The following items are exempt from withholding:
—(1) Remunerations received as an incident of employment, as follows;
—Retirement benefits received under RA No. 7641 and those received from private firms (individual or corporate), under a reasonable private benefit plan.
—Any amount received by an official or employee or by his heirs from the employer due to death, sickness or other physical disability or for any cause beyond the control of the said official or employee, such as retrenchment, redundancy, or cessation of business.
—For any cause beyond the control of the said official or employee connotes involuntariness on the part of the official or employee.
—Whether or not the separation is beyond the control of the official or employee, being essentially a question of fact, shall be determined on the on the basis of prevailing facts and circumstances.
—Any payment on account of dismissal constitute compensation regardless of whether the employer is legally bound by contract, statute or otherwise, to make such payment.--
—Social security benefits, retirement gratuities, pensions and other similar benefits by residents or non-resident citizens of the Philippines or aliens who come to reside permanently in the Philippines from foreign government agencies and other institutions, private or public;
—Payments of benefits due or to become due to any person residing in the Philippines under the law of the US administered by the US Veterans Administration;
—Payments of benefits made under the SSS Act of 1954, as amended;
—Benefits received from the GSIS Act of 1937, as amended, and the retirement gratuity received by government officials and employees.
—(2) Remunerations paid for agricultural labor – Does not include services performed in connection with forestry, lumbering or landscaping.
—(3) Remuneration for domestic services – Remuneration paid for services of a household nature performed by an employee in or about the private home of the person by whom he is employed is not subject to withholding.
—A private home is the fixed place of abode of an individual or family. If the home is utilized as a business enterprise (e.g. for board and lodging), it ceases to be a private home and remuneration paid therein is not exempted.
—In general, services of a household nature include services rendered by cooks, maids, butlers, valets, laundresses, gardeners, chauffeurs of automobiles for family use.
—Remuneration paid for services performed as a private secretary (even if at home) is considered as compensation.
—(4) Remuneration for casual labor not in the course of an employer’s trade or business –
—The term “casual labor” includes labor which is occasional, incidental, or regular. The expression “not in the course of trade or business” includes labor that does not promote or advance the trade or business of the employer. Thus, the remuneration is not considered as compensation.
—If it is rendered in the course of employer’s trade or business, such is considered as compensation even if its occasional, incidental or irregular.
—Any remuneration paid for casual labor performed for a corporation is considered as compensation.
—(5) Compensation for services by a citizen or resident of the Philippines for a foreign government or an international organization.
—(6) Damages – Actual, moral, exemplary and nominal damages received by an employee or his heirs pursuant to a final judgment or compromise agreement arising out of or related to an employer-employee relationship.
—(7) Life Insurance – except interest income which shall be included in the gross income.
—(8) Amount received by the insured as a return of premium.
—(9) Compensation for injuries or sickness – Accident or Health insurance or under Workmen’