What You Should Know About Employee Income Tax in the Philippines

"Taxes are what keep a country thrive in the financial sense."

Here's an overview of employee income tax in the Philippines. This summarizes the Philippine Bureau of Internal Revenue's guidelines on employees' income tax.

Why pay your income tax?

Taxes are what keep a country thrive in the financial sense. The government uses your taxes to pay foreign debts, maintain public institutions (hospitals, government offices and corporations, the Armed Forces, etc.), subsidize schools, provide health care, and finance many other government projects. Without people's taxes, the government would be dysfunctional in distributing social services to its constituents.

What is employee income tax?

The personal tax you pay is called employee income tax, and it is a tax on your personal income, remuneration for work, profits accumulated from properties and assets, income from practice of profession, income from trade or business, and other gross income specified in the Tax Code of 1997.

Who should pay employee income tax?

Regardless where your income is coming from, within or outside the Philippines, all employed or earning citizens in the Philippines are obligated to pay their income taxes, specifically:

• Individuals who draw compensation from two or more employers simultaneously or successively within the taxable year;
• Employees who get compensation income (regardless of the amount) from a single or several employers within the calendar year, whose income taxes were not accurately withheld;
• Employees whose earnings do not exceed 5,000 Philippine pesos or the statutory minimum wage, whichever is higher, and who decides not to withhold tax on this income;
• Individuals who earn income from other non-business, non-professional sources in addition to their compensation that are not subject to a final tax;
• Individuals who are receiving income from just one employer, and even though the tax is correctly withheld, but whose spouse is not entitled to substituted filing;
• Non-resident citizens who receive income from within the Philippines;
• Citizens who work abroad but who receive income from Philippine sources;
• Aliens, whether resident or not, who receive income from Philippine sources;
• Domestic or foreign corporations that receive income from within the Philippines; and
• Estates and trusts engaged in any form of business or trade.

What to bring when filing for income tax for employee?

Take these documents with you when filing for your income tax:

• Certificate of income tax withheld on compensations (BIR Form 2316)
• If applicable, waiver of your husband's right to claim additional exemption
• Duly approved tax debit memo, if applicable
• Proof of foreign tax credits, if applicable
• Return of previously filed return and proof of payment, if amended return

What are the quarterly deadlines of employee income tax filing?

Earning individuals should take note of these deadlines, which fall three times in a taxable year, which are as follows: April 15 - for the first quarter August 15 - for the second quarter November 15 - for the third quarter

Be sure not to fail in filing for your employee income tax before the deadlines to ensure smooth filing.

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