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Sunday, June 28, 2009
2009 Philippines Tax Computation
Tax Relief Program
Exempts minimum wage earners in the private sector and their
counterparts(casual
employees) in the public sector from paying income tax.[Republic
Act No. 9504]
Personal exemptions up.
Status OLD Tax Law NEW Tax Law
Single P20,000 P50,000
Head of The Family P25,000 P50,000
Married P32,000 P50,000
Additional Deductionfor Every QualifiedDependents
P8,000 P25,000
For instance, a family of one working spouse with 3 qualified
dependents will have a total of P125,000.00 in personal exemptions.
(from the OLD P 56,000.00)
The law classify a DEPENDENT as a legitimate, illegitimate or
legally adopted child livingwith the taxpayer and not more than 21
years old, unmarried and not employed.
New Tax Table For January 2009
Blog Archive
2009 (2)
June (2)
2009 Philippines
Tax Computation
Tax Computation
in the Philippines
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3/16/2014 Philippines Tax ComputationWithholding Tax
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http://philippinestaxcomputation.blogspot.com/ 2/10
Posted by sports-broadcaster at 11:48 PM 41 comments
Tax Computation in the Philippines
1. The first step is you should answer the following questions
below:
What is Your Status? (Single or Married?)Do You Have Any
Dependent? How Many?How much is your Monthly Basic
Pay(salary)?(This does not include your overtime pay/monetaryvalue
of your late/tardiness,holiday pay, but includes the monthly
allowance that you received.)
2. How much is your SSS,Philhealth,and HDMF (Pag-Ibig) monthly
contributions?
Before starting,it is very important first to have a calculator
with you. Simple Calculator
With your Monthly Basic Pay(Salary) you can immediately know
your contributions.Just refer to this tablebelow:
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For SSS:
Suppose your monthly basic pay(salary) is P11,000.00 then by
looking at the table above(under thecolumn of Range of
Compensation) just find the range of compensation that includes
P11,000.00 andsimply move your eyes horizontally and look for your
corresponding SSS Contribution(under the maincolumn Social Security
and sub-column EE or Employee Contribution).So what did you see?
P366.70right?.
Now just try it on your own,suppose your monthly basic
pay(salary)is P14,000.00 what is your SSSContribution?
Answer:P466.70
Since you already know how to look for your SSS Contribution it
is time for you now to know how muchis your employer's contribution
counterpart.Again, find the Range of Compensation where
youbelong,move your eyes horizontally, and just look under the main
column Social Security and sub-column ER or Employer
Contribution.
Suppose you have a P11,000 monthly basic pay (salary) then the
ER or Employer Contribution wouldbe P777.30 and your total monthly
contribution that debit in the SSS is P1,144 (P777.30+P366.70).
If your monthly basic pay (salary) is P14,000, what is your
employer contribution?your totalcontribution? Answer: ER= P989.30 ;
TC= P1456.00
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For Philhealth:
Illustration:
For instance you have a monthly basic pay (salary) of P11,000,
then your Philhealth MonthlyContribution would be P137.50. How did
I get this figure?It is simple,just look for the column
underMonthly Salary Range and find for the interval where your
salary belongs. After that, move your eyeshorizontally(to the
right) and find for the corresponding Philhealth Monthly
Contribution under theEmployee's Share Column.Got that???It is easy
right?Now, take your try.
Example my gross basic pay (salary) is P14,000.00,how much is my
Philhealth Monthly Contribution?Answer:P175.00
Aside from this it is also better and wise to know your
employer's contribution counterpart .Again,going back to the
Philhealth Table above just look for the column under Employer's
Share thatcorresponds to your monthly gross income.If your monthly
gross income is P11ooo.00 then yourEmployer's Share is P137.50 and
the total amount that debit in your Philhealth Contribution
isP275.00 (Employee's Share + Employer's Share).
For HDMF/Pag-Ibig Contribution:
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Illustration:
If your Monthly Basic Pay (Salary) is P11,000 then your HDMF
Contribution is P11,000.00 X .02 =P220 and your Employer's
Counterpart is P11,000.00 X .02 = P220 . This computation is
soeasy.After you know where your Gross Monthly Salary Range belong
just multiply it by theMULTIPLIER that corresponds to your monthly
basic pay (salary) .The total monthly contribution thatdebit in
your HDMF Contribution is P440.00 monthly.
