Showing posts with label Revised Withholding Tax Table On Compensation 2018. Show all posts
Showing posts with label Revised Withholding Tax Table On Compensation 2018. Show all posts

Thursday, January 4, 2018

Procedures On The Use Of Withholding Tax Table On Compensation Income

To supplement Revenue Memorandum Circular (RMC) No. 105-2017 that was issued last December 28, 2017, the bureau has issued RMC No. 1-2018 dated January 4, 2018 to prescribes the Procedures on the use of Withholding Tax Table on Compensation Income with effective date of January 1, 2018 to December 31, 2022.

Steps in the Use of the Withholding Tax Table

Generally, every employer paying compensation to its employee/s shall deduct and withhold from such compensation a tax determined in accordance with the prescribed Revised Withholding Tax Tables, version 2 (Annex "A").

1. Determine the total amount of monetary and non-monetary compensation paid to an employee for the payroll period: monthly, semi-monthly, weekly or daily, as the case may be, segregating non-taxable benefits and mandatory contributions.

2. Use the appropriate table in Annex "A" for the applicable payroll period.

3. Determine the compensation range of the employee and apply the applicable tax rates prescribed thereon.

4. Compute the withholding tax due by adding the tax predetermined in the compensation range indicated on the column used and the tax on the excess of the total compensation over the minimum of the compensation range.

Sample Computations Using the Withholding Tax Tables

Example 1:

Example 2:

Example 3. 


Example 4.




Sunday, December 31, 2017

Revised Withholding Tax Table On Compensation Pursuant to the Amendments To The NIRC of 1997 as Introduced by Republic Act No. 10963

The bureau recently published the Revenue Memorandum Circular (RMC) No. 105-2017 with regards to Revised Withholding Tax on Compensation Pursuant to the Amendments to the National Internal Revenue Revenue Code (NIRC) of 1997 as Introduced by Republic Act No. 10963, Other Known as the "Tax Reform for Acceleration and Inclusion (TRAIN) Law".

Republic Act No. 10963, otherwise known as the "Tax Reform for Acceleration and Inclusion  (TRAIN) Law" is effective on January 1, 2018 to December 31, 2022. In this regard, beginning January 1, 2018, every employer making compensation payments in their respective employees shall deduct and withhold from such compensation a tax determined in accordance with the Revised Withholding Tax Table attached in ANNEX "A".