In 2018, we have released a comprehensive FAQs about BIR Form 2316 to provide answers to the most common questions we received since releasing this article below. You can check it out here. If you are an employer seeking an assistance on filling out Form 2316, jump over to this article discussing how to properly fill out the form.
Ever since we published the article on the BIR Form 2316, we’ve received a lot of questions about it. Below are some of the most frequently asked questions about the BIR Form 2316.
1) Can I request a 2316 from my company for visa application/travel/lost my copy/etc?
Yes, you can. But they are not obliged to give you one. If you read in our original article, the employer is only required to issue 2316 on two occasions: (1) on or before January 31 of every year, (2) on the day the last payment of compensation is paid. This is covered by BIR RR 11-2013.
2) I left my company. Can I request a 2316 from my previous employer?
Yes, you can. And as stated above, they are only obliged to give you one on the day of your last compensation (or as what we’re familiar with, back pay).
However, if they didn’t give you one, bring up the revenue regulation stated above. Then call the BIR for the next steps if they still don’t give you one.
3) My employer doesn’t want to issue a 2316, can I request this from the BIR?
Yes, you can. But you won’t be able to get any.
According to the BIR, all records, such as 2316 files of individual employees, upon receipt by the respective Regional District Offices (RDOs), go directly to their warehouse.
The BIR would, most likely, not spend time digging through their archives for a single individual’s tax return.
Your best bet is to ask from your employer.
4) I resigned from my company. Do I get a tax refund?
This depends on how your previous employer calculates their tax deductions.
On another note, tax refunds shouldn’t be your only concern. You might also get a tax deficit.
See, the concept of income tax is vague to a lot of Filipinos. Simplifying this, there is just one table to refer to. The problem is that it is on an annual basis.
| Amount of Net Taxable Income | Rate | |
|---|---|---|
| Over | But Not Over | |
| 10,000 | 5% | |
| 10,000 | 30,000 | 500 + 10% of the Excess over 10,000 |
| 30,000 | 70,000 | 2,500 + 15% of the Excess over 30,000 |
| 70,000 | 140,000 | 8,500 + 20% of the Excess over 70,000 |
| 140,000 | 250,000 | 22,500 + 25% of the Excess over 140,000 |
| 250,000 | 500,000 | 50,000 + 30% of the Excess over 250,000 |
| 500,000 | 125,000 + 32% of the Excess over 500,000 in 2000 and onward | |
What that means is that the monthly deductions your employer makes is only an approximation of the income you earned and consequently the taxes applied to it.
5) Why do I need to submit a 2316 to my new employer?
The main reason you submit a 2316 to your new employer is to accurately calculate the income you earned for the given year and the appropriate taxes for it.
Going back to the table above, if your single and your monthly net income is 20,000, in a year you earn 240,000. You should be taxed 35,000. The formula for this calculation is 22,500 + (25% x (240,000 – 50,000 – 140,000)).
Note: the 50,000 in the formula is for the personal exemption for a single.
This is easy if you didn’t have any change in status or changed employers. But if you switched companies, your present employer doesn’t know how much you earned / taxed. The 2316 tells them all those information. That way, they correctly calculate the taxes you need to pay.
6) What happens when I do not give my new employer a 2316?
If you do not give your new employer a 2316, they will be forced to deduct taxes as if you haven’t earned any income nor paid any taxes before.
Let’s use the example above of 20,000 / month salary. You were employed by Company A from January 1 to June 30, and by Company B from July 1 to present.
During your employment with Company A, you were already deducted taxes every pay period to approximate your yearly income and income tax. That should amount to ~17,500 or half of the taxes you should pay for the year.
So if you don’t have a 2316 to present to Company B, they will only have to assume that you haven’t paid any taxes. That means Company B will have no choice but to use the only information available with them, which is you earning 20,000 from July 1 to present.
Yes, applying the calculations you will get a smaller income tax payable. However, this affects your “proof of income” in the future as well.
Remember, at the beginning of every year, your employer is required to give you a 2316. This is used by other companies and organizations as proof of your earnings. So if you’re applying for a visa or applying for a loan, your standing will greatly be affected.
7) I changed employers in a single year, do I need to file BIR Form 1700?
Normally, you don’t need to do this, but it’s best to ask your employer. There are a lot of conditions stated in RR 3-2002 that covers employees qualified for substituted filing.
Again, it pays to know that you need to do these things; rather than not knowing then get slapped with a penalty.
8) What are the best practices for handling 2316?
One of the best practices you should do when you receive a 2316 is to take a photo or scan it. Save that document so whenever you need it, you can just provide a copy. Do this every year when you receive it.
This applies to all your work files and personal data. You should have a copy of all 2316, your employment contracts, etc. That way, you don’t need to go through the hassle of going back to your HR to get these.
Do you have more questions? Let us know in the comments below.