What is Annualized Withholding

Tax (Alphalist) ?
What is alphalist?
The AlphaList report generates an alphabetical list of employees who have
paid tax in line withPhilippine Revenue Regulations 1008: 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