WITHHOLDING TAX

SYSTEM
 The Withholding Tax System
The withholding of tax is a system used to
collect tax in advance. Withholding tax is not
an internal revenue tax. The system is used to
equal or at least approximate or collect in full
the tax due from the payee on certain income
payments. The taxes deducted and withheld by
the withholding agent shall be held as a
special fund in trust for the government until
paid or remitted by the withholding agent to
collection officers/banks [Section 58(A), Tax
Code].
 PERSONS REQUIRED
TO WITHHOLD

Individuals engaged in business or practice of professions

Non-individuals (corporations, associations, partnership,

cooperatives), whether engaged in business or not

Government agencies and instrumentalities [e.g., National Government Agencies (NGAs),

Government-Owned or Controlled Corporations (GOCCs), Local Government Units (LGUs), etc.]

All individuals, juridical persons and political parties, with respect to their income payments made
as campaign expenditures and/or purchase of goods and services intended as campaign
contributions
OFFICERS REQUIRED TO DEDUCT AND WITHHOLD
 PROVINCES > PROVINCIAL TREASURER CHIEF ACCOUNTANT GOVERNOR

 CITIES > CITY TREASURER CHIEF ACCOUNTANT CITY MAYOR

 MUNICIPALITIES> MUNICIPAL TREASURER CHIEF ACCOUNTANT MAYOR

 BARANGAY > BRGY. TREASURER CHIEF ACCOUNTANT BRGY.CAPT.

 DEPARTMENTS
 BUREAUS
 AGENCIES > CHIEF ACCOUNTANT HEAD OF OFFICE
 INSTRUMENTALITIES (official holding the highest position)
 GOCCs
 OTHER GOVERNMENT OFFICES
 DUTIES & OBLIGATIONS OF A
WITHHOLDING AGENT

• To register
• To deduct and withhold
• To remit the tax withheld
• To file annual information returns
• To issue withholding tax certificates
 IMPORTANCE OF THE
WITHHOLDING TAX SYSTEM

• Encourage voluntary compliance

• Reduce cost of collection effort
• Prevent delinquencies and revenue loss
• Prevent dry spell in the fiscal standing of
the government by providing stabilized
cash flows throughout the taxable year
 TYPES OF WITHHOLDING TAX

CREDITABLE WITHHOLDING TAX

●
Withholding Tax on Compensation
●
Expanded Withholding Tax (Income Tax)
●
Some Withholding Tax on GMP – Percentage

FINAL WITHHOLDING TAX

●
Final Withholding of Income Tax
●
Some Withholding Tax on Government Money Payments (GMP) –VAT
 Withholding Tax on
Compensation
Relevant Tax Code provisions (Sections 78-83 of
Republic Act 8424 as amended)

Implemented by Revenue Regulations (RR) 2-

98, RR 10-2008, RR 26-2002. RR 5-2011, RR 1-
2013, 1-2014, 1-2015, 3-2015
 WITHHOLDING TAX ON COMPENSATION

The withholding of tax on compensation

income is a method of collecting the income
tax at source upon receipt of the income. It
applies to all employed individuals whether
citizens or aliens, deriving income from
compensation for services rendered in the
Philippines. The employer is constituted as
the withholding agent.
 WITHHOLDING TAX ON COMPENSATION

Requirement: There must be an employer-

employee relationship as defined
under Section 2.78.3 of Revenue
Regulations No. 2-98 (RR 2-98).

Note: Minimum wage earners are no longer subject

to income tax including their statutory
minimum wage, overtime pay, holiday pay,
hazard pay and night shift differential pay
pursuant to RA 9504 as implemented by RR
10-2008.
  GROSS COMPENSATION INCOME

In general, the term “compensation” means

all remuneration for services performed by an
employee for his employer under an employee-
employer relationship, unless specifically
excluded by the Code.
It also includes the cash value of all
remuneration paid in any medium other than
cash.
Kinds of Compensation

Regular Compensation
 Includes Basic Salary

 fixed allowances
• for representation,
• for transportation; and
• others paid to an employee.
However, Representation and Transportation Allowance
(RATA) granted to public officers and employees under the
General Appropriations Act are not subject to withholding
tax and consequently to income tax.

