Increase of Tax Exclusion to P82,000 for 13th Month Pay and Other Benefits (BIR Revenue Regulations No. 3-2015; Full Text)

REPUBLIC OF THE PHILIPPINES
DEPARTMENT OF FINANCE
BUREAU OF INTERNAL REVUENUE
Quezon City

March 9, 2015

REVENUE REGULATIONS NO. 3-2015

SUBJECT: Implementing the Provisions of Republic Act No. 10653, More Particularly on the Increase of the Total Amount of Exclusion to P82,000.oo for 13th Month Pay and Other Benefits from Gross Income Effectively Further Amending the Pertinent Provisions of Revenue Regulations No. 2-98

TO: All Internal Revenue Officials and Others Concerned

SECTION 1. SCOPE. — Pursuant to the provisions of Section 4 in relation to section 244 of the National Internal Revenue Code (NIRC) of 1997, as amended, these Regulations are hereby promulgated to implement the provisions of Republic Act (RA) No. 10653, “An Act Adjusting the 13th Month Pay and Other Benefits Ceiling Excluded from the Computation of Gross Income for Purposes of Income Taxation, Amending for the Purpose Section 32 (B), Chapter VI of the National Internal Revenue Code of 1997, As Amended”, more particular on the increase of the total amount of exclusion to Eighty Two Thousand Pesos (P82,000.00) for thirteenth (13th) month pay and other benefits from gross income, further amending, in effect, the pertinent provisions of Revenue Regulations 2-98.

SEC. 2. AMENDATORY PROVISION ON REVENUE REGULATIONS NO. 2-98. — The amount of Thirty Thousand Pesos (P30,000.00), specifically referring to the total amount of 13th month pay and other benefits as one of the exclusions from gross compensation income received by an employee prescribed under the pertinent provisions, including the example computations of Revenue Regulations (RR) No. 2-98, as amended, is hereby increased to “Eighty Two Thousand Pesos (P82,000.00)”, pursuant to the provisions of RA No. 10653.

Accordingly, the amount of P82,000.00 shall ONLY apply to the 13th month pay and other benefits prescribed under the provisions of Section 2.78.1 (B) (11) of RR No. 2-98, as amended, and shall in no case apply to other compensation received by an employee under an employer-employee relationship, such as basic salary and other allowances. Further, it must be emphasized that this exclusion from gross income is not applicable to self-employed individuals and income generated from business.

SEC. 3. TRANSITORY PROVISIONS. — The amount of P82,000.00 shall apply to the 13th month pay and other benefits paid or accrued beginning January 1, 2015.

For the effective implementation of these Regulations, all taxpayers-employers shall ensure the correct computation and application of the said increase on the 13th month and other benefits of the employees, in the year-end adjustments and the same shall be clearly indicated, among others, in the Certificate of Compensation/Tax Withheld (BIR Form No. 2316). The said BIR form shall be issued by the employer to the employee on or before January 31 of the succeeding calendar year, or if the employment is terminated before the close of such calendar year, on the day on which the last payment of compensation is made. In case the employee whose employment is terminated and subsequently employed by another employer before the close of the calendar year, the employee-transferee shall immediately furnish the new employer the accomplished BIR form issued by the previous employer for the appropriate withholding tax computation of the employee’s regular compensation and subsequent year-end adjustment, if any.

SEC. 4. PENALTIES. — Any violation of these Regulations shall be subject to the corresponding penalties under the pertinent provisions of the NIRC of 1997, as amended, and applicable regulations issued by the BIR.

SEC. 5. SEPARABILITY CLAUSE. — If any provisions of these Regulations is declared invalid by a competent court, the remainder of these Regulations or any provision not affected by such declaration of invalidity shall remain in force and effect.

SEC. 6. REPEALING CLAUSE. — The provisions of any existing regulations, rulings or orders, or potions thereof inconsistent with the provisions of these Regulations are hereby revoked, repealed or amended accordingly.

SEC. 7. EFFECTIVITY. — These Regulations shall take effect fifteen (15) days immediately after publication thereof in a leading newspaper of general circulation.

CESAR V. PURISIMA
Secretary of Finance

Recommending Approval:

KIM S. JACINTO-HENARES
Commissioner of Internal Revenue

28 thoughts on “Increase of Tax Exclusion to P82,000 for 13th Month Pay and Other Benefits (BIR Revenue Regulations No. 3-2015; Full Text)

  1. William

    If the taxpayer is a minimum wage earner but has a rental income of P100,000 during the taxable year, will the salary, overtime pay, hazard pay and holiday be subject to tax?

    Reply
  2. cris

    Good pm sir!
    My husband is working in a govt. office but their company deducted tax from their 13th month pay and 14th month pay last May 2016, but the amount is only 43,000. Is the deduction valid? What they should do? thank you

    Reply
  3. Therese

    If your 13th month pay given last May is 50k and 14th month this December is 50k, will you add the 2 to get 100k and deduct 32k as tax?

    Reply
  4. airyn

    Hi, can you confirm if the cap of 82,000 tax exemption shall be separately applied to
    13th month pay and bonuses
    or the 82,000.00 shall be deducted from the gross computation of all the bonuses?

    appreciate feedback on this. thank you

    Reply
  5. mike

    Good day just recieve my 13th month pay last november 4, 2016, but i was surprise that 15% was deducted… for the last 2 years of employment in my company this is the first time they had deducted 15% in my 13th month pay. As i discussed this with our HR they said that according to their tax lawyear. The rule only applies for enployees, and employees with 32% deduction, as they stated my employment category is “consultant” basis thats why im not qualified for the said ruling…

    I would like to ask if this rule applies to me since my salary is not exceeding 82k and this is the only benifit i have, my company is not paying for my SSS,pag-ibig,philhealth. This is the only benifit i have since i started in my company and was told that i am a consultant in a contractor basis with annual renewal

    Reply
  6. Charmie

    I am from an ROHQ company. I am paying 15% tax from my monthly salary. My 13th month pay is less than 82k. Should it be fully taxed or should I be exempted from the 15% tax? Thank you for those who will answer.

    Reply
  7. Cherry

    Hi, Our incentives has not been reached 82,000PHP but the employer deducted it. And we are not taxable yet. They can’t provide us any reason to what happen? What action plan we need to do?

    Reply
  8. gellin

    Does it mean that if the 13th month and other benefits exceeds 82k it is also taxable plus the monthly taxable income? so you will pay twice>?

    Pls help me on this, thanks a lot

    Reply

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