Note: You can also demand to your Finance Officer or Human
Resource Officer if you want to increaseyour HDMF Monthly
Contribution.Why should you do that?These are the reasons:
If you want to avail a housing loan. (The bigger contribution
you have the bigger the money lateron that you can loan for your
housing loan.
To reduced your monthly withholding tax. Even the difference is
minimal still it is an advantage toyour part.Why let the government
get your money and can't even avail the priviledges.It is betterto
invest your money in HDMF than letting it see in the "trust" fund
of our government.NOTE: Ifyou increase your HDMF Contribution you
will reduce the tax that the government get fromyou and at the same
time you are investing it to have a better house that you will
ownsomeday.
3. Are you receiving other allowances like laundry
allowance,transportation allowances ,riceallowances,etc.? If yes
how much?
You need this later on when you compute your withholding tax
because these are not taxable. Failure tonote this may result to
erroneous result of computation.
4.What is TAXABLE INCOME?
Taxable income is the portion of income that is the subject of
taxation.
In the Philippines our taxable income is determined by this
formula:
Taxable Income = [Gross (Basic)Monthly Income+ Overtime
Pay+Holiday Pay+NightDifferential] - (minus) [Tardiness
Deduction+Allowances+SSS Contribution+PhilhealthContribution,HDMF
Contribution]
Note: I did not include and subtract the amount of personal
exemptions(exemptions due to yourstatus like:Head of the
Family,Single,Married etc.) since your corresponding
personalexemptions can be see later on in the tax table and your
personal exemption is included alreadyin the formula for computing
the tax.You will understand it clearly later on when I introduce
thegeneral formula of withholding tax computation.
5.Factors you need to consider when solving your withholding tax
(Applicable for Old TaxRuling).
Factors that increases your tax:
Overtime PayHoliday PayNight Differential
Factors that decreases your tax:
Late/TardinessAllowancesSSS ContributionPhilhealth
ContributionHDMF ContributionPersonal Exemptions (ex. single, head
of the family, head of the family with qualifieddependents,etc)
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6.You must have a copy of BIR Tax Table
New Tax Table For January 2009
7. Knowing the General Formula of Withholding Tax ,Knowing the
Parts and to Use the Tax Table,and Computing Your Withholding
Tax
General Formula:
Withholding Tax = ( ([Taxable Income] - [Bracket or Exemption] )
x [%over] ) + [Bracket Tax orBase Tax]
Where as Taxable Income=[Gross (Basic)Monthly Income+ Overtime
Pay+Holiday Pay+NightDifferential] - (minus) [Tardiness
Deduction+Allowances+SSS Contribution+PhilhealthContribution,HDMF
Contribution]
Note: Before Solving For your Withholding Tax, find your Taxable
Income first and simplysubstitute the value in Withholding Tax
Formula.
Parts of Tax Table
Bracket or Exemption%overBracket Tax or Base Tax
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Illustration:
Assuming your tax is computed in a monthly basis and you already
computed your TAXABLEINCOME (not your gross income) totaling to
P8,558 and you are Single then:
Corresponding Bracket or Exem ption:P6,667 .00 Corresponding
%over: 15% or.15 Corresponding Bracket T ax or Base T ax:
P208.33
Question: Why did I use the amount P6,667.00 as the Bracket or
Exemption for the taxableincome of P8,558? Why not P5,000 with a
%over of 10% or P4,167 with a %over of 5%?Do youknow why?
Answer: Of course there is a way on finding your corresponding
Bracket or Exemption and %overgiven your Taxable Income but I will
not introduce it here since it is a long process that requires
yourarithmetic skills.I am just considerate for those who are poor
in Math. Anyway, I will still share myprecious trick that I am sure
you will all understand it in an easy and direct way. I am 100%
sure of thisnumber trick since I already tested it a thousand
times.It is better to understand it if I will show a seriesof
examples. Here are they:
When finding for the corresponding Bracket or Exemption and
%over just look:
1. The row of your STATUS(ex. Single,Head of the
Family,Married,and etc.)on the table.2. Then look for the greatest
number that is less than to your Taxable Income(within the row
of your STATUS).This is now your bracket or exemption.3. After
you found it,move your eyes vertically upward (on the tax table)and
look for your
corresponding % over and Bracket Tax or Base Tax.
