Compensation Income

Today's a holiday~ Today's rainy~ It couldn't get any better, bb.

Compensation Income

This includes all remuneration for services performed by an employee for his employer.

A. Regular Compensation

• basic salaries and wages 
• transportation allowance
• representation allowance
• entertainment allowance
• cost of living allowance
• taxable bonuses
• other remunration paid regularly

B. Supplementary Compensation

• fees, including directors fee's fees
• commisions
• emoluments
• honoraria
• taxable retirement pay
• taxable separation pay
• taxable money value of leave credits
• taxable fringe benefits
• taxable monetized unused vacation and sick leave
• other income of a similar nature

Forms of compensation

• Compensation paid in kind - paid in money or in some medium other than money; FMV is considered in computation of compensation income
• Living quarters and meals - if the person received this compensation in addition to his salaries, it is included as compensation income
• Facilities and privileges of relatively small value - also known as "de minimis benefits" are not subject to tax on compensation income
• Tips and gratuities - considered taxable income but not subject to withholding
• Pensions, retirement and separation pay - these are compensation subject to withholding, except those provided
• Fixed or variable transportation, representation and other allowances - if received by a public officer or employee of a public entity, it is compensation subject to withholding; if granted to employees under GPA and PERA, it is not subject to income tax.
• Vacation and sick leave allowances - unutilized vacation leave credits of ten days or less are not subject to income and withholding tax.
• Deductions made by employer from compensation of the employee - the amount deducted by the employer from the employee's compensation is considered as part of the employer's compensation
• remuneration for services as employee of a nonresident individual or foreign entity - any compensation from a NRANETB is subject to all provisions of law applicable to the employer
• compensation for services performed outside the Philippines - if the job is for a resident citizen or corporation, the compensation shall be treated as compensation subject to tax.

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