What Is Annualized Witholding Tax (Alphalist)?

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Created June 2, 2015
Author Jeric Bernabe
Category Philippine Payroll Regulations and Information

What is an Alphalist?
The AlphaList report generates an alphabetical list of employees who have paid tax in line
withPhilippine Revenue Regulations 10-08: (Source: BIR)
This report also contains information on taxes deducted by employers from their employees
wages. It also includes the computations for tax refund and tax payable at the end of the
year.

Tax Payable: If total tax due > total tax collected for the year

Tax Refund: If total tax due < total tax collected for the year

Break even: If total tax due = total tax collected for the year

The Alphalist contains 3 documents

1.

Alphabetical list of employees from whom taxes were withheld (BIR Format) :
The report divides the information into the following categories:

Employees with no previous employers during the financial year

Employees with previous employers during the financial year

Employees terminated before the end of the financial year

2.

BIR 1604CF: This return shall be filed in triplicate by every employer and shall be
filed on or before Jan 31 of the year following the calendar year

3.

CD/USB Submission Ten (10) or more numbers of employees, the employers are
required to submit this reports with BIR in soft copies. A new data entry and validation
module (version 3.4) is already available which can be downloaded on the BIR website to

comply with the BIR file format. Click here to download the module. Note: This can only be
used in Windows OS as it is a .exe format.

How to compute Annualized

Withholding Tax?
A. Employees with no previous employers during the
financial year
Sample Scenario : John, married with 2 qualified dependent children received the following
compensation for the year:
Basic Monthly Salary : ( P45,000 X 12 months) P 540,000
SSS/Philhealth for the year: Php 11,400.00
Overtime Pay for the year : P5,000
13th month Pay for the year : P45,000
Other Benefits for the year : P12,000
Withholding Tax (Jan-Dec) : P118,082.00

Heres how to compute Johns Net Taxable Compensation:

Total Gross Compensation*

P 602,000.00

Less: SSS / Philhealth / Pag-Ibig:

(P 11,400.00)

Less: Non Taxable Allowance:

(P 30,000.00)

(P 41,400.00)

Total Taxable Compensation:

P 560,600.00

Less: Personal exemption:

(P 50,000.00)

Less: Additional exemption (2 X 25,000):

(P 50,000.00)

(P 100,000.00)

Net Taxable Compensation:

P 460,600.00

*(Basic pay + Overtime + 13th month pay + Other Benefits)

Now we need to figure out how much is the Tax Due for your employee. You can refer
to this formula from BIR:

Over

But not Over

Amount Rate

not over

10,000

5%

10,000

30,000

500 + 10%

of Excess Over

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 + 30%

140,000

250,000

500,000

50,000 + 30%

250,000

500,000

over

125,000 + 32%

500,000

(Source: BIR)

For the first P 250,000.00, tax is

P 50,000.00

Plus 30% of excess over 250,000*

P 63,180.00

Total tax due is

P 113,180.00

Less: Tax Collected for the year

(P 118,082.00)

Tax Refund for the year is

P 4,902.00

*(Net Taxable Compensation 250,000) X 30%

B. Employees with previous employers during the financial year

Sample Scenario: Bob, a single employee who was previously employed by Company A
from January June and started his new job under Company B effective July 1, 2013.
Company A Compensation Details
Basic Monthly Salary : ( P13,000 x 6) = P78,000
SSS/Philhealth : Php 3,400.00
Overtime Pay from Jan-June: P15,000
13th month Pay : P5,000
Other Benefits: P15,000
Withholding Tax (Jan-June) : P7,539.00

Company B Compensation Details

Basic Monthly Salary : ( P15,000 X 6) = 90,000
SSS/Philhealth : Php 4,500.00
Overtime Pay from June-July : P10,000
13th month Pay : P8,000
Other Benefits : P18,000
Withholding Tax (July-Dec) : P15, 328.00

Heres how to compute Bobs Net Taxable Compensation:

Total Gross Compensation Company A+B**:

P 239,000.00

Less: SSS/Philhealth/Pag-Ibig Company A+B

(P 7,900.00)

Less: Non Taxable Allowance: Company A+B

(P 30,000.00)

(P 37,900.00)

Total Taxable Compensation:

P 201,100.00

Less: Personal exemption

(P 50,000.00)

Net Taxable Compensation:

P 151,100.00

**Basic + Overtime + 13th Month + Other Benefits

Using the same formula from BIR stated earlier, heres how to compute for Bobs Tax
Due:

For the first 140,000 tax is:

P 22,500.00

Plus 25% of excess over 250,000**:

P 2,775.00

Total tax due is:

P 25,275.00

Less: Tax Collected Company A+B:

(P 22,867.00)

Tax Payable for the year is***

P 2,408.00

** ( Net Taxable Compensation 140,000) X 25%

*** Company B needs to collect this amount from Bob

C. Employees terminated before the end of the financial year

Sample Scenario: Mary, married with 1 qualified dependent and filed resignation effective
July 31, 2013.
Basic Monthly Salary : ( P45,000 X 7 months) P 315,000
SSS/Philhealth paid until July: Php 7,350.00
Overtime Pay : P15,000
13th month Pay : P28,000
Other Benefits for the year : P18,000
Withholding Tax : P72,540.00

Heres how to compute Marys Net Taxable Compensation:

Total Gross Compensation**:

P 376,000

Less: SSS / Philhealth / Pag-Ibig

(P 7,350.00)

Less: Non Taxable Allowance:

(P 30,000.00)

(P 37,350.00)

Total Taxable Compensation:

P 338,650.00

Less: Personal exemption

(P 50,000.00)

Net Taxable Compensation:

P 288,650.00

**(Basic pay + Overtime + 13th month pay + Other Benefits)

Using the same formula from BIR stated earlier, heres how to compute for Bobs Tax
Due:

For the first 250,000 tax is:

P 50,000.00

Plus 30% of excess over 250,000**

P 11,595.00

Total tax due is :

P 61,595.00

Less: Tax Collected Company

(P 72,540.00)

Tax Refund for the year is

**(Net Taxable Compensation 250,000) X 25%

P 10,495.00