Example 1:
Given:
Assuming Withholding Tax Computed Monthly Taxable Income:
P8558.00 Status: Single(S)
Answer:
Corresponding Bracket or Exem ption:P6,667 .00 Corresponding
%over: 15% or.15 Corresponding Bracket T ax or Base T ax:
P208.33
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Com puting Your Withholding T ax:
Withholding T ax = ( ([T axable Incom e] - [Bracket or Exem
ption] ) x [%over] ) + [Bracket T ax orBase T ax]
Withholding T ax =[(P8558.00-P6,667 .00) X .15] + P208.33
Withholding Tax =P491.98
Example 2:
Given:
Assuming Withholding Tax Computed Monthly Taxable Income:
P12,540.00 Status: Single or Married with 1 Qualified Dependent (S1
or M1)
Answer:
Corresponding Bracket or Exemption:P12,083.00 Corresponding
%over: 20% or.20 Corresponding Bracket Tax or Base Tax: P708.33
Withholding Tax = ( ([Taxable Income] - [Bracket or Exemption] )
x [%over] ) + [Bracket Tax or BaseTax]
Withholding Tax =[(P12,540.00-P12,083.00) X .20] + P708.33
Withholding Tax = P799.73
Example 3:
Given:
Assuming Withholding Tax Computed Monthly Gross or Basic Income:
P11,000.00 Monthly Transportation Allowance:P500.00 Monthly Rice
allowance:P500.00 Late/Tardiness:2hrs Overtime: 4 hrs (regular day)
HDMF /Pag-Ibig Contribution: P300.00 Status: Married with 2
Qualified Dependents (M2) Days of Duty:22 days (8hrs per day)
Problem: How much is your monthly withholding tax given the
information above?
Solution:
a.With your Gross or Basic Income totaling to P11,000.oo you can
directly compute for your SSS andPhilhealth Contribution. By
looking on the SSS and Philhealth tables above your respective
contributionsare as follows:
SSS Contribution:P366.70 Philhealth Contribution:P137.50
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b.Computing for the corresponding value of late/tardiness and
overtime pay Given your grossmonthly salary of P11,000.00 then the
monetary value of your late/tardiness is:
Total Number of Hours Worked: 22 X 8 = 176 hours
Rate Per Hour: P11,000.00 /(divided by) 176 = P62.5
The Monetary Value of Late/Tardiness: 62.5 X 2 = P125.00
Given your gross monthly salary of P11,000.00 then the monetary
value of the overtime is:
Note: The overtime pay per hour for regular day is 125% (1.25)of
your hourly rate
Overtime Rate Per Hour: 62.5 X (1.25) = P78.125
Total Overtime Pay: P78.125 X 4hrs = P312.5
c.Solving For Taxable Income.(I skip this process in my two
previous examples since the taxableincome is already given but in
this example the given is gross or basic salary instead of taxable
income.General Formula:
Taxable Income=[Gross (Basic)Monthly Income+ Overtime
Pay+Holiday Pay+Night Differential] - (minus) [Tardiness
Deduction+Allowances+SSS Contribution+PhilhealthContribution,HDMF
Contribution]
Taxable Income=[ P11,000.00 + P312.5 ] - [ P125.00 + P500.00 +
P500.00 + P300.00 + P366.70 + P137.50]
Taxable Income= [11,312.5]-[1929.2]
Taxable Income= P 9383.3
d.Solving for the corresponding withholding tax.
Corresponding Bracket or Exemption:P9167.00 Corresponding %over:
10% Corresponding Bracket Tax or Base Tax: P41.67
Withholding Tax = ( ([Taxable Income] - [Bracket or Exemption] )
x [%over] ) + [Bracket Tax or BaseTax]
Withholding Tax = ( ([P9383.3] - [P9167.00] ) x [.10] ) +
[41.67]
Withholding Tax=P63.3
It is very easy right? By just simply following the 8 easy steps
above you are now ready to check if yourfinance/payroll officer
miscalculated your tax. Always remember you don't need to be an
accountant nora mathematically inclined person just to solve your
withholding tax, all you need is simply following theseeight easy
steps.
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Posted by sports-broadcaster at 11:40 PM 55 comments
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