How can employees claim their income tax refund? If you are an employee, you may notice that your employer is deducting and withholding a tax amount on your compensation income on a monthly basis. Your employer is just actually complying with the Bureau of Internal Revenue (BIR).
Employers as withholding agents
In the Philippines, employers are required by the National Internal Revenue Code to deduct and withhold income tax from the compensation of their employees with some exemptions (SEC. 79.A, NIRC, as amended), and then remit them to the BIR by filing the monthly BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation). At the end of the year and before January 31 following that year, employers also file the annual BIR Form 1604-CF (Annual Information Return of Income Tax Withheld on Compensation and Final Withholding Taxes) to report all the withholding taxes on compensation they have remitted to the BIR based on the BIR Form 1601-C they have filed for the entire calendar year.
In a simple explanation, here’s how it goes: employees earn salary or compensation income – compensation income is taxable and should be paid with the BIR. But instead of requiring the employees to file and pay their income tax directly to the BIR, employers are the ones who are deducting, collecting, withholding, and, remitting their income tax to the BIR. In other words, employers serve as withholding agents for the employees’ income tax dues to the BIR. This is also called substitute filing because the employers are the ones who are filing the BIR forms to the BIR instead of the employees.
Employers compute each of their employee’s income tax payable for the month using methods and withholding tax tables prescribed by the BIR. Those computed amounts are what they remit to the BIR.
The excess of tax withheld over tax due of the employee
Now, at the end or before the end of the calendar year prior to the payment of the last payroll, employers compute the total income tax due from the compensation of each employee for the entire taxable year. During the computation, differences may arise between the “tax due from the employee for the entire year” and the “sum of taxes the employer has withheld from January to November”.
Sometimes, the “tax withheld by an employer on the compensation of the employee from January to November” exceeds the “actual income tax due from the compensation of the employee for the calendar year”. This excess is to be refunded by the employer to the employee.
Reasons why tax refunds exist
Over withholding or remittances of employees’ income tax on compensation usually happens when errors in computations occur or when an employee adds a dependent child before the closing of the year causing this to increase the amount of his or her additional exemption, which also reduce his or her income tax due.
An example of this event is when an employee gives birth to a child just before the year ends and claims him or her as an additional dependent for the taxable year.
How to claim your income tax refund
Your tax refund will usually be computed by your employer on or before the end of the calendar year but prior to the payment of the compensation for the last payroll period to determine year-end adjustments. However, when an employee changes status, he or she should file with the employer a new or updated withholding exemption certificate reflecting the change within 10 days from such change (SEC. 79.D.2, NIRC, as amended). This is why when your status changes, you should notify your employer immediately to reflect the change. The withholding exemption certificate you file with your employer is used by him in the determination of the amount of taxes to be withheld.
Once it is determined that the tax withheld from the employee’s compensation has exceeded his or her tax due for the entire year or that he has an overpayment of income tax, the employer is required to give the tax refund to such employee not later than January 25 of the succeeding year (SEC. 79.H, NIRC, as amended).
Take note that employers who will fail or refuse to refund excess withholding tax to employees are liable to a penalty, as imposed by the NIRC (SEC. 252, NIRC, as amended).
Therefore, if it is determined that you have a refundable tax from your compensation, you will ask it from your employer.
However, you need to make sure that you will provide your employer with your accurate and most updated withholding exemption certificate. This is because if you fail or refuse to file the withholding exemption certificate or if you commit fraud by willfully supplying false or inaccurate information in it, you will not be refunded and it will be forfeited in favor of the Government (SEC. 80.B, NIRC, as amended).
Reference: National Internal Revenue Code, as amended, BIR Form 1601-C, BIR Form 1604-CF
Disclaimer: New and subsequent tax rulings, issuances and or laws in the future may render the whole or part of the article obsolete or inaccurate. This article was published for informational use only and is not provided to serve as legal, tax, or investment advice. Hence, we do not guarantee and is not liable for the accuracy or completeness of any information provided herein or in any outcome as a result for using this information.
