You are on page 1of 15


JUNIO, CPA Notre Dame of Midsayap College Midsayap, Cotabato

Death b.  Examples of involuntary separation: a. Disability d. Company at the brink of bankruptcy .Separation pay  Separation pay is taxable if voluntarily availed of. Reorganization/merger of company e. Sickness c.

age.Pension This is stated allowance paid regularly to a person on his retirement or to his dependents on his death. in consideration of past services. or injury . loss. meritorious work.

not taxable 3. 2. taxable. If paid or availed of as salary of an employee who is on vacation or on sick leave. not taxable . Terminal leave.Vacation and sick leave Rules: 1. Monetized value of 10 days or less.

Thirteenth month pay and other benefits •Not taxable if the total amount received is P30. Any amount exceeding P30. .000 is taxable.000 or less.

Overtime Pay •Premium payment received for working beyond regular hours of work which is included in the computation of gross salary of employee .

.Profit Sharing It is the proportionate share in the profits of the business received by the employee in addition to his wages.

or suggestions to employer resulting in the prevention of theft and robbery .Awards for Special Services  Amount received as an award for special services of employee.

Beneficial payments  Such as where an employer pays the income tax owed by an employee are additional compensation income .

Other forms of compensation  Shares of stock received as compensation  Employee stock option  Cancellation of debt  Insurance premiums as compensation  Income tax paid as compensation .

.GI from Business and Profession Business Defined Business means any commercial activity engaged in as a means of livelihood or profit of an individual or group of individuals. art or science engaged in as a means of livelihood or profit of an individual or group of individuals. Profession Defined Profession is primarily any endeavour or work requiring specialized training in the field of learning.

Merchandising or Trading 3.Servicing 4.Manufacturing 2.Farming 5.Gross Income from Business 1.Long-term contract .

and whether derived from legal or illegal sources.Income from whatever source •Means inclusion of all income not expressly exempted within the class of taxable income under the laws irrespective of the voluntary or involuntary action of the taxpayer in producing the gains. .

Kidnapping c. Extortion d.Income from illegal sources: a.Smuggling e. Gambling b. Embezzlement .

Embezzled funds •Are income without consent (express or implied) with an obligation to repay. .