Employees can expect to take home higher midyear bonuses in June when the new tax-free maximum of P82,000 in bonuses goes into effect.
The implementing rules of Republic Act No. 10653, which raised to P82,000 from P30,000 the ceiling for exempting bonuses from income tax, will kick in on April 1, Makati Rep. Mar-Len Abigail Binay, deputy majority leader, said.
“Many state agencies and private firms traditionally distribute this perk starting in June so the money should start coming in soon enough,” Binay said.
She said the higher bonus should improve employees’ purchasing power.
“We expect an additional P30 billion to be put in the pockets of public and private sector employees in [the form] of productivity and performance incentive pay, loyalty award, gifts in cash or kind, 13th-month pay, Christmas bonus and other benefits of similar nature,” she said.
Overhaul tax system
President Aquino signed RA 10653 into law on Feb. 12.
Revenue Regulation 3-2015 which lists the law’s implementing rules was published in a widely circulated newspaper on March 16. The rules take effect two weeks later, on April 1.
Binay said the taxation system should be overhauled to put more income at the disposal of salaried employees who are being slapped with up to 32 percent in withholding taxes.
She said she has proposed bills that would exempt the night shift differential and overtime pay from income tax.