How to compute withholding tax on compensation, including overtime pay?

Hi blessed day. May I just inquire regarding taxation?

I am employed as Medical Specialist I in an LGU hospital. My appointment is casual with appointment. As a doctor, we go on 24-hours duty a day, exceeding the required minimum number of 40 hours a week. Our excess time is paid under “overtime pay”. My question is, does my overtime pay has to be deducted a 30% aside from the 30% deduction from my basic pay?

Coz our accounting office does that. They deduct 30% from my basic pay. Then they also deduct another 30% from my seperate voucher for my overtime pay. Is’nt it too big? So I am deducted a total of 60% a month for my tax?

Responses to this question:

Your overtime pay is still part of your taxable compensation, so if you belong to the 30% bracket, then your OT pay should also be taxed for the same rate.

And no, you were not taxed 60% a month. You don’t simply add the percentages together.

Aylene Garcia

Separate naman basic pay and overtime pay. So technically 30% lang naman nawithhold [sayo]. Tsaka wag po mag alala sa withholding tax, kung sobra man nabawas sayo, maibabalik man yan thru refund and magbabayad ka din kung kulang na-withhold sa iyo at the end of the year.

Remember, ang taxable sayo is entire income not basic only.

Roger Bagacina Vilar

The 30% you are referring here is the amount of tax withheld in the overtime you actually received. The same manner that the 30% deducted from your salary refers to the amount of tax withheld for your salary during the period. The more compensation you receive, the more taxes shall be withheld.

Haide Somido Primavera

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