 250,000