2316 Process & Annual Tax Refunds
BIR Form 2316 or Certificate of Compensation Payment
What is BIR Form 2316?
The BIR Form 2316 or Certificate of Compensation Payment/Tax Withheld is an official document that states an employee's gross income and the appropriate taxes withheld by the employer during the fiscal year. BIR Certificates like this prove that an employee's pay was subjected to income tax.
In the Philippines, all companies that engaged any employee during the previous year must submit Form 2316 to the Bureau of Internal Revenue. This form is accomplished for each employee who received a salary or any other form of remuneration during the last fiscal year.
Why is it essential for employees and employers?
Overall, Form 2316 enables the BIR to monitor a company's tax compliance. Upon filing, employee information (e.g., work tenure, salaries, etc.) is gathered and analyzed to ensure that the correct amount of tax is subjected to the enterprise.
Moreover, this is an important document to give an employee when switching jobs to allow the new employer to correctly compute the tax withheld for the remainder of the year.
Other reasons why the BIR Form 2316 is essential.
- It provides proof of financial capacity for credit card applications, loans, visas, scholarships, and more.
- It serves as an official financial document to meet requirements.
- For ex-pats, it's proof of tax payment for availing of tax credits in their home country.
In a nutshell, the BIR Form 2316:
- Is an annual tax return form that all Philippine companies must submit to the BIR that had engaged employees within the previous calendar year
- Identifies the total amount of compensation each employee was given, and the total tax withheld from their wages.
- And must be prepared and filed for all employees who received a salary or other remuneration from the employer within the previous year.
Tax Refund
Related Articles
Philippine Tax Implications on Employee Benefits
Tax Exempt De Minimis Benefits to Employees in The Philippines De minimis benefits are non-taxable up to a certain monetary limit, which is currently set at PHP 90,000 per year. This means that if the total value of the benefits received by an ...Compensation Withholding Tax
How to Compute your Philippine BIR Compensation Taxes? The following is the required information for you to compute your income tax: Social Security System (SSS) Contribution for the month Philippine Health Insurance Corporation (PHIC) Contribution ...EastWest Healthcare Schedule of Benefits
EastWest Healthcare Schedule of Benefits Attached is the EastWest Healthcare Schedule of Benefits.HMO Billing to Clients
HMO Billing to Clients HMO is a private organization that provides health insurance to employees and cooperates with health care providers such as hospitals, clinics, doctors, etc. This benefit is usually given to the staff upon his/her start date or ...Pag-IBIG Multi-Purpose Loan Application
Pag-IBIG Multi-Purpose Loan Application Procedure Step 1: Submit the accomplished Multi-Purpose Loan Application Form to Finance Department for verification and signature. Note: Do not accomplish the “Certificate of Net Pay” portion at the back of ...