What is an Alphalist?
The AlphaList report generates an alphabetical list of employees who have paid tax in line with Philippine Revenue Regulations 10-08: (Source: BIR)
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.
- 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
The Alphalist contains 3 documents
- Alphabetical list of employees from whom taxes were withheld (BIR Format) : The report divides the information into the following categories:
- Employees with no previous employers during the financial year
- Employees with previous employers during the financial year
- Employees terminated before the end of the financial year
- BIR 1604CF: 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
- 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. Click here to download the module. Note: 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 Scenario : John, married with 2 qualified dependent children 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
Here’s how to compute John’s Net Taxable Compensation:
| Total Gross Compensation* | P 602,000.00 | |
| Less: SSS / Philhealth / Pag-Ibig: | (P 11,400.00) | |
| Less: Non Taxable Allowance: | (P 30,000.00) | |
| (P 41,400.00) | ||
| Total Taxable Compensation: | P 560,600.00 | |
| Less: Personal exemption: | (P 50,000.00) | |
| Less: Additional exemption (2 X 25,000): | (P 50,000.00) | |
| (P 100,000.00) | ||
| Net Taxable Compensation: | P 460,600.00 |
*(Basic pay + Overtime + 13th month pay + Other Benefits)
Now we need to figure out how much is the Tax Due for your employee. You can refer to this formula from BIR:
| Over | But not Over | Amount Rate | of Excess Over |
| not over | 10,000 | 5% | |
| 10,000 | 30,000 | 500 + 10% | 10,000 |
| 30,000 | 70,000 | 2,500 + 15% | 30,000 |
| 70,000 | 140,000 | 8,500 + 20% | 70,000 |
| 140,000 | 250,000 | 22,500 + 30% | 140,000 |
| 250,000 | 500,000 | 50,000 + 30% | 250,000 |
| 500,000 | over | 125,000 + 32% | 500,000 |
(Source: BIR)
| For the first P 250,000.00, tax is | P 50,000.00 |
| Plus 30% of excess over 250,000* | P 63,180.00 |
| Total tax due is | P 113,180.00 |
| Less: Tax Collected for the year | (P 118,082.00) |
| Tax Refund for the year is | P 4,902.00 |
*(Net Taxable Compensation – 250,000) X 30%
B. Employees with previous employers during the financial year
Sample Scenario: Bob, a single employee who was previously employed by Company A from January – June and 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
Here’s how to compute Bob’s Net Taxable Compensation:
| Total Gross Compensation Company A+B**: | P 239,000.00 | |
| Less: SSS/Philhealth/Pag-Ibig Company A+B | (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 | (P 50,000.00) | |
| Net Taxable Compensation: | P 151,100.00 |
**Basic + Overtime + 13th Month + Other Benefits
Using the same formula from BIR stated earlier, here’s how to compute for Bob’s Tax Due:
| For the first 140,000 tax is: | P 22,500.00 |
| Plus 25% of excess over 250,000**: | P 2,775.00 |
| Total tax due is: | P 25,275.00 |
| Less: Tax Collected Company A+B: | (P 22,867.00) |
| Tax Payable for the year is*** | P 2,408.00 |
** ( Net Taxable Compensation – 140,000) X 25%
*** Company B needs to collect this amount from Bob
C. Employees terminated before the end of the financial year
Sample Scenario: Mary, 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
Here’s how to compute Mary’s Net Taxable Compensation:
| Total Gross Compensation**: | P 376,000 | |
| Less: SSS / Philhealth / Pag-Ibig | (P 7,350.00) | |
| Less: Non Taxable Allowance: | (P 30,000.00) | |
| (P 37,350.00) | ||
| Total Taxable Compensation: | P 338,650.00 | |
| Less: Personal exemption | (P 50,000.00) | |
| Net Taxable Compensation: | P 288,650.00 |
**(Basic pay + Overtime + 13th month pay + Other Benefits)
Using the same formula from BIR stated earlier, here’s how to compute for Bob’s Tax Due:
| For the first 250,000 tax is: | P 50,000.00 |
| Plus 30% of excess over 250,000** | P 11,595.00 |
| Total tax due is : | P 61,595.00 |
| Less: Tax Collected Company | (P 72,540.00) |
| Tax Refund for the year is | P 10,495.00 |
**(Net Taxable Compensation – 250,000) X 25%
