5 Things to Ensure Before submitting BIR Form 2316 to the BIR

At this point in time, we know you are about to give the copy of BIR 2316 (Certificate of Compensation Payment/Taxes Withheld) to each of your employees and afterwards submit the same to the Bureau of Internal Revenue (BIR).

But before you finally hand the forms to them, here are just a few final reminders which we think you should have ensured:

1. No more personal and additional exemptions

Unlike in previous years, the personal exemption amounting to P50,000.00 and additional exemption amounting to P25,000.00 per qualified dependent, up to maximum of four (4) qualified dependent, are no longer allowed to be deducted from gross compensation income, pursuant to the provisions of the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

While the 2316 form generated from the newly updated Alphalist Data Entry and Validation Module (Version 6.1), still has the portion for the status of exemption and the names of qualified dependents (see Item Nos. 9, 9A, 10, and 11 below), the same may not already be applicable considering the provisions of the TRAIN law.

2. De Minimis Benefits

While De Minimis Benefits are not taxable, the amount granted to employees for the taxable year should still be indicated in the form. Hence, if you have given De Minimis Benefits to your employees during the year, then Item No. 38 should be filled-up.

[READ: What are the authorized De Minimis Benefits?]

3. Non-taxable compensation vs. Taxable compensation

The basic is, anything in excess of the P90,000.00 allowable threshold is taxable.

[READ: 12 Non-taxable Compensation of Government Employees]

However, not all compensation received by the employee such as overtime pay, step increment, honoraria, hazard pay, etc., may be subjected to the P90,000.00 threshold.

[READ: Step-by-step procedures on how to compute Income Tax of employees receiving purely compensation]

4. Give the copy of 2316 to employees on or before January 31

The 2316 should be given to each employee, qualified under Substituted Filing, on or before January 31. Hence, you must ensure that you keep evidence of your compliance of the same.

5. Prepare 2316 in duplicate copies and submit to the BIR the scanned copies of the same not later than February 28, as follows (pursuant to Revenue Regulation No. 2-2015):