CASH INCENTIVES

Good day, atty!


Sa company po namin ay meron kaming cash incentives.

3,000.00 -Perfet attendance Incentive (monthly)
3,000.00++- Students Incentive (monthly)
and renewal incentive,ang amount po ay depende po sa number of students na nag renew.

So every month,maari pong maka-receive ang isang employee ng incentive amounting to 6,000.00 or more depende po sa dami ng students.

According to BIR po,total of 30,000.00 pesos in a year is considered non taxable.Hence, the maximum non taxable incentives should be 4,500.00 every month. But, if the amount is beyond 30,000.00, magging taxable po sya.

However, the company did not deduct any amount of tax from the incentive every month for those employees who went beyond 4,500.00 every month. Ngaun po, may mga emplayado na nag negative ng 21,000.00 sa BIR because the company didn't deduct anything from the incentives.

Ang questions ko po,

1. Taxable po ba ang incentives?
2. Is it true na pag ang incentive ay lumagpas ng 4,500 monthly, magging taxable na po sya?
3. Should it be considered company's fault?


I am hoping for your reply. Thank you po.

1) yes
2) yes, but only for the part that is more than P30,000 in the year. per month, that's P2,500 per month.
3) yes, but it should still be deducted from the employees.

Thanks again for the reply, atty!

Yes, it should be deductive on a monthly basis if it exceeds the ceiling. However, the employer didn't deduct any amount of tax from the incentives.
Some employees went to BIR, they found out that their contributions turned out to be negative. Meron po dito nag negative ng 25 thousand pesos based on last year's contribution. Ngaun lang po kami nainform ng employer regarding this matter.



1. Does the employee have to pay that amount?