AND THAT, the Personnel Economic Relief Allowance

(PERA) in the amount of P500.00 and the Additional
Compensation Allowance (ACA) in the amount of
P1,500.00 per month received by government personnel
shall be combined and collectively referred to as PERA, in
the amount of P2,000.00, per DBM Budget Circular No.
2009-3, shall not be subject to income tax and
consequently to withholding tax on compensation
pursuant to RR No. 8-2000.
 Kinds of Compensation
• Supplementary Compensation -includes payments to an
employee in addition to the regular compensation as follows:
 Commission
 Overtime pay
 Fees, including director’s fees
 Profit sharing
 Monetized vacation leave in excess of ten (10) days
 Sick Leave
 Fringe benefit received by rank & file employee
 Hazard pay
 Taxable 13th month pay and other benefits
 Other remuneration received from an employee- employer
relationship
Exemptions and Exclusions
from Gross Income
Remuneration received as an incident of employment

 RETIREMENT PAY
 EXEMPT, Retirement benefit received under RA 7641 (for
employers without retirement benefit plan)

 EXEMPT, for employers with retirement benefit plan, if the

following requirements are met:

a. the plan must be reasonable;

b. the benefit plan must be approved by the BIR;
c. the retiring official or employee have been in the service of
the same employer for at least ten (10) years and not less
than fifty (50) years of age at the time of retirement; and
d. the retiring official or employee should not have previously
availed of the privilege under the retirement benefit plan of
the same or another employer.
 SEPARATION PAY
[Sec. 32(B)(6)(b), Tax Code

Any 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
or employee - NOT TAXABLE
 Exemptions cont….

• Benefits received from the GSIS Act

of 1937, as amended, and the
retirement gratuity received by
government officials and employees.

• Benefits received under the Social

Security Act of 1937
  EXEMPTIONS cont….

• 13TH Month pay and other BENEFITS not exceeding

P82,000.00 for the TAXABLE YEAR paid or accrued
beginning January 1, 2015. [RA No. 10653 and
implemented by RR No. 3-2015]
• Thirteenth (13th) month pay equivalent to the
mandatory one (1) month basic salary
• Other benefits such as Christmas bonus, productivity
incentive bonus, loyalty award, gifts in cash or in kind
and other benefits of similar nature actually received
by officials and employees of both government and
private offices.
 EXEMPTIONS cont….

• GSIS, SSS, PHILHEALTH (Medicare),

PAG-IBIG Contributions and Union Dues.
[Section 32(B)(7)(f), of the Tax Code shall
cover only the mandatory/compulsary
contributions of the emloyees to GSIS, SSS,
Medicare and Pag-ibig per RMC 27-2011 and
RMC 53-2011]
 Exemptions… (RA 9504)

• Compensation income of minimum wage

earners (MWE) who works in the private
sector being paid the Statutory Minimum
Wage (SMW), as fixed by Regional
Tripartite Wage and Productivity
Board/National Wage and Productivity
Commission where he/she is assigned.
 Exemptions… (RA 9504)

● Compensation income of employee in

the public sector with compensation
income of not more than the statutory
minimum wage in the non-agricultural
sector applicable to the place where he/she
is assigned.
 Continue….

Including
• Holiday pay
• Overtime pay
• Night Shift differential pay
• Hazard pay
 Hazard pay

The amount paid by the employer to MWEs who were

ACTUALLY assigned to danger or strife torn areas,
disease-infested places, or in distressed or isolated
stations and camps which expose them to great danger
or peril to life.

Any hazard pay paid to MWEs which does not satisfy the
above criteria is deemed subject to income tax and
consequently, to withholding tax.
In case of hazardous employment, the employer shall attach to the Monthly
Return (BIR Form No. 1601-C for return periods March, June, Sept. and Dec., a
copy of Department of Budget and Management (DBM) circular/s, or equivalent, as
to who are allowed to receive hazard pay.
The computation of wages shall be in accordance
with the CBA (if, any) or the provisions of Labor
Code as implemented.

In the determination of the minimum wage on a

monthly basis, the withholding agent shall be
guided by the prevailing minimum wage as
reflected in the latest Matrix of Wage Order and its
own policy on whether:
 FACTORS -
• NOT CONSIDERED PAID ON SATURDAYS AND
SUNDAYS OR REST DAYS – 261 Days

• NOT CONSIDERED PAID ON SUNDAYS OR

REST DAYS – 313 Days

• CONSIDERED PAID ON REST DAYS, SPECIAL

DAYS AND REGULAR HOLIDAYS – 365 Days

• REQUIRED TO WORK EVERYDAY INCLUDING

SUNDAYS OR REST DAYS, SPECIAL HOLIDAYS
AND REGULAR HOLIDAYS – 392.5 Days
 -

• Formula

SMW per day x factor applied

12 months
MWEs receiving other income,
except income subject to final
tax,in addition to compensation
income are not exempted from
income tax for the entire
earnings.
 EXCLUSIONS FROM GROSS INCOME

DE MINIMIS BENEFITS – facilities or

privileges of relatively small value and
are offered or furnished by the
employer merely as means of
promoting the health, goodwill,
contentment, or efficiency of his
employees.

