Tax on Personnel under Job Order and Contract

Tax on Personnel under Job Order and Contract of Services

Revenue Regulation No. 2 -98 Government Agencies are required to withhold the following: 1. Income taxes to income payments – 2% or 1% of local supplier of services/goods – 10% of local professional with gross income not exceeding P 720, 000. 00 – 15% of local professional with gross income if exceeding P 720, 000. 00

Revenue Regulation No. 2 -98 2. Business taxes to income payment – 3% other percentage tax if the annual gross income would not exceed P 1, 919, 500. 00 – 12% other percentage tax if the annual gross income exceeds P 1, 919, 500. 00 – 5% final withholding vat

Revenue Memorandum Circular No. 130 -2016 Clarification on the Tax Treatment and Appropriate Withholding Taxes on Income Payments by Departments and Agencies of the Government, Including Government-Owned and/or Controlled Corporations and Government Financial Institutions to Individuals Engaged under a Job Order or Contract of Service Arrangement

Revenue Memorandum Circular No. 130 -2016 Classification Creditable Withholding Tax (10% or 15%) Professionals (all profession requiring government licensure examinations and/or regulated by the Professional Regulations Commission, Supreme Court, etc. ) Non-professional 15% if the gross income for the current year exceeds P 720, 000. 00; 10% if otherwise. Percentage Tax (3%) Note: With PRC License but different job description (RN performs as Public Health Assistant considered as Non- professional)

Responsibilities of Personnel (Job Order/Contract of Service) 1. Registration with the BIR 2. File and Pay of Income and Business Taxes – Monthly – Quarterly – Annual

Responsibilities of Personnel (Job Order/Contract of Service) Tax Type 1. Annual Registration Fee 2. Monthly Percentage Tax BIR Form 0605 2551 M When to Pay/File Penalty 1. 25% surcharge 2. 20% interest On or before January 31 annually Note: File and Pay (P 500. 00) 3. Compromise penalty Not later than the 20 th day following the end of each month P 1, 000. 00 Note: Filing only, tax compromise penalty certificate per BIR Form No. 2307 for the month will be used to support the filing of tax return

Responsibilities of Personnel (Job Order/Contract of Service) Tax Type 3. Quarterly Income Tax BIR Form 1701 Q When to Pay/File 1 st quarter – on or before April 15 of the current taxable year 2 nd quarter – on or before August 15 of the current taxable year 3 rd quarter – on or before November 15 of the current taxable year Note: File and Pay, tax certificate per BIR Form 2307 covering the quarter will be used as creditable withholding tax 4. Annual Income Return Tax 1701 Penalty With payable 1. 25% surcharge 2. 20% interest annually 3. Compromise penalty With overpayment 1. P 1, 000. 00 compromise penalty With payable On or before April 15 of each 1. 25% surcharge year covering income for the 2. 20% interest annually preceding taxable year 3. Compromise penalty Note: File and Pay, tax certificate per BIR Form No. 2307 covering the quarter will be With overpayment used as creditable withholding tax; 1. P 1, 000. 00 compromise st th accumulated income from 1 to 4 penalty quarters and the corresponding tax due

Where to get Form 2307? • Every 10 th day of the month in the below offices: – HRDU Office – Deployment – Personnel Office – Job Orders