This year had been a very rough year and at this point, we just want to forget it and go to the next, hoping it will be better. But for that to work out, we also have to prepare to tackle it.
One of the things we should prepare during this year-end season is our taxes, so here is another important BIR form to start working on now for a stress-free filing next year!
If you missed our last blog, check out the things you should know about BIR Form 1604-CF here.
What is BIR Form 2316?
BIR Form 2316 or the Certificate of Compensation Payment/Tax Withheld, is a form that must be filed with the Bureau of Internal Revenue, or the BIR, by employers in the Philippines every calendar year.
BIR Form 2316 is completed and issued to each employee that receives a salary, wage, or any other form of remuneration from the employer. The Certificate should identify the total amount of compensation paid to, and the total taxes withheld from, each employee during the previous calendar year.
What is the Purpose of BIR Form 2316?
It serves the purpose of ensuring that employees have clarity on the amount of tax that has been withheld from them in a particular year.
It is also a way for the BIR to monitor employer taxpayers and ensure that the employer has actually submitted the tax withheld to the BIR for the relevant year.
BIR Form 2316 is also important when employees are changing employers. This is to clarify what taxes have been withheld already from the employee and consolidate this with withholding tax requirements under the new employer.
This certificate can also for getting a visa, loan, scholarship, credit card, and other types of application.
Who files BIR Form 2316 – the employer or the employee?
Both are required to sign the form, but the employer should be the one to file Form 2316 to the BIR.
The employer must file 3 original copies with the BIR – one for the BIR, one for the employer and one for the employee.
When does BIR Form 2316 have to be filed?
In previous years, it was the case that BIR Form 2316 had to be filed on or before January 31 of the calendar year following the year in which the compensation was paid to employees.
During this year, the deadline has been moved to March 31, however, the deadline for 2021 has not been announced yet.
What are the information Needed?
- Employee Details – Name, Tax Identification Number, address, date of birth, contact number, salary, etc.
- Employer Details – much of this information can be found on the company’s BIR Form 2303
- Total compensation paid – computation of the total compensation paid by the employer to a particular employee during the previous calendar year
- Total Tax Withheld – computation of the total amount of tax withheld from the employee during that same year.
- Non-Taxable/Exempt Compensation Income – Examples might include benefits like, SSS, Philhealth, Pag-IBIG, etc.
If you need any help with preparing and filing this BIR Form or any other accounting or tax compliance tasks, F&Q is here to support you! Contact us today by emailing email@example.com .