The aforementioned benefits are NOT subject to

income tax as well as from withholding tax on
compensation income of both managerial and
rank and file employees:
 The following shall be considered as “de minimis”
benefits:

a. Monetized unused vacation leave credits of private

employees not exceeding 10 days during the year
b. Monetized value of vacation and sick leave credits paid
to government officials and employees
c. Medical cash allowance to dependents of employees
not exceeding P750.00 per employee per semester
or P125.00 per month.
d. Rice subsidy or one sack of 50 kg. rice per month
amounting to not more than P1,500.00
e. Uniform and clothing allowance not exceeding
P5,000 per annum
f. Actual medical assistance, e.g medical allowance to
cover medical and healthcare needs, annual
medical/executive check-up, maternity assistance, and
routine consultations not exceeding P10,000.00 per
annum
g. Laundry allowance not exceeding P300.00 per month

h. Employees achievement awards e.g. for length of

service or safety achievement, which must be in the
form of a tangible personal property other than cash
or gift certificate with an annual monetary value not
exceeding P10,000.

i. Gifts given during Christmas and major anniversary

celebrations not exceeding P5,000 per employee per
annum.
 De Minimis benefits
j. Daily meal allowance for overtime work and
night/graveyard shift not exceeding 25% of the basic
minimum wage on a per region basis.

k. Benefits received by an employee by virtue of a collective

bargaining agreement (CBA) and productivity incentive
schemes provided that the total annual monetary value
received from both CBA and productivity incentives
schemes combined do not exceed P10,000 per employee
per taxable year (RR 1-2015)
 De Minimis benefits
Note : All other benefits given by employers which are
not included in the above enumeration shall not be
considered as “de minimis” benefits, and hence, shall
be subject to income tax as well as withholding tax on
compensation income. (RR No. 5-2011)
The amount of “de minimis” benefits conforming
to the prescribed ceiling shall not be considered in
determining the P82,000 ceiling of “other
benefits” excluded from gross income. Provided
that, the excess of the de minimis benefits over
their respective ceiling shall be considered as
part of “other benefits” and the employee
receiving it will be subject to tax only on the
excess over the P82,000.00 ceiling. Provided,
further, that employees receiving benefits
exceeding the P82,000 limit shall not be
considered as MWE and therefore shall be
taxable on his entire income.
Health and/or Hospitalization
Insurance premium of employees
not exceeding P2,400/annum or
P200/month whichever is lower and
total family gross income does not
exceed P 250,000 for the calendar
year.
Requirement of Withholding

Every employer must withhold from

compensation paid, an amount computed in
accordance with these regulations. Provided,
that no withholding of tax shall be required on
SMW, including:
-holiday pay
-overtime pay
-night shift differential and
-hazard pay
of MWEs in the private /public sectors as
defined in this Regulations.
 Provided further that an employee who
receives/earns additional compensation such
as commissions, honoraria, fringe benefits,
benefits in excess of the allowable statutory
amount of P82,000.00, taxable allowances and
other taxable income other than SMW,
holiday pay, overtime pay, hazard pay, night
shift differential pay shall not enjoy the
privilege of being MWE and therefore, his/her
entire earnings are not exempt from income
tax and, consequently, from withholding tax.
 Right to Claim Withholding Exemptions

Upon Employment- BIR FORM NO. 1902

Updates - BIR FORM NO. 2305

Personal and additional exemptions

(a) Basic personal exemption - P50,000

(b) Additional exemption - P25,000 for each

QDC Four (4)
 WHO ARE THE QUALIFIED
DEPENDENT CHILDREN
• Legitimate, illegitimate or legally adopted
child chiefly dependent upon & living with
the taxpayer, not more than 21 years old and
not gainfully employed
• A dependent child, although above 21 years
old , may still be qualified a dependent if
such child is incapable of self-support
because he/she is mentally or physically
challenged. Medical certificate is required.
Legend of symbols

