Filing taxes can be a stressful process, but the right guidance will make it much simpler. The BIR Form 2316 is an important document that anyone who receives income must submit annually. Moreover, employers are required to submit the form on behalf of their employees unless the employee is required to file an annual ITR. Learn how to complete this form correctly with this definitive guide.
What is BIR Form No. 2316
BIR Form No. 2316 or Certificate of Compensation Payment / Tax Withheld For Compensation Payment With or Without Tax Withheld is a certificate issued by the employer to each employee that shows the total compensation or salary and total taxes withheld therefrom during the calendar year.
Read the Instructions Carefully
Before you begin filling out the form, read all of the instructions on the top of the page carefully. Instructions are provided to help you understand which information to enter in each field, as well as what documents you may need to present with your form. Make sure that you thoroughly familiarize yourself with this information before beginning.
How to accomplish BIR Form 2316
1. Form Version
Last March 30, 2022, Bureau of Internal Revenue (BIR) through RMC 34-2022 announced the availability of the new version of BIR form 2316 i.e. September 2021 ENCS which included an additional line pertaining to the 5% tax credit under Personal Equity and Retirement Account (PERA) Act of 2008.
2. Covered Period
Item 1 pertains to the calendar year e.g., 2022. While Item 2 FROM pertains to the start of the year i.e. 01/01 unless the employee joined on a later date e.g. 06/02, you will indicate such date. While TO pertains to the end of the year i.e., 12/31 however if the employee resigned before said date, you will indicate the last working date e.g., 11/30.
3. Parts of BIR Form 2316
Part I – Employee Information
Fill in items 3 to 8 while items 9 to 11 are allotted to employee-Minimum Wage Earner (MWE).
Part II – Employer Information (Present)
Fill in all items. As for Item 15, you need to tick Secondary Employer if the employee is a part-timer otherwise tick Main Employer.
Part III – Employer Information (Previous)
Leave this part blank if the employee has no previous employer or was not able to furnish the BIR Form 2316 from his/her previous employer for the same calendar year. Otherwise, fill in all items.
Part IV-A - Summary
Fill in all items except those not applicable. Compute for the Taxable income and the tax due for the year. Do not forgot to use the applicable BIR annual tax table.
Items 22 and 25B are data coming from the previous employer. Pursuant to Revenue Regulation 17-2011 and 6-2021, added in the form is item 27 which is the 5% tax credit from PERA Act of 2008. Fill them out, if applicable. Otherwise, leave them blank.
Part IV-B – Details of Compensation Income and Tax withheld from the Present employer.
Section A itemized the non-taxable compensation income received by the employee. Item 38 is the total of Items 29 to 37 which pertain to the following:
Item 29 is the Basic salary received and has a maximum annual limit of P250,000.
Item 30 to 33 are the other non-taxable incomes received by a MWE namely holiday pay, overtime pay, night shift differential and hazard pay. Leave these items blank, if not applicable.
Item 34 is the 13th month pay and other benefits which is maxed at P90,000 for the year.
Item 35 is the total de minimis benefits e.g., rice subsidy, uniform and clothing allowance.
Item 36 is the employee’s mandatory share to SSS, HDMF/Pag-ibig, Philhealth and Union dues.
Item 37 pertains to other non-taxable salaries and compensation.
Section B itemized the taxable compensation income received by the employee. Item 52 is the total of Items 39 to 51 which consist of basic salary, various allowances, taxable 13th month pay (excess amount in P90,000), director’s fees if in case the director is receiving a compensation from the company and other fixed allowances.
Employer and employee signatures are on items 53 and 54. Please bear in mind that one’s signature signifies abiding to law on perjury and the data Privacy Act of 2012.
5. Substituted Filing
Finally, if an employee falls under the criteria for substituted filing, signatures for Items 55 and 56 are needed. Otherwise, leave them blank.
Hoping that this article will help employer and most especially the employees understand the contents of BIR Form 2316. Let us continue working and earning while giving our best effort in 2023! To further your knowledge, you may visit our article on Philippine Payroll Tax Annualization, as well!
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