Professional Documents
Culture Documents
Taxes on
Wages
Objectives
Gain
Nature of WTW
Method
Employer
General Rules
Taxation of Resident Citizen
Taxability:
Income Within
Income Without
Yes
Yes
Php50,000
Php25,000
Max of 4 or Php100,000
Tax Rates
5% - 32%
Compensation Income
Compensation Income
All
TAXABLE INCOME
NON-TAXABLE INCOME
De Minimis Benefits
De Minimis Benefits
Limit
No limit
Php750 per
employee per
semester or
Php125 per month
4. Rice subsidy
Php1,500 per
month or 1 sacj of
50kg rice
De Minimis Benefits
Limit
Not exceeding
Php5,000 per
annum
Php5,000 per
employee per
annum
7. Laundry Allowance
Php10,000 per
annum
Php10,000 per
annum
De Minimis Benefits
Limit
25% of basic
minimum wage
Php10,000 per
annum
Php82,000
Computation of Taxes
Basic Computation
Total Compensation Income
Php500,000
10,000
82,000
18,000
2,400
109,400
390,600
50,000
100,000
Taxable Income
*For health or hospitalization.
Family income must not exceed PhP250,00 annually
Php240,600
Withholding Exemptions
Personal
Exemption:
Php50,000 regardless of status
Additional Exemption:
Php25,000 per dependent child max of 4
Additional Exemptions
Dependent
Child:
Computation Basis
Monthly
Tax Table
Semi-monthly Tax Table
Weekly Tax Table
Daily Tax Table
Annual Graduated Income Tax Table
Monthly
Step1: Determine total compensation
income and segregate gross benefits
Gross Income
Php12,000
Gross Benefits
5,000
Monthly
Step 3: Segregate Taxable Income to
Regular and Supplementary
Regular Taxable
Supplementary
- Basic salary
- Fixed allowances
- Other allowances
Commissions
Overtime Pay
Taxable retirement
Taxable Bonus
Other Taxable benefits
Regular Compensation
Less: Compensation level per table
Php12,000
10,000
Excess
2,000
Add: Supplementary
5,000
Total Excess
7,000
Tax on Php10,000
Tax on Excess (7,000 x 20%)
Withholding Tax
Php708.33
1,400.00
Php2,108.33
Regular Compensation
Less: Compensation level per table
Excess
Php12,000
11,042
958
Add: Supplementary
5,000
Total Excess
5,958
Tax on Php10,000
Tax on Excess (5,958 x 25%)
Withholding Tax
Php937.50
1,489.50
Php2,427.00
Compensation:
Basic Monthly Salary
Overtime pay for November
Php45,000
5,000
45,000
Other Benefits
12,000
98,082.27
Total
Basic (45,000x12mons)
Overtime November
NonTaxable
Php540,000
Php540,000
5,000
5,000
45,000
45,000
Other Benefits
12,000
12,000
602,000
57,000*
TOTAL
Taxable
545,000
But Not
OVER
Amount
Rate
Of Excess
Over
Not Over
10,000
5%
10,000
30,000
500
+10%
10,000
30,000
70,000
2,500
+15%
30,000
70,000
140,000
8,500
+20%
70,000
140,000
250,000
22,500
+25%
140,000
250,000
500,000
50,000
+30%
250,000
500,000
over
125,000
+32%
500,000
Non-Taxable
Total Gross Compensation
Less: Personal Exemption
Additional Exemption
(Php25,000 x 2)
Taxable
Php545,000
Php50,000
50,000
100,000
445,000
Tax Due
First 250,000
In excess of 250,000 x 30%
Total Tax Due
50,000
(195,000 x 30%)
58,500
108,500
98,082.27
10,417.73
TEST
Married with two QDC
Compensation:
Basic Monthly Salary
Php12,000
12,000
Other Benefits
80,000
9,327
But Not
OVER
Amount
Rate
Of Excess
Over
Not Over
10,000
5%
10,000
30,000
500
+10%
10,000
30,000
70,000
2,500
+15%
30,000
70,000
140,000
8,500
+20%
70,000
140,000
250,000
22,500
+25%
140,000
250,000
500,000
50,000
+30%
250,000
500,000
over
125,000
+32%
500,000
Total
Basic (12,000x12mons)
NonTaxable
Php144,000
Taxable
Php144,000
12,000
12,000
Other Benefits
80,000
70,000
10,000
Php236,000
82,000*
154,000
TOTAL
Non-Taxable
Total Gross Compensation
Less: Personal Exemption
Additional Exemption
(Php25,000 x 2)
Taxable
Php154,000
Php50,000
50,000
100,000
54,000
Tax Due
First 30,000
In excess of 30,000 x 15%
2,500
(24,000 x 15%)
3,600
6,100
9,327
Tax Refund
3,227
Administrative Guidelines
BIR FORMS
Forms
Purpose
Deadline
Application for
registration of
employee
10 or 30 days from
date of
employment
Certificate of
Update of
Exemption and of
Employers and
Employees
Information
10 or 30 days after
the change
Forms
Purpose
Deadline
Withholding Tax
on Wages
Annual WTW
January 31
Proof of
withholding tax
payment
On or before
January 31.
February 28 to BIR
Annual Income
Tax Return
April 15
Substituted Filing
Form
Substituted Filing
Qualified:
a.
b.
c.
d.
e.
f.
Timing of Withholding
Section
Compensation is paid
Compensation is payable
Compensation is accrued (recorded)