Philippines Payroll Compliance Map

Email: mnl4ww@evershinecpa.com
or
Contact by Viber or Skype during working hours of the Philippines time zone.
For Philippines going-out cases, the coordinator window will be:
Manila Branch of Evershine BPO Service Corp. in Taiwan
Project Manager Meiling Wu, who speaks both English and Tagalog.
Viber: +886966173105
Skype: wumeiling25

WWT – Philippines Payroll Income Tax Deduction

WWT-PH-01 WWT Tax Entity

Question from client:
Is the Philippines salary income tax levied in national or locals? Or both national and locals?
Are the national and local personal income tax that levied separately? Or levied together?
What is the standard withholding tax rate?

Answer from Evershine RD:
The national government of the Philippines enacts laws regarding income taxes.

WWT-PH-02 Registration

Question from client:
The Philippines salary income tax collection is under the jurisdiction of which government unit?
The registration of the Philippines salary income tax collection status, that is, the application procedure for the employer withholding certificate number, paper certificate number application, or online account application? Website? Employer withholding certificate ?
What is the advance certificate number of the number?
Do you need to use the industrial and commercial certificate e-card to apply?

Answer from Evershine RD:
Income taxes are administered by the Bureau of Internal Revenue in the Philippines.
The National Internal Revenue Code (NRIC) regulates income tax procedures.
Registration is required within 10 days from the start date of an employment contract, on or before the commencement of business, before payment of any tax due, or upon filing a tax return, statement, or declaration.
An annual registration fee of 500 for every business is to be paid upon registration every year before Jan. 31.
After registration, each registered entity will receive a Taxpayer Identification Number (TIN).

WWT-PH-03 WWT Order (OD)

Question from client:
What is the order of Philippines salary income tax withholding declaration (information flow determines tax base) and payment (fund flow)?
Pay first and then declare?
Report first and then pays?
At the same time as the declaration and payment?

Answer from Evershine RD:
Deposit First (DF): Make monthly payments then file the required forms.

WWT-PH-04 Mechanism of Filing (MOF)

Question from client:
Philippines’ salary income tax withholding declaration (information flow determines the tax base)
What is the method of account return?
Reporting cycle: every month? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist?
If electronic filing is possible: Web site URL?

Answer from Evershine RD:
Employers can electronically file Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) using the Bureau of Internal Revenue’s Electronic Filing and Payment System (eFPS).
Employers filing Form 1601-C electronically must file the form and remit the withheld taxes according to the schedule found in RR No. 26-2002, which identifies five groups of employers with varying filing and payment due dates and the types of employers in each group:

Group A: 15 days following the end of the month in which withholding occurred

Group B: 14 days following the end of the month in which withholding occurred

Group C: 13 days following the end of the month in which withholding occurred

Group D: 12 days following the end of the month in which withholding occurred

Group E: 11 days following the end of the month in which withholding occurred.

Annual information returns must be submitted by Jan. 31 using Form 1604-CF, Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes.
Returns must be filed with the revenue collection officer or city/municipal treasurer of the revenue district office with jurisdiction over the employer’s place of business.

WWT-PH-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for the Philippines salary income tax withholding payment (funding flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize the deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT?
Or the above methods coexist?

Answer from Evershine RD:
Employers filing Form 1601-C electronically must file the form and remit the withheld taxes according to the schedule found in RR No. 26-2002, which identifies five groups of employers with varying filing and payment due dates and the types of employers in each group:

Group A: 15 days following the end of the month in which withholding occurred

Group B: 14 days following the end of the month in which withholding occurred

Group C: 13 days following the end of the month in which withholding occurred

Group D: 12 days following the end of the month in which withholding occurred

Group E: 11 days following the end of the month in which withholding occurred

The tax return and payments must be made to the authorized agent bank of the BIR District Office with jurisdiction over the employer’s place of business.
If there is no authorized agent bank, the tax return and payments must be made to the revenue collection officer of the district office with jurisdiction over the employer’s place of business.

BNF – Deduction of Employee Social Welfare

BNF-PH-01 BNF Entity

Question from client:
Philippines’s social insurance, medical insurance, pensions, and other employee social welfare levy, is it national? Is it locals?
Or is there a national plus local? If there is a national and locals, are they levied separately?
or levied together? What is the withholding tax rate?

Answer from Evershine RD:
The national government of the Philippines enacts laws regarding social taxes.

BNF-PH-02 Registration

Question from client:
Social Security Certificate Number? What is the name of the government agency in charge of social insurance?
Medical insurance certificate number? What is the name of the government agency in charge of medical insurance?
Pension certificate number? The name of the government agency in charge of pensions?
How to apply for the social welfare certificate number for employees in the country?
Paper certificate number application? Or an online account application? Website?
Need to use the industrial and commercial certificate electronic card to apply?
Are the above three certificate numbers unified or separate?

Answer from Evershine RD:

Social Security System (SSS)

Employers must register their employees with the Social Security System (SSS) within 30 days of the commencement of employment contracts.
Registration portal: https://www.sss.gov.ph/sss/appmanager/portal/home

PhilHealth

Registration portal at https://www.philhealth.gov.ph/services/
To register, submit the following to any PhilHealth Office:

1. Employer Data Record (ER 1) Form
2. PhilHealth Membership Registration Form (PMRF) for each employee

After processing, the employer will be issued the following:

1. PhilHealth Employer Number (PEN) and the Certificate of Registration
2. PhilHealth Identification Number (PIN) and Member Data Record (MDR) of registered employees.