Victorino Q. Abrugar is a marketing strategist and business consultant from Tacloban City, Philippines. Vic has been in the online marketing industry for more than 7 years, practicing problogging, web development, content marketing, SEO, social media marketing, and consulting.
I usually just use turbo tax but I have to take taxes out of my own income this year. sigh. i dont knwo what to do.
turbotax is for the U.S., i thought this forum is for the Philippines?
Hello I Just Wanna Ask kung my makukuwa pako tax refund by january kahit nag start palang ako ng work this Nov 6? my salary is 50k a month.
Help me guys coz the company accountant said didaw po nagbibigay ng tax refund and BIR e.
Hi Vic,
Would you know the process on how can i return my tax refund?
My previous employer gave me a tax refund last oct 2012 due to resignation, I passed my 2316 to my new employer, however, it was too late since they’ve already processed the last payroll for dec 2012. and because of that, i’ve receieved another tax refund. I want to give it back before the april 2013 deadline but i dont know how to, hope you can help me.
Thanks!
How about on my case its my first job as a call center agent.. But then i got awol … How do i check if i still have this refund.. Thnkx
just file your clearance and they will give whatever you left of in you call center via check. mostlike released after 30 days.
Would like to ask if tax refund will be received yearly? Thanks.
From my understanding of Philippine taxation, you will only be entitled to a refund if your employer over withheld taxes from your monthly taxable compensation income during the period January to November (actual taxes withheld from same period) as compared to the annualized tax liability from January to December. As such, it is not normal for anyone to have yearly refund. if this situation is happening in a company, then the employees should start questioning the HRD for such over withholding.
Hello, just want to ask if my husband is entitled for tax refund. He was employed last September 2013 and he doesn’t received a tax refund until now. Lahat ng kasabayan nyang pumasok on that same month nakakuha ng tax refund sya lang po ang hindi. Is he entitled for tax refund po ba o hindi?
There is only a tax refund if the tax withheld by the employer exceeds his actual income tax due. Perhaps, it did not exceed as compared to his co-employees. You have to asked that on his employer and check his records.
i give birth to my child last year 2013 and she was added as one of my dependents should i get tax refund for that?
It could be a reason. But please check your employers’ accountant to confirm if there is actually an excess in withholding of your taxes.
what if confirmation has been made and a refund is due…. but for some reason your employer through your accountant has NOT successfully made adjustments in your alphalist at the end of the year. meaning, there really is an over payment on the part of the employee… how is the employee able to claim for the refund?
hello.. just wanna ask if the tax refund should directly be given to the employees?
either the pay check before January 25 or if you resigned as part of your last pay.
Hello! just wanted to ask. I’m in a BPO company for almost 2 years and I don’t receive any tax refund for almost 2 years of staying and paying my income tax. How can I get my tax refund? I already resigned to that company I worked with. Please help!
Hi, Just wanna know how tax refund is being computed?I started working on my second job last January 2013. My basic salary is P12,000 plus P3,400 allowance. I only got around P500 tax refund while my co-workers had more than what i received, like thousands. Would you happen to know if that’s correct or how much would my tax refund be?
Thank you.
it depends dun s sobrang amount that was taken out of your salary. let’s say for example accounting has computed that you should pay 1,300 for the whole year, but the withholding tax they took from your salary was a total of 1,500… then you should get a refund of 200.
Do you have the same tax status? What about income earned? Did you start with the company on the same date? Do they have previous employer within the same year? These are all factors affecting the final computation of your tax refund/tax due for the year.
Starting from January 1, 2013 to October 31, 2013 I was employed in a company. My tax was also deducted from my salary every pay day. When I saw my final pay with that company NO TAX REFUND reflected. May makukuha ba ako na tax refund? Please need your advised. Thank you.
Hi, we have an employee whose exemptions is M (married) in our payroll instead of M1 because she did not give an updated BIR form 2305. She gave her BIR 2316 from her previous employer stating she has one dependent. Should her exemption be considered without the updated 2305 and just use her 2316? If the company had finalized their alphalist with BIR for last year, can the employee still claim for a refund from BIR? If yes, how? Thanks.
