Bicam panel on tax reforms raises tax-exempt 13th month pay, other bonuses to P90k

Members of the bicameral conference committee on the Tax Reform for Acceleration and Inclusion (TRAIN) bill have agreed to increase the tax exemption cap of 13th month pay and other bonuses to P90,000.

Under Republic Act 10653, the 13th month pay and other benefits, including productivity incentives and Christmas bonuses, are exempted from tax if they do not exceed P82,000.

The Senate version of the TRAIN retained the P82,000 tax-free cap while the approved version of the House of Representatives raised it to P100,000.

As compromise, members of the bicameral panel tasked to reconcile the differences of the two versions have agreed to raise the tax-exempt ceiling to P90,000 effective starting 2018.

“Ngayong magpa-Pasko na po, napagkasunduan ng bicam na muling taasan ang halaga ng 13th month pay at iba pang bonuses na hindi na kakaltasan pa ng buwis. Ang bonus sa bonus na ito ay maagang Pamasko para sa ating mga ordinaryong manggagawa,” Senator Angara, chairman of the Senate ways and means committee,s aid.

Bicam members have also agreed to exempt P250,000 annual taxable income of all individual income taxpayers.

“Kung susumahin, aabot na sa P340,000 na kita kada taon ang hindi na pwedeng galawin ng gobyerno. Buong-buo na itong maiuuwi ng ating mga taxpayer sa kanilang mga pamilya,” Angara said.

The senator meanwhile reminded employers that they must pay their rank-and-file employees a 13th month pay regardless of the nature of their employment and whatever the method their wages are paid, provided they worked for at least one month during a calendar year.

Under the law, the 13th month pay should be given to private sector employees not later than December 24. It must be equivalent to one-twelfth (1/12) of the basic salary of an employee within a calendar year. —NB, GMA News