TAX

1. doh.gov.ph
EMPLOYEE
CONTRIBUTIONS,
DEDUCTIONS AND TAXES
CRIS ANN T. BUSILAN, CPA
Accountant III
November 16-17, 2023

2. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
2
CONTRIBUTIONS & DEDUCTIONS
1. GSIS
2. PAGIBIG/HDMF
3. PHILHEALTH
4. SSS
5. LANDBANK (Loans)
6. UNION
7. BIR (Taxes)

3. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
3
GSIS/Government Service
Insurance System
 It is a social insurance program for government employees.
 GSIS coverage is compulsory for all government regular
employees. Once employed, you are automatically covered
and start making contributions.
 The GSIS contribution is shared between the employee and
the government agency. The employee contributes 9% of
their actual monthly salary while the agency contributes 12%.

4. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
4
GSIS DEDUCTIONS
1. Premium Contribution – 9% of Basic Monthly Salary
Ex. BMS = 27,000.00
Computation: (27,000.00*9% = 2,430.00)
2. GSIS Loans
 Conso Loan
 Policy Loan
 Emergency Loan
 Multi-purpose Loan

5. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
5
Pag-IBIG/Home Development
Mutual Fund (HDMF)
DEDUCTIONS
1. Premium Contribution
● Regular - 2% of Basic Monthly Salary
Ex. BMS = 27,000.00
Computation: (27,000.00*2% = 540.00)
● JO – 100.00 (minimum)

6. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
6
Pag-IBIG/Home Development
Mutual Fund (HDMF)
2. PAGIBIG LOANS
 Calamity Loan
 Housing Loan
 Education Loan
 Multi-purpose Salary Loan
 Car Loan
 Others
3. MP2 – employee savings/investment

7. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
7
PHILHEALTH
● PhilHealth Premium Contribution Table 2023
● REGULAR: Monthly Premium/2 = Contribution (salary
deduction) or (2%-employee share, 2%-government share)
● JO: 4% salary deduction
Monthly Basic Salary Premium Rate Monthly Premium
₱10,000 and below ₱400
₱10,001 to ₱79,999.99 4% ₱400 to ₱3,200
₱80,000 and above ₱3,200

8. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
8
Social
Security
System
(SSS)
employees
have the option
as to rate of
contribution

9. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
9
UNION
DEDUCTIONS:
1. Union Dues – 310.00
2. Union Financial Assistance (Loans)
3. Others (Uniforms, raffle tickets)

10. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
10
TAXES (BIR)
INDIVIDUAL TAX COMPUTATION
Republic Act No. 10963 – Tax Reform for
Acceleration and Inclusion (TRAIN) Act

11. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
11
Creditable withholding tax
1.Compensation - is the tax withheld from income payments
to individuals arising from an employer-employee
relationship.
2.Expanded - is a kind of withholding tax which is prescribed
on certain income payments and is creditable against the
income tax due of the payee for the taxable quarter/year in
which the particular income was earned.

12. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
12
WITHHOLDING TAX ON
COMPENSATION
● Compensation or Wages - refers to all remuneration for
services performed by an employee for his employer
under an employee-employer relationships.
● Taxable unless exempted by the NIRC and pertinent
laws.

13. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
13
TAXABLE
COMPENSATION INCOME

14. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
14
GROSS COMPENSATION INCOME
1. BASIC SALARY XX
2. HAZARD PAY XX
3. Longevity XX
4. Night Differential &
Overtime Pay XX
TOTAL ANNUAL COMPENSATION XX
5. OTHER BENEFITS Mid-year Bonus XX
*90,000.00 (exempt) Year-end Bonus XX
PBB XX
PEI XX
SRI XX
HEA XX
Others (Excess de minimis) XX
TOTAL OTHER BENEFITS XX
TOTAL ANNUAL GROSS TAXABLE INCOME XX

15. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
15
NONTAXABLE OTHER BENEFITS/CLAIMS
1. De Minimis Benefits = privileges/incentives of relatively small value
De Minimis benefits: Threshold
1. Medical Cash Allowance 1,500/sem
2. Rice Allowance 2K/month
3. Clothing 6K/year
4.Collective Bargaining
Agreement(CBA) and PEI 10K/year
5. Monetization vacation and sick leave NO THESHHOLD
6. Medical Cash Allowance of
Dependents 1,500/sem
7. Laundry Allowance 300/month
8. Cash Gift 5K/Year

16. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
16
2. OTHER Claims of empoyees which are not Taxable:
Reason why not taxable?
RATA
-Specifically stipulated in the Revenue Regulation
(RR No. 11-2018)
TEV and Per diems
-Because these items are not compensation but
reimbursements of expenses incurred during
official business/duty
Subsistence Allowance
-small amount of subsidies for government workers
just to make ends meet
PERA
-small amount of subsidies for government workers
just to make ends meet
-Specifically stipulated in the Revenue Regulation
(RR No. 11-2018)

17. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
17
TAX TABLE
Bracket Taxable Income per Year Income Tax Rate
1 P250,000 and below 0%
2 Above P250,000 to P400,000 15% of the excess over P250,000
3 Above P400,000 to P800,000 P22,500 + 20% of the excess over P400,000
4 Above P800,000 to P2,000,000 P102,500 + 25% of the excess over P800,000
5 Above P2,000,000 to P8,000,000 P402,500 + 30% of the excess over P2,000,000
6 Above P8,000,000 P2,205,500 + 35% of the excess over
P8,000,000

18. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
18
EXAMPLE
EMPLOYEE A (SG11)
1. Basic Salary monthly – 27,000.00
2. Hazard Pay (25%) – 6,750.00
3. Longevity Pay monthly – 1,350.00
4. Night Shift Differential (annual) – 18,000.00
5. Total Other benefits – 123,00.00
● Mid-year Bonus – 27,000.00
● Year-end Bonus – 27,000.00
● PBB – 13,000.00
● SRI – 20,000.00
● HEA – 36,000.00

19. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
19
1. Basic Salary monthly – 27,000.00 * 12 months = 324,000.00
2. Hazard Pay (25%) – 6,750.00 * 12 months = 81,000.00
3. Longevity Pay monthly – 1,350.00 * 12 months = 16,200.00
4. Night Shift Differential (annual) = 18,000.00
5. Total Other benefits = 123,00.00
TOTAL GROSS COMPENSATION INCOME 562,200.00
Less: DEDUCTIBLES (Nontaxable/Exempt Compensation Income)
 90,000.00 (Bonuses & Other Benefits) 90,000.00
 Mandatory Contributions (GSIS,PHIC,PAGIBIG) 40,500.00 (130,500.00)
NET TAXABLE INCOME 431,700.00

20. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
20
Bracket Taxable Income per Year Income Tax Rate
1 P250,000 and below 0%
2 Above P250,000 to P400,000 15% of the excess over P250,000
3 Above P400,000 to P800,000 P22,500 + 20% of the excess over P400,000
4 Above P800,000 to P2,000,000 P102,500 + 25% of the excess over P800,000
5 Above P2,000,000 to P8,000,000 P402,500 + 30% of the excess over P2,000,000
6 Above P8,000,000 P2,205,500 + 35% of the excess over
P8,000,000

21. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
21
● NET TAXABLE INCOME 431,700.00
COMPUTATION:
431,700.00 – 400,000.00 = 31, 700.00 * 20% = 6,340.00
22,500.00
COMPUTED ANNUAL TAX 28,840.00

22. Department
of
Health
/doh.gov.ph
Republic
of
the
Philippines
22
OTHER EXAMPLES
2. NET TAXABLE INCOME: 233,700.00 NOT TAXABLE
3. NET TAXABLE INCOME: 389,000.00
389,000.00 – 250,000.00 = 139,000.00 * 15% = 20,850.00
4. NET TAXABLE INCOME: 900,000.00
900,000.00-800,000.00 = 100,00.00 * 25% = 25,000.00
102,500.00
127,500.00

23. Department of Health
/doh.gov.ph
Republic of the Philippines
Maraming Salamat po!