Hi,
I would like to ask if you are familiar on filling tax refund for employees that are entitled to preferential tax rate(PTR)? I have 2 employers last year. The previous one using the normal taxation and the current one being a Regional Operating Head Quarters- because of this, I was entitled to preferential tax rate. It was only lately that I found out that if you will be using your PTR, your income is not annualized rather subject to final tax. I still have tax refund as indicated in my submitted 1700 and was told by BIR to have this deducted for this year’s tax but our payroll said it’s not possible as my income is subject to final tax due to PTR eligibility. They want me to claim from my previous employer since the refund was due to them not filling the correct additional exemption but since I am no longet part of that company, they refuse to help. Is there a way I can still claim this refund?
Thanks!
Hi! Just wanna ask….. What if I resigned from my present company as of July 2014, am i going to GET BACK (tax refund)all the tax withheld from me from January up to last payday????, just for the reason that am not able to finish the whole year in this company???
HEllo po. I would like to know kung what will happen to my tax refund if this whole year of 2014 part ako ng company but if I resign on the first week of January anu po mangyayari dun sa aking tax refund? is it included sa back pay na makukuha ko po? Please help po kasi ang pangit ng management ng aming company and the HR are avoiding and giving excuses to explain everything. I am a call center agent po. thank you!
Yes you will have your tax refund included in your last pay, if the company exceeds in w/holding tax from you the entire year.
i started working February 10, 2014 and i resigned on July 20, 2014 and earning 16K per month. My monthly wtax on compensation is 1732.07. My question is, Am i entitled for a tax refund? How much? pls help..Thanks
I will be resigning from my company effective this December 22. I just would like to ask if I am eligible to file for an ITR before I leave?
hi…I on my case, I receive my tax refund for January 2014 after my resignation from my previous company and now i am employed since Feb 2014. is it possible for me to have a tax refund from Feb 2014 to Dec 2014? thank you and hoping for your favorable response.
Hi, I have the same case with Mylene and will be waiting for some feedbacks if there is available. Thanks!
Magreresign po aq this coming dec 30 2014 entitle po ba aq for tax refund makukuha q po ba un sa backpay q nag start aq sa company nung april 30 calcenter agent po aq 20k basic q then Married with 1 dependent status q
Same question. Entitled po b s tax refund kung dec magreresign or january?
..ung husband q po d nya binigay ung tax refund nya..ano po ung mga gagawin pra po mkuha?
if i would like to resign January 2015 1st week, my question is am i entitled to received my tax refund in last week of January, because the releasing of our tax refund is on the last week of January 2015? Can i possibly get it?
Hi,
I have updated my tax status from Single to Head of the Family with 2 dependents. However, I was unable to submit updated BIR 2305 form to our HR before Dec. 30, 2014. Will I still get a tax refund on the 15th of January?
Thanks!
Hi. My company is not informing us when we can receive our tax refund. They keep on saying that (Finance department) does not have any idea when will it be distributed. But based on your article it should be given before the last payroll. Our last payroll would be this coming Friday, 23rd of January, 2015. However, we are not receiving any news when it’ll be given. Can it be included in my upcoming pay? If not given, how and who do we complain such incident? Thank you.
Hi. My employer made a mistake of crediting me a tax refund during my maternity leave. Trusting them that whatever they put in my salary acct is true and correct, I didnt question it. They dont allow payslips to be viewed outside the office. No way for me to check. Then I was shocked to know that my employer decided to get it back without my knowledge. During the last 2 months of 2014, the holiday season.. I was only receiving about 2k to 4k per cut off compared to my normal 10k (just an example). Just want to know.. Was it right for them to do that? I have been back to work since sept 25. They could have informed me and made arrangements then and not wait til nov 15 to do correct their mistake. Because of what they did, i had a nervous breakdown. I was far from my family and couldnt celebrate the holidays with them. Am I still going to get a tax refund? Until now, no words from my employer. Thanks.
hi po wala po ako alm about sa tax refund pero,gusto ko po malaman ng nakapag company po ako since 2005 to 2010 tapos po 2013 hanggang ngayun po ay cashier ako ng isang internet shop kinukuha nila yung tin number ko ibig po ba sabihin may tax refund po ako,salamat po yung po lamang ang aking katanungan.
