Tag Archives: income tax

Republic Act No. 10653: Adjusting the Ceiling for 13th Month Pay and Other Benefits for Tax Computation

Republic of the Philippines
Congress of the Philippines
Metro Manila
Sixteenth Congress
Second Regular Session

REPUBLIC ACT NO. 10653

AN ACT ADJUSTING THE 13TH MONTH PAY AND OTHER BENEFITS CEILING EXCLUDED FROM THE COMPUTATION OF GROSS INCOME FOR PURPOSES OF INCOME TAXATION, AMENDING FOR THE PURPOSE SECTION 32(B), CHAPTER VI OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Section 32(B), Chapter VI of the National Internal Revenue Code of the Philippines (Republic Act No. 8424) is hereby amended as follows:

“SEC. 32. Gross Income. —
“x x x
“(B) Exclusions from Gross Income. — The following items shall not be included in gross income and shall be exempt from taxation under this Title:
“xxx

“(7) Miscellaneous Items. — “xxx

“(e) 13th Month Pay and Other Benefits. — Gross benefits received by officials and employees of public and private entities: Provided, however, That the total exclusion under this subparagraph shall not exceed eighty-two thousand pesos (P82,000) which shall cover:
“xxx

“(iv) Other benefits such as productivity incentives and Christmas bonus: Provided, That every three (3) years after the effectivity of this Act, the President of the Philippines shall adjust the amount herein stated to its present value using the Consumer Price Index (CPI), as published by the National Statistics Office (NSO).”

SEC. 2. Implementing Rules and Regulations. — The Secretary of Finance shall promulgate the necessary rules and regulations for the faithful and effective implementation of the provisions of this Act: Provided, That, the failure of the Secretary of Finance to promulgate the said rules and regulations shall not prevent the implementation of this Act upon its effectivity.

SEC. 3. Repealing Clause. — All laws, orders, issuances, circulars, rules and regulations or parts thereof which are inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

SEC. 4. Separability Clause. — If any provision of this Act is declared unconstitutional or invalid, other parts or provisions hereof not affected thereby shall continue to be in full force and effect.

SEC. 5. Effectivity. — This Act shall take effect fifteen (15) days following its publication in at least two (2) newspapers of general circulation.

Approved: 12 February 2015.

More from Your Bonus: A Welcome Valentines Gift

Government has a bit of Valentines gift to people who rely on salaries to support themselves and their families — an increase in the tax exemption for 13th month pay and other bonuses/benefits. On 12 February 2015, two days before Valentines, President Aquino signed Republic Act No. 10653 (full text), increasing the tax exemption of bonuses from P30,000 to P82,000. Continue reading

Republic Act 7833: Excluding 13th Month Pay and Bonuses from Tax Computation (Full Text)

REPUBLIC ACT NO. 7833

AN ACT TO EXCLUDE THE BENEFITS MANDATED PURSUANT TO REPUBLIC ACT NO. 6686 AND PRESIDENTIAL DECREE NO. 851, AS AMENDED, AND OTHER BENEFITS FROM THE COMPUTATION OF GROSS COMPENSATION INCOME FOR PURPOSES OF DETERMINING TAXABLE COMPENSATION INCOME, AMENDING FOR THE PURPOSE Sec. 28(B)(8) OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED

Continue reading

Increase the Maximum Bonus and 13th Month Pay Tax Exemption?

A proposal is currently pending in the Senate to increase the tax exemption of 13th month pay, Christmas bonuses, productivity incentives and similar benefits — from the original maximum tax-free amount of P30,000 to P75,000. The proposal also provides for an adjust of the cap every three years, to raise the maximum exemption to its present value using the consumer price index. Under existing laws, any amount beyond P30,000 is subject to income tax. Continue reading