Bureau of Internal Revenue Chief Kim Henares reminds employers both public and privates sectors that 13th month bonuses of employees that fall below 30 Thousand pesos should be exempted from tax, while any amount exceeding that, will be subjected to its appropriate tax.
Henares made the statement as companies start to release the 13th month bonuses of their employees, including extra holiday and year-end bonuses.
To sum it up, and to further explain Henares’ reminder: If an employee’s total bonus amounted to 40 Thousand pesos, the 30 Thousand pesos will automatically be exempted from tax and only the 10 Thousand pesos remaining should be taxable.
The BIR Chief reminded everybody during a press briefing at the Department of Justice awhile ago that this is included in the BIR laws, and it applies to all employees.
Prior to this, Senate President Protempore Ralph Recto proposed that the ceiling for tax exemption for 13th month bonuses should be raised to 75 Thousand pesos instead of the current 30 Thousand pesos.
Henares junked the said idea, unless Recto could find a law in the constitution that would determine an alternative source of funds that the government will lose if it raises the ceiling amount of tax exemption from employees’ bonuses.