What is Annualized Withholding Tax (Alphalist) ?

What is alphalist?

The AlphaList report generates an alphabetical list of employees who have paid tax in line with Philippine Revenue Regulations 10-08: ftp://ftp.bir.gov.ph/webadmin1/pdf/42126rr%2010-2008.pdf


This report also contains information on taxes deducted by employers from their employees' wages. It also includes the computations for tax refund and tax payable at the end of the year.


The Alphalist contains 3 documents

1- Alphabetical list of employees from whom taxes were withheld (BIR Format) : http://goo.gl/3Hvgu

The report divides the information into the following categories:

  • A. Employees with no previous employers during the financial year
  • B. Employees with previous employers during the financial year
  • C. Employees terminated before the end of the financial year

2. BIR 1604CF: ftp://ftp.bir.gov.ph/webadmin1/pdf/154491604-CFfinal.pdf

This return shall be filed in triplicate by every employer and shall be filed on or before Jan 31 of the year following the calendar year


3. CD/USB Submission

Ten (10) or more numbers of employees, the employers are required to submit this reports with BIR in soft copies. A new data entry and validation module (version 3.4) is already available which can be downloaded on the BIR website to comply with the bIR file format.

http://www.bir.gov.ph/downloadables.htm#avm3

This can only be used in Windows OS as it is a .exe format.


How to compute annualized withholding tax?

A. Employees with no previous employers during the financial year

Sample Computation:
Bob, married with 2 qualified dependent children who received the following compensation for the year.

  • Basic Monthly Salary : ( P45,000 X 12 months) P 540,000
  • SSS/Philhealth for the year: Php 11,400.00
  • Overtime Pay for the year : P5,000
  • 13th month Pay for the year : P45,000
  • Other Benefits for the year : P12,000
  • Withholding Tax (Jan-Dec : P118,082.00

Computation:

  • Total Gross Compensation: P 602,000.00 (Basic pay + Overtime + 13th month pay + Other Benefits)
  • Less: SSS / Philhealth / Pag-Ibig: 11,400
  • Less: Non Taxable Allowance: 30,000 | 41,400.00
  • Total Taxable Compensation: 560,600.00
  • Less: Personal exemption: 50,000
  • Additional exemption (2 X 25,000): 50,000 | 100,000.00

Net Taxable Compensation: 460,600.00


The Tax Due is

  • For the first 250,000 tax is: 50,000.00 Plus 30% of excess over 250,000
  • ( 460,600 - 250,000= 210,600) X 30%: 63,180.00
  • Total tax due is: 113,180.00
  • Less: Tax Collected for the year: 118,082.00
  • Tax Refund for the year is: 4,902.00

Tax Payable: If total tax due > total tax collected for the year
Tax Refund: If total tax due < total tax collected for the year
Break even: If total tax due = total tax collected for the year


B. Employees with previous employers during the financial year

Sample Computation:
Bob, single employee and he was previously employed by Company A from January - June. He started his new job under Company B effective July 1, 2013.


Company A Compensation Details
  • Basic Monthly Salary :( P13,000 x 6) = P78,000
  • SSS/Philhealth : Php 3,400.00
  • Overtime Pay from Jan-June: P15,000
  • 13th month Pay: P5,000
  • Other Benefits: P15,000
  • Withholding Tax (Jan-June): P7,539.00

Company B Compensation Details
  • Basic Monthly Salary : ( P15,000 X 6)= 90,000
  • SSS/Philhealth : Php 4,500.00
  • Overtime Pay from June-July: P10,000
  • 13th month Pay: P8,000
  • Other Benefits: P18,000
  • Withholding Tax (July-Dec): P15, 328.00

Computation:

  • Total Gross Compensation Company A+B: P 239,000.00 Basic + Overtime + 13th Month + Other Benefits
  • Less: SSS/Philhealth/Pag-Ibig Company A+B ( 3,400 + 4,500): P 7,900.00
  • Less: Non Taxable Allowance:
    Company A+B: P 30,000.00 | P 37,900.00
  • Total Taxable Compensation: P 201,100.00
  • Less: Personal exemption: 50,000
  • Net Taxable Compensation: P 151,100.00


The Tax Due is

  • For the first 140,000 tax is: 22,500.00 Plus 25% of excess over 250,000
  • ( 151,100 - 140,000= 11,100 ) X 25%: 2,775.00
  • Total tax due is: 25,275.00
  • Less: Tax Collected Company A+B: 22,867.00 (7,539 + 15,328.00)
  • Tax Payable for the year is: 2,408.00

Tax Payable: If total tax due > total tax collected for the year
Tax Refund: If total tax due < total tax collected for the year
Break even: If total tax due = total tax collected for the year


C. Employees terminated before the end of the financial year

Sample Computation:
Bob, married with 1 qualified dependent and filed resignation effective July 31, 2013.

  • Basic Monthly Salary : ( P45,000 X 7 months) P 315,000
  • SSS/Philhealth paid until July: Php 7,350.00
  • Overtime Pay : P15,000
  • 13th month Pay : P28,000
  • Other Benefits for the year : P18,000
  • Withholding Tax : P72,540.00

Computation:

  • Total Gross Compensation: P 376,000 (Basic pay + Overtime + 13th month pay + Other Benefits)
  • Less: SSS / Philhealth / Pag-Ibig: 7,350.00
  • Less: Non Taxable Allowance: 30,000.00 | 37,350.00
  • Total Taxable Compensation: 338,650.00
  • Less: Personal exemption: 50,000 | 50,000.00
  • Net Taxable Compensation: 288,650.00

The Tax Due is

  • For the first 250,000 tax is : 50,000.00 Plus 30% of excess over 250,000
  • ( 288,650.00 - 250,000= 38,650 ) X 25% : 11,595.00
  • Total tax due is : 61,595.00
  • Less: Tax Collected Company : 72,540.00
  • Tax Refund for the year is : 10,495.00

Tax Payable: If total tax due > total tax collected for the year
Tax Refund: If total tax due < total tax collected for the year
Break even: If total tax due = total tax collected for the year