Hi! Good Day!
I have an inquiry regarding my husband’s tax refund. Is he entitled for it since he only worked for the company from January 6, 2014 to October 15, 2014? His Gross salary is 30K, paid on a monthly basis. January and February 2014, no tax deducted. The following months taxes are already deducted as follows:
JANUARY 2014: ——
FEBRUARY 2014:——
MARCH 2014: 4,735.92
APRIL 2014: 2,652.59
MAY 2014: 2,652.59
JUNE 2014: 2,652.59
JULY 2014: 2,652.59
AUGUST 2014: 2,652.59
SEPTEMBER 2014:2,652.59
Php 20,651.46 is the total tax deducted to him by his employer. Now, we wanna know if he is entitled to a tax refund. We don’t know the computations for it.
We really hope that you can help us. Hope to hear from you.
Thank you very much!
hi good am can i claim a tax refund even if im not a regular employee? and my earning since i started with them is 9,100.00 and became 12,000 after 3 months?now i resigned can i claim my tax refund in my previous company?
hi Sir, i just want to ask. Am currently employed for 5 yrs na. May status is S1. Which is supposedly S3 because i have 3 kids. I just update my dependent this january 2015 as advised by our HR. Will i get po ba tax refund.
Thanks.
hi. pa help nmn poh.. what happen is.. i was not able to process my status update last december. with cvg. but na updateko na to poh sa BIR upon completion nang requirements ko sa convergys as m1 . convergys is still charging me tax as single. gave birth march 28, 2014. un ung d ko na update.. but base sa nvasa ko sa bir website.. but i resign dec 29. i transfered to another company and i was able to update na my status.. jan 5. but under this new company.. ang tanung ko po is. dpat bah. iisuehan pa aq nang convergys nang tax refund sa backpay ko?
Hi. Our company closed (BPO) last Oct.26, 2014 and they re-opened this February. We got our last salary by the end of October last year and that’s it. I was wondering if we could still get a tax refund considering we didn’t finish the whole year? if that’s the case how is it going to be done? I made some followup with our accounting and they didn’t give me any specific answer but a figure of my tax refund which is 800 something pesos which i am in doubt that’s all of it. can you enlighten me? I’m be willing to give you actual deductions i have since i keep all my payslips.
Thanks a lot! 🙂
when i gave birth last nov.2013 (2nd baby) my husband filed for the ME2 to add our 2nd in the beneficiary but until now the company failed to change his status from ME1 to ME2. And my husband dont even have the tax refund last dec2014. my question is do we have chance to get the refund for that year?
hi! I started working for the company from nov. 2013 and resigned on feb. 14,2015.. I was under probation until april 2014. my question is, should the company give me my tax refund for year 2014? they gave me my tax refund for year 2013(received it on feb. 2014). Thank you.
Hi Sir! I have a question about tax refund. I’ve been an employee of a BPO company for almost 13 years and I have not received any tax refund. Is it possible to not have a tax refund? We have already asked this question and their answer is because the tax computation every month is accurate/no errors that’s why we are not getting any tax refund from our company. Hope you can help me. Thank you.
And how can I check if the computation is really accurate? I’ll be honest I don’t know how to compute for it. Thanks again
i’m employed in 4 years in the company but until now i didnt received any tax refund. i have a son and he was added on my dependent ,should i get tax refund for that?
Hi. Since dec.2004 nagwork na po till 2008 iba ibang company po. wala po akong nakuhang tax refund. May makukuha po ba ako? At panu po makakuha ng tax refund?
