Thursday, March 19, 2015

Republic Act No. 10653: Increase of the Total Amount of Exclusion to P82,000.00 for 13th Month Pay and Other Benefits from Gross Income under RR No. 3-2015

Recently, the Bureau of Internal Revenue finally issued the Revenue Regulations No. 3-2015 implementing the Provisions of Republic Act No. 10653. "An act Adjusting the 13th Month Pay and Other Benefits Ceiling Excluded from the Computation of Gross Income for Purposes of Income Taxation.

Amending the provision on Revenue Regulations No. 2-98 - The amount of Thirty Thousand Pesos (P30,000.00), specifically referring to the total amount of 13th month pay and other benefits as one of the exclusions from gross compensation income received by an employee prescribed under the pertinent provisions, including the example computations of revenue Regulations (RR) No. 2-98, as amended, is hereby increased to "Eighty Two Thousand Pesos (P82,000.00)", pursuant to the provisions of RA No. 10653.

The amount of P82,000.00 shall ONLY apply to the 13th month pay and other benefits prescribed under the provisions of section 2.78.1.(B)(11) of RR No. employee under an employer-employee relationship, such as basic salary and other allowances. It must be emphasized that this exclusion from gross income is not applicable to self-employed individuals and income generated from business.

The amount of P82,000.00 shall apply to the 13th month pay and other benefits paid or accrued beginning January 1, 2015.

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