Z - Zero Exemption
(a) Employee with multiple employers
simultaneously, with respect to 2nd, third, etc.
(b) Employee who fails to file BIR Form No.
1902 or 2305

S - Single, legally separated spouses/

widow/widower

ME - Married employee
 REVISED WITHHOLDING TAX TABLE
Effective JANUARY 1, 2009

DAILY   1 2 3 4 5 6 7 8
Exemption   0.00 0.00 1.65 8.25 28.05 74.26 165.02 412.54
Status ('000P)
+0% over +5% over +10 % over +15 % over +20% over +25% over +30% over +32% over
A. Table for employees without qualified dependent
             
1. Z 0.0 1 0 33 99 231 462 825 1,650
2. S/ME 50.0 1 165 198 264 396 627 990 1,815
B. Table for single/married employee with qualified dependent child(ren)          
1. ME1 / S1 75.0 1 248 281 347 479 710 1,073 1,898
2. ME2 / S2 100.0 1 330 363 429 561 792 1,155 1,980
3. ME3 / S3 125.0 1 413 446 512 644 875 1,238 2,063
4. ME4 / S4 150.0
1 495 528 594 726 957 1,320 2,145
WEEKLY  
1 2 3 4 5 6 7 8
Exemption   0.00 0.00 9.62 48.08 163.46 432.69 961.54 2,403.85
Status   +0% over +5% over +10 % over +15 % over +20% over +25% over +30% over +32% over
A. Table for employees without qualified dependent
             
1. Z 0.0 1 0 192 577 1,346 2,692 4,808 9,615
2. S/ME 50.0
1 962 1,154 1,538 2,308 3,654 5,769 10,577
B. Table for single/married employee with qualified dependent child(ren)          
1. ME1 / S1 75.0
1 1,442 1,635 2,019 2,788 4,135 6,250 11,058
2. ME2 / S2 100.0
1 1,923 2,115 2,500 3,269 4,615 6,731 11,538
3. ME3 / S3 125.0
1 2,404 2,596 2,981 3,750 5,096 7,212 12,019
4. ME4 / S4 150.0 1 2,885 3,077 3,462 4,231 5,577 7,692 12,500
SEMI-MONTHLY   1 2 3 4 5 6 7 8
Exemption  
0.00 0.00 20.83 104.17 354.17 937.50 2,083.33 5,208.33
Status   +0% over +5% over +10 % over +15 % over +20% over +25% over +30% over +32% over
A. Table for employees without qualified dependent               
1. Z 0.0
1 0 417 1,250 2,917 5,833 10,417 20,833
2. S/ME 50.0
1 2,083 2,500 3,333 5,000 7,917 12,500 22,917
B. Table for single/married employee with qualified dependent child(ren)           
1. ME1 / S1 75.0
1 3,125 3,542 4,375 6,042 8,958 13,542 23,958
2. ME2 / S2 100.0
1 4,167 4,583 5,417 7,083 10,000 14,583 25,000
3. ME3 / S3 125.0
1 5,208 5,625 6,458 8,125 11,042 15,625 26,042
4. ME4 / S4 150.0 1 6,250 6,667 7,500 9,167 12,083 16,667 27,083
MONTHLY   1 2 3 4 5 6 7 8
Exemption  
0.00 0.00 41.67 208.33 708.33 1,875.00 4,166.67 10,416.67
Status   +0% over +5% over +10 % over +15 % over +20% over +25% over +30% over +32% over
A. Table for employees without qualified dependent               
1. Z 0.0 1 0 833 2,500 5,833 11,667 20,833 41,667
2. S/ME 50.0 1 4,167 5,000 6,667 10,000 15,833 25,000 45,833
B. Table for single/married employee with qualified dependent child(ren)           
1. ME1 / S1 75.0
1 6,250 7,083 8,750 12,083 17,917 27,083 47,917
2. ME2 / S2 100.0
1 8,333 9,167 10,833 14,167 20,000 29,167 50,000
3. ME3 / S3 125.0
1 10,417 11,250 12,917 16,250 22,083 31,250 52,083
4. ME4 / S4 150.0 1 12,500 13,333 15,000 18,333 24,167 33,333 54,167
Steps to determine the amount of tax to be withheld

Step 1. Determine the total monetary and non-

monetary compensation paid to an employee for the
payroll period.

