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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 living with the taxpayer and not more than 21 years old, unmarried and not employed.
2. How much is your SSS,Philhealth,and HDMF (Pag-Ibig) monthly contributions? With your Monthly Basic Pay(Salary) you can immediately know your contributions.
SSS Table
PhilHealth Table
3. Are you receiving other allowances like laundry allowance,transportation allowances, rice allowances,etc.? If yes how much? You need this later on when you compute your withholding tax because these are not taxable. Failure to note this may result to erroneous result of computation.
5.Factors you need to consider when solving your withholding tax (Applicable for Old Tax Ruling). Factors that increases your tax: - Overtime Pay - Holiday Pay - Night Differential Factors that decreases your tax: - Late/Tardiness - Allowances - SSS Contribution - Philhealth Contribution - HDMF Contribution - Personal Exemptions (ex. single, head of the family, head of the family with qualified dependents,etc)
6. You must have a copy of BIR Tax Table. See Slide #5.
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 or Base Tax] Where as Taxable Income=[Gross (Basic)Monthly Income+ Overtime Pay+Holiday Pay+Night Differential] - (minus) [Tardiness Deduction+Allowances+SSS Contribution+Philhealth Contribution,HDMF Contribution] Note: Before Solving For your Withholding Tax, find your Taxable Income first and simply substitute the value in Withholding Tax Formula.
Parts of Tax Table - Bracket or Exemption - %over - Bracket Tax or Base Tax
Illustration
Assuming your tax is computed in a monthly basis and you already computed your TAXABLE INCOME (not your gross income) totaling to P8,558 and you are Single then: Corresponding Bracket or Exemption:P6,667.00 Corresponding %over: 15% or.15 Corresponding Bracket Tax or Base Tax: P208.33
Withholding Tax = ( ([Taxable Income] - [Bracket or Exemption] ) x [%over] ) + [Bracket Tax or Base Tax]
When finding for the corresponding Bracket or Exemption and %over just look: - The row of your STATUS(ex. Single,Head of the Family,Married,and etc.)on the table. - 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. - 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.