Withholding Tax for Compensation (Annual/Monthly)

Steps:

1. Identify the Gross Income.

2. Deduct all the mandatory contributions-employee share.
3. Add all the excess amount of the P 90,000 threshold of the De Minimis benefits.
4. Get the Gross Taxable Income.
5. Check on the Tax Table and deduct which Compensation Level does the Gross Taxable
Income belong.
6. Arrive at the Net Taxable Income.
7. Get Prescribed Withholding Tax where the Net Taxable Income fall.
8. Add the product between the Tax Rate falling on the PWT and the Net Taxable Income to
the PWT.
9. Tax Due for the Year/Month.

Pro-Forma Process for the Tax Computation for Compensation

Gross Income XXX

Less: Mandatory Contributions (EE) XXX
Total XXX
Add: Excess Amount of the 90k Threshold
Of the De Minimis Benefits XXX
____
Gross Taxable Income XXX
Less: Compensation Level XXX
Net Taxable Income XXX

Prescribed Withholding Tax XXX

Add: Product after Multiplying Rate of PWT
And the Net Taxable Income XXX
Tax Due XXX

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