Step 2. Segregate the taxable from the non-taxable

compensation income paid to the employee for the
payroll period.

Step 3. Segregate the taxable compensation income as

determined in step 2 into regular taxable
compensation income and supplementary
compensation income.

RATA & PERA granted to public officers and employees under General Appropriations
Act shall not be subject to income tax and consequently to withholding tax.
Step 4. Use appropriate table (daily, weekly, semi-
monthly and monthly.

Step 5. Fix the compensation level

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 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.
 EXAMPLE I: Mr. A, single with no dependent, receives P12,000.00 (net of
SSS/GSIS,PHIC,HDMF employee share only) as monthly
regular compensation and P5,000.00 as supplementary
compensation for a total of P17,000.00.

Regular compensation P12,000.00

Less: compensation level
(line A-2 Column 5) 10,000.00
Excess P 2,000.00
Add: Supplementary compensation 5,000.00
Total P 7,000.00
Tax on P10,000.00 P 708.33
Tax on excess (P7,000 x 20%) 1,400.00
Withholding Tax P 2,108.33
========
MONTHLY 1 2 3 4 5 6 7 8
Exe mption 0.00 0.00 41.67 208.33 708.33 1,875.00 4,166.67 10,416.67
S ta tus (`000P ) +0% ove r +5% ove r +10% ove r +15% ove r +20% ove r +25% ove r +30% ove r +32% ove r
A. Ta ble for e mploye e s without qua lifie d de pe nde nt
1. Z 0.0 1 0 833 2,500 5,833 11,667 20,833 41,667
2. S /ME 50.0 1 4,167 5,000 6,667 10,000 15,833 25,000 45,833
 EXAMPLE I: Mr. A, single with no dependent, receives P12,000.00 (net of
SSS/GSIS,PHIC,HDMF employee share only) as monthly
regular compensation and P5,000.00 as supplementary
compensation or a total of P17,000.00.

Regular compensation P12,000.00

Less: compensation level
(line A-2 Column 5) 10,000.00
Excess P 2,000.00

Tax on P10,000.00 P 708.33

Tax on excess (P2,000 x 20%) 400.00
Withholding Tax P 1,108.33
========
Overtime (P5,000.00 x 20%) P 1,000.00
MONTHLY 1 2 3 4 5 6 7 8
Exe mption 0.00 0.00 41.67 208.33 708.33 1,875.00 4,166.67 10,416.67
S ta tus (`000P ) +0% ove r +5% ove r +10% ove r +15% ove r +20% ove r +25% ove r +30% ove r +32% ove r
A. Ta ble for e mploye e s without qua lifie d de pe nde nt
1. Z 0.0 1 0 833 2,500 5,833 11,667 20,833 41,667
2. S /ME 50.0 1 4,167 5,000 6,667 10,000 15,833 25,000 45,833
 Year-end Adjustment
• On or before the end of the calendar year but prior to the
payment of the compensation for the last payroll period, the
employer shall determine the tax due from each employee on
taxable compensation income for the entire taxable year. The
difference between the tax due for the entire year and the sum
of taxes withheld from January to November shall either be
withheld from his salary in December of the current calendar
year or refunded to the employee, not later than January 25 of
the succeeding year.
 Annualized Withholding Tax
(Year-End Adjustment)

PURPOSE:
Tax due = Tax Withheld

WHEN:
• On or before the end of the calendar year, prior to
the payment of compensation for the last
payroll period.

• If terminated, on the day on which the last

payment of compensation is made.
 Annualized Withholding Tax
(Year-End-Adjustment)

PROCEDURE: [Sec. 2.79(B)(5)(b), RR 2-

98]
STEP 1 - Determine the taxable regular and Supplementary
compensation paid to the employee for the entire
calendar year;

STEP 2 - If the employee has previous employment/s within

the year, add the amount of taxable regular and
supplementary compensation paid to the employee
by the previous employer;
 Annualized Withholding Tax
(Year-End-Adjustment)

STEP 3 - Deduct from the aggregate amount of compensation

computed in Step 2 the amount of basic personal
and additional exemptions of the employee;

Personal Exemptions - P50,000.00

Additional Exemption for

each qualified dependent - P25,000.00
child not exceeding four (4) per child
 Annualized Withholding Tax
(Year-End-Adjustment)

STEP 4 - Deduct the amount of premium payments on

Health and /or Hospitalization Insurance of
employees who have presented proof that
they paid the same during the taxable year.

