In relation to my previous blogs about the computations of SS & EC Contributions, Philhealth Contributions and Pag-IBIG Contributions, let us apply it in the Computation of Withholding Tax on Compensation and Year-End Adjustment:
ILLUSTRATIONS:
Assuming that Employee A (Husband) is married to Employee B
(Wife) with a Monthly Basic Salary (Net of Absences, Late) amounting to Php.18,000.00,
with two (2) Qualified Dependent Child (QDC).
Employee A opt to contribute Monthly
Pag-IBIG Contribution of P900.00.
The Monthly Withholding Tax on Compensation is computed
as follows:
Step 1. Determine the Gross Taxable Compensation
Income (Net of SSS, PHIC & Pag-IBIG)
Step 2. Determine the Mandatory Employee (EE)
SSS, PHILHEALTH, Pag-IBIG Contribution and UNION Dues (if applicable).
Employee (EE) SSS Contribution (Monthly) –
P581.30
Employee (EE) Philhealth Contribution (Monthly)
– P225.00
Employee (EE) Pag-IBIG Contribution Monthly) –
P100.00
Step 3. Determine the Exemption Status and
Number of Qualified dependents of the taxpayer (if any).
Personal Exemptions: P50,000 regardless of
status.
Additional Exemption: P25,000 for every
qualified dependent child but not to exceed four (4) dependents
Step 4. Computation of Withholding Tax using the
Revised Withholding Tax Tables Effective January 1, 2009.
SEMI-MONTHLY:
Use Table B for Single/Married
Employees with Qualified Dependent Children (QDC)
Taxable Compensation Income
Regular:
Basic Salary (Net of
Late/Absences) 9,000.00
Overtime Pay 0.00
Others 0.00
Total Taxable Compensation Income 9,000.00
Non-taxable/Exempt
Compensation Income:
Basic Salary/Statutory Minimum Wage Minimum Wage
Earner (MWE) 0.00
Overtime Pay (MWE) 0.00
SSS, GSIS, PHIC & Pag-IBIG Contributions, &
Union Dues (Employee Share Only)
SSS P290.65
PHIC P112.50
Pag-IBIG P 50.00 453.15
Others 0.00
Total Non-taxable/Exempt Compensation Income 453.15
Gross Compensation Income 9,453.15
Less: Total Non-taxable/Exempt Compensation Income 453.15
Gross Taxable Compensation
Income (Net of SSS, PHIC & Pag-IBIG) 9,000.00
Less: (See Withholding Tax Table: Semi-monthly– Column 5, B.2) 7,083.00
Excess/Difference 1,917.00
Multiply by: 20%
Withholding Tax of Excess 383.40
Plus: (See Withholding Table: Semi-monthly – Column 5 Row 1) 354.17
Total Withholding Tax on
Compensation – Semi-monthly 737.57
ANNUALIZED COMPUTATION OF
WITHHOLDING ON COMPENSATION
Taxable Compensation Income
Regular:
Basic Salary (Net of
Late/Absences) – January 1 to December 31 (18,000 X 12) 216,000.00
Overtime Pay 0.00
Others 0.00
Total Taxable Compensation Income 216,000.00
Non-taxable/Exempt
Compensation Income:
Basic Salary/Statutory Minimum Wage Minimum Wage
Earner (MWE) 0.00
Overtime Pay (MWE) 0.00
SSS, GSIS, PHIC & Pag-IBIG Contributions, &
Union Dues (Employee Share Only)
SSS (581.30 x 12 mos.) 6,975.60
PHIC (225.00 x 12 mos.) 2,700.00
Pag-IBIG (100.00 x 12 mos.) 1,200.00 10,875.60
13th Month Pay (18,000.00 x 12/12) 18,000.00
Others 0.00
Others 0.00
Total Non-taxable/Exempt Compensation Income 28,875.60
Gross Compensation Income
(216,000.00 + 28,875.60) 244,875.60
Less: Total Non-taxable/Exempt Compensation Income 28,875.60
Gross Taxable Compensation
Income 216,000.00
Less: Total Exemptions
Personal Exemption 50,000.00
Additional Exemptions (25,000.00 x 2) 50,000.00 100,000.00
Less: Premium Paid on Health and/or Hospital Insurance 0.00
Net Taxable Compensation
Income 116,000.00
Tax Due: Excess (116,000.00 –
70,000.00) x 20% 9,200.00
Plus: 8,500.00
Total Tax Due 17,700.00
Less: Taxes Withheld (January 1 to December 15) – (1,475.14 x 11 mos.
+ 737.57) 16,964.11
Amount of Tax to be withheld
on December 16 -31 735.89
Please refer http://www.bir.gov.ph/images/bir_files/old_files/pdf/42126AnnexC.pdf of the Revised Withholding Tax Table Effective January 1, 2009 and http://www.bir.gov.ph/index.php/bir-forms/certificates.html#c2316 (BIR Form No. 2316) - Certificate of Payment/Tax Withheld