Ask ko lang po if yung employee po is asking for refund from previous years? For example… tax code nya po before was MARRIED… then this year2014… hindi po pala nasasama yung dependent nya po sa exemption this year… Pwede po b nya i-refund yung previous years na overpayment po sya? Ano pong BIR RR# po kaya yun? salamat po
hi gusto lang sana malaman kung halimbawa i was forced to resign and kung yung employer ko hindi pa nireremit ung tax ko, pwde ko ba yung makuha together with my back pay? i worked from july 2014 to April 23 of this year. till now im waiting for the release of my backpay.. thanks
Hi. I just recently updated my status from M to M1. My kid is already 5 years old. Will I still be entitled for a tax refund equivalent of 5 years?
hi sir, ahmm.. how to compute tax refund? and if one employee employed to a company and she employed again to another company as a part time is it possible that the two companies can deduct a withholding tax to her salaries and compensation? thanks for the answer.. please email me the answer , hope to see the email tomorrow.. thank you
this is my email: villenadiosa @y.com
what if the employee resigned prior to the computation of taxes to be returned can he/she still demand for his/her refund?
every employee should know you how their tax due is being computed. tax table is available on the net.. can also visit bir website & it has a tax calculator, just need to fill up needed details.
hello! i was previously employed at a call center company for almost a year (september, 2013 to july 2014). i went AWOL last July 2014. Up to now i have NOT filed for a clearance yet, so i have not yet claimed my 2014 tax refund. my tax classification is ME4.
I intend to file for a clearance anytime soon. I would like to know if I can still receive my 2014 tax refund? will i get it from my back pay or should i claim it from the BIR by filing for a 2014 ITR?
Please reply.
hello. I would like to know if I would receive a tax refund this year? I was a minimum wage earner from January 2015-July 2015 and got an increment on effective August 1, 2015 and is being withheld with tax. Will I be withheld with tax as if I was above minimum for the whole year or will it be based on the month when I became above minimum? Also, will I get a tax refund? Thank you.
I just wanna ask: my friend has a plan to resign this Oct. 2015 working since Jan. Should she get a refund. Basic salary 14k and single.
Hi. i really need clarification on how much should an employee get as a refund of their taxes if they did not finish the calendar year with the same employer. correct me if i a wrong, when an individual does not start the calendar year with the company, the employer SHOULD return ALL the withheld tax during the year (for example, I got hired in March and since the company can not file an incomplete tax return at the end if the year, i should be receiving the taxes withheld from the time they started withholding my tax contributions until the end of the calendar year).
Also, am I correct that it is the taxpayer’s responsibility to inform their employer of their previous company in the case that an individual changes company in the middle of the year. The individual should either pay the amount already withheld by their previous employer and was received as part of the individual’s back pay or remit the amount to the employer so that the employer would be the one to file on their behalf.
hoping for answers to these questions. thanks.
If I’m going to file a resignation by October 29 will I be having a tax refund?
Hello Santi,
That’s my dilemma as well.
Hello to all, I am asking for your help with this.
Thank you,
Fritdae
I’m working for 3 years in private company but i don’t have receive any tax refund…what should i do?
Good afternoon. mag three years na po ako sa company namin and nag file na ako ng resignation effective Jan 05, 2016. may makukuha po kaya ako na tax refund from my employer? salamat po.
hi sir…i am only 3 months with my current company, i notice that my category as per payslip is M1 means(with 1 dependent) pero hindi ko pa po naupdate ung bir status ko with BIR and as i can remember, wala din akong pinirmahan na forms with this employer na magupdate ng status ko. Automatic ba nila ini update un kac nakita nila sa resume ko? sabi ng co employee ko dahil daw kulang ang kinakaltas sakin na tax dahil naka m1 naq pero sa bir wala pa , baka daw wala ako sahorin sa DEC 31?
hope u can reply thanks
I’m employed for 3 years on my current employer. I’m a single mother with 1 dependent. Our company provided a deadline to update our tax status last year. But I wasn’t able to submit it on the said date but still submitted it on the same year (2014). As per HR, since it was late, I was not able to get my tax refund. I was deducted as a single employee for 2 years and they just started restructuring my tax last Feb 2015 as Single with 1 dependent. Will I still get my tax refund for 2 years of paying tax as a single employee?
Same question po here. I was not able to submit before Dec 31 2015. I am married w/ 1 dependent. Can we still get our tax refund for 2015 once I change and update my status?