NOTE: The deductible amount shall not exceed P2,400/

annum or P200/month whichever is lower and
total family gross income must not exceed
P250,000 for the calendar year.
 Annualized Withholding Tax
(Year-End-Adjustment)
Sec. 24(A)
STEP 5 - Compute the amount of tax on the difference arrived
at in Step 4.

Not over P10,000 5%

over P10,000 but not over P30,000 P500 + 10% of the excess over P10,000

over P30,000 but not over P70,000 P2,500 + 15% of the excess over P30,000

over P70,000 but not over P140,000 P8,500 + 20% of the excess over P70,000

over P140,000 but not over P250,000 P22,500 + 25% of the excess over P140,000

over P250,000 but not over P500,000 P50,000 + 30% of the excess over P250,000

over P500,000 P125,000 + 32% of the excess over P500,000

 Annualized Withholding Tax
(Year-End-Adjustment)

STEP 6 - Determine the deficiency or excess, if any,

of the tax computed in Step 5 over the
cumulative tax already deducted and withheld
since the beginning
of the current calendar year.
 Annualized Withholding Tax
Scenarios:

Collectible: Tax due > tax withheld ----- collect before payment of
last wage

Refund: Tax due < tax withheld ----- refund on or before

Jan. 25th of the ff.
year/payment of last compensation

Break even: Tax due = tax withheld ---- do not withhold for
December salary
SUBSTITUTED FILING OF
INCOME TAX RETURN

Under the conditions set forth in RR 3-

2002, RR 19-2002 and RR 19-2011,
employees may no longer required to
file Income Tax Return (BIR Form No.
1700) at his/her option
 Employees Qualified for Substituted Filing

1. Receiving purely compensation income regardless of amount;

2. Working for one employer in the Philippines for the calendar
year;
3. Income tax has been withheld correctly by the employer (TAX
DUE = TAX WITHHELD)
4. The employee’s spouse also complies with all the three
conditions stated above, and
5. Employer filed to BIR the Annual Information Return on
Income Taxes Withheld (BIR Form No. 1604-CF).
NOTE: All of the above requisites must be
present. The Annual Information Return
of Income Taxes Withheld on Compensation
and Final Withholding Taxes (BIR Form
No. 1604-CF) filed by their respective
employers duly stamped “Received” by the
BIR, shall be tantamount to the substituted
filing of income tax returns by said
employees.
Furthermore:

Beginning with the calendar year 2013, those

employees qualified under the substituted filing,
the employer shall furnish each employee with
the original copy of BIR Form No. 2316 and
file/submit to the BIR the duplicate copy not
later than February 28 following the close of the
calendar year (RR No. 11-2013)
 Individuals NOT qualified for substituted filing
and MUST file BIR Form No. 1700

1. Individuals with two or more employers concurrently

and/or successively at anytime during the taxable year.

2. Employees whose income tax has not been withheld

correctly resulting to collectible or refundable return.

3. Individuals deriving other non-business, non-profession

related income in addition to compensation
compensation income not otherwise subject to a final
tax
4. Individuals receiving purely compensation income from
a single employer whose income tax has been correctly
withheld but whose spouse does not qualify for
substituted filing.

5. Non-resident aliens engaged in trade or business in the

Philippines deriving purely compensation income or
compensation income and other non-business, non-
professional-related income.
Individuals NOT qualified for substituted
filing and MUST file BIR Form No. 1700

NOTE: In case of married individuals who are still required

to file returns, only ONE RETURN FOR THE
TAXABLE YEAR SHALL BE FILED by
either of the spouses to cover income of both. It
shall be SIGNED BY HUSBAND AND WIFE
unless physically impossible to do so, in which
case, signature of one of the spouses would
suffice.
 TIME OF WITHHOLDING:
When paid or constructively paid
[Section 2.83.6 of RR 2-98]

Nature of Taxes Withheld:

Creditable against Income Tax Due
 BIR FORMS TO BE USED
IN THE REMITTANCE OF TAX
FORM USED TO REMIT
WITHHOLDING TAX ●
BIR FORM 1601-C
ON COMPENSATION

Due Date ●
JANUARY to NOVEMBER – On or before the 10th day of
the following month
(Manual Filing and ●
DECEMBER – On or before January 15 of the following
payment) year

Due Date Staggered filing based on Industry Classification (RR 26-2002)

●

●
Payment:
●
JANUARY to NOVEMBER – On or before the 15th day of the following

(eFPS) ●
month
DECEMBER – On or before January 20 of the following year
 REMITTANCE OF TAX BY NGAs
●
Remittance of Withholding
Tax thru eTRA (RR 1-2013)
The staggered filing of returns allowed for withholding agents/taxpayers enrolled in
the EFPS facility of the Bureau shall not apply in the case of the NGAs. All returns
must be electronically filed (e-filed) and payment of the tax due must also be made on
the same day the return is e-filed.

