Tax Annualization and form BIR 2316 and 1700 in the Philippines

What is Tax Annualization?

Tax annualization is the process of equalizing the tax withheld and the tax due on an employee's income during the fiscal year. Companies perform annual tax calculations to ensure both the employees and the company are paying the correct amount of tax to the Bureau of Internal Revenue (BIR).

What is Form 2316?

Form 2316 (Certificate of Compensation Payment/Tax Withheld) is an official BIR document issued by employers in the Philippines. It shows the breakdown of employees’ gross income and the withheld tax during the fiscal year.

The 2316 form allows the BIR to monitor the company’s tax compliance.

Who prepares Form 2316?

Remote, as your employer, prepares 3 copies of Form 2316 for each employee receiving salaries, wages, and other types of compensation. One copy is given to the employee, one is submitted to the BIR and the original must be retained for ten years by the employer. 

Employees must meet the following criteria:

1. You get purely compensation income for your work, regardless of how much it is.
2. You worked for only one employer during the calendar year.
3. Your employer has withheld your taxes properly.

When is the Deadline for the Submission of BIR Form 2316?

You will receive your BIR Form 2316 from us by January 31, 2024.

After signing your Form 2316, we will collect and file it with the BIR by February 28 every year.

What to Do if You Switched Employers Within the Same Year?

If you change employers within the year, your previous employer should provide you with this form when you receive your pay. Remote as your current employer can then calculate your tax withheld for the rest of the year.

If you changed jobs in 2023 (if you had 2 employers for 2023), you will need to file your own income tax return, too, in the form of BIR Form 1700.

This form can be filled out in person or online, and you’ll need to attach your supporting documents which is your BIR 2316 Form from your previous employer/s.

Example: If you switched jobs in February 2023 and then switched jobs again in May 2023 and then switched again to your current job last November 2023, you will need to get your BIR 2316 Forms from the employer you left in February and the employer you left last May 2023.

It’s important to keep in mind that failing to file your income tax return or filing it late can result in penalties. Please make sure to file your return on time and accurately!

Please visit this official government page to see the details.