Pag-IBIG

Registration portal at https://www.pagibigfund.gov.ph/#

BNF-PH-03 BNF Order (OD)

Question from client:
What is the order of the withholding declaration of social welfare for Philippines employees (information flow determines the tax base) and payment (fund flow)?
Pay first and then declare? Report first and then pays?
At the same time as the declaration and payment?

Answer from Evershine RD:
Same Period: Report and pay at the same time.

BNF-PH-04 Mechanism of Filing (MOF)

Question from client:
What is the method of reporting for withholding of social benefits for Philippines employees (information flow determines the tax base)?
Reporting cycle: every month? Every bimonthly? Every season? Every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist?
If electronic filing is possible: Web site URL?

Answer from Evershine RD:
Social Security System (SSS)
Social taxes must be remitted by employers to an SSS branch office, accredited bank, or authorized payment center with three copies of SSS Form R-5, Employer Contributions Payment Return, based on what the 10th digit of the 13-digit employer number is:

• if the 10th digit is a 1 or 2, employers must remit payments by the 10th day of the month following the applicable month
• if the 10th digit is a 3 or 4, employers must remit payments by the 15th day of the month following the applicable month
• if the 10th digit is a 5 or 6, employers must remit payments by the 20th day of the month following the applicable month
• if the 10th digit is a 7 or 8, employers must remit payments by the 25th day of the month following the applicable month
• if the 10th digit is a 9 or 0, employers must remit payments by the last day of the month following the applicable month.

After each set of three copies of Form R-5 is filed, the government returns one of the copies to the employer as a validated Form R-5.
The validated copies of Form R-5 for each month of a quarter must be filed with the quarter’s Form R-3, Contribution Collection List by the 10th day of the month following the quarter.
Within 10 days after the deadline for remitting payments for a month, Form R-3 must be filed electronically with a validated copy of the month’s Form R-5, either on electronic media with the nearest SSS branch office or online using the government’s My.SSS portal https://www.sss.gov.ph/sss/appmanager/portal/home

Philippine Health Insurance Corporation (PhilHealth)
Filing through Electronic Premium Remittance System at https://epoaf.philhealth.gov.ph/employer/

Philippine Home Development Mutual Fund (Pag-IBIG)
Filing through Electronic Premium Remittance System at https://www.pagibigfundservices.com/vpagibigforemployers/

BNF-PH-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for Philippines employee social welfare withholding contributions (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT?
Or the above methods coexist?

Answer from Evershine RD:

Social Security System (SSS)
Social taxes must be remitted by employers to an SSS branch office, accredited bank, or authorized payment center with three copies of SSS Form R-5, Employer Contributions Payment Return, based on what the 10th digit of the 13-digit employer number is:

• if the 10th digit is a 1 or 2, employers must remit payments by the 10th day of the month following the applicable month
• if the 10th digit is a 3 or 4, employers must remit payments by the 15th day of the month following the applicable month
• if the 10th digit is a 5 or 6, employers must remit payments by the 20th day of the month following the applicable month
• if the 10th digit is a 7 or 8, employers must remit payments by the 25th day of the month following the applicable month
• if the 10th digit is a 9 or 0, employers must remit payments by the last day of the month following the applicable month.

Philippine Health Insurance Corporation (PhilHealth)

Remit through Electronic Premium Remittance System at https://www.philhealth.gov.ph/services/

Philippine Home Development Mutual Fund (Pag-IBIG)

1. Over-the-Counter Payment
2. Online Payment Facilities at https://www.pagibigfundservices.com/virtualpagibig/PayOnline.aspx
3. Digital (Mobile/ Internet)
4. Employers’ Online Payment Facility
5. Overseas Remittance

Please be aware of below Warning:
The above contents are digested by Evershine R&D and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

Manila Evershine BPO Service Limited Corp.
E-mail: mnl4ww@evershinecpa.com
or
Contact by Viber or Skype during working hours of the Philippines time zone.
For Philippines going-out cases, the coordinator window will be:
Manila Branch of Evershine BPO Service Corp. in Taiwan
Project Manager Meiling Wu, who speaks both English and Tagalog.
Viber: +886966173105
Skype: wumeiling25

or
For how to exchange data files between your Finance Accounting System and Evershine Cloud Accounting Information System,
please send an email to HQ4mnl@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable for your case.
Email address:dalechen@evershinecpa.com
linkedin address:Dale Chen

Additional Information

Evershine CPAs Firm Headquarters
6th Floor 378 Chang Chun Rd., Taipei City, Taiwan ROC
Partner Kerry Chen, USA Graduate School and a well-English speaker
Tel No.: +886-2-27170515 ext. 105
Mobile: +886-939357000
Email: kerrychen@evershinecpa.com
Skype: oklahomekerry

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Besides, Evershine is Taiwan local Partner of ADP Streamline ®.
(version: 2024/07)
Please send email to HQ4mnl@evershinecpa.com

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