Due dates EFPS

The use of eTRA as payment is
limited only to the NGAs’ tax
liabilities arising from the use of
funds coming from the DBM.

JANUARY to NOVEMBER – On or before the

10th day of the following month
DECEMBER – On or before January 15 of
the following
year
Certificate of Income and Tax Withheld on
Compensation (BIR Form No. 2316)

Who shall issue: Employer

When to issue : a) on or before January 31 of the

following calendar year; or

b) on the day of last payment

of compensation if terminated

Number of copies: Three (3) copies

Signed by: : Both employer and employee

(under the penalty of perjury)
66
“Sec. 2.83. STATEMENTS AND RETURNS
Section 2.83.1. Employees Withholding Statements (BIR
Form No. 2316). – In general, every employer or other person
who is required to deduct and withhold the tax on compensation
including fringe benefits given to rank and file employees, shall
furnish every employee from whose compensation taxes have
been withheld the Certificate of Compensation Payment /Tax
Withheld (BIR Form No. 2316) on or before January 31 of the
succeeding calendar year, or if employment is terminated
before the close of such calendar year, on the day on which the
last payment of compensation is made. Failure to furnish the
same shall be a ground for the mandatory audit of payor’s
income tax liabilities (including withholding tax) upon verified
complaint of the payee.

Employers of MWEs are still required to issue BIR Form No.

2316 (June 2008 Encs version) to the MWEs on or before
January 31 of the following year.
 Uses of BIR Form No. 2316

• Proof of financial capacity for purposes of loan,

credit card, or other applications;

• Proof of payment of tax or for availing tax credit

in the employee’s home country;

• Securing travel exemption, when necessary; and

• Other purposes with various government agencies

 Annual Information Return (BIR Form No. 1604-CF) Including the
Alphalist of Employees
REQUIREMENT FOR SUBMISSION
All withholding agents shall, regardless of the number of employees and
payees, whether the employees/payees are exempt or not, submit an
alphabetical list of employees and list of payees on income payments
subject to creditable and final withholding taxes which are required to be
attached as integral part of the Annual Information Returns (BIR Form No.
1604CF/1604E) and Monthly Remittance Returns (BIR Form No. 1601C,
etc.), under the following modes: (RR No. 1-2014)

(1) As attachment in the Electronic Filing and Payment System (eFPS);

(2) Through Electronic Submission using the BIR’s website address at

esubmission@bir.gov.ph; and

(3) Through Electronic Mail (email) at dedicated BIR addresses using

the
prescribed CSV data file format, the details of which shall be issued
in a separate revenue issuance.”
 COMPONENTS OF BIR
ANNUAL INFORMATION
RETURN (BIR FORM 1604-CF)
Part I – Information related to the withholding
agent/employer;

Part II – Summary of Remittances under 1601-C; 1601-F;

1602; and 1603.

Part III – Formats to be followed for the Alphabetical List

of Employees/Payees from whom taxes were withheld
- composed of seven (7) schedules
 SCHEDULES REQUIRED TO
BE ATTACHED IN 1604-CF
Schedule 5 – Alphalist of Payees subject to Final
WithholdingTax

Schedule 6 – Alphalist of Employees other than Rank and

File who were given Fringe Benefits during the year

Schedule 7.1 – Alphalist of Employees terminated Before

December 31

Schedule 7.2 – Alphalist of Employees whose

compensation income are exempt from withholding tax
but subject to income tax
 SCHEDULES REQUIRED TO BE
ATTACHED IN 1604-CF

Schedule 7.3 – Alphalist of Employees as of December 31

with no Previous employer within the year

Schedule 7.4 – Alphalist of Employees as of December 31

with previous employer within the year

Schedule 7.5 – Alphalist of Minimum Wage Earners

 FILING OF ANNUAL
INFORMATION RETURNS

BIR FORM 1604-CF

●
On or before JANUARY 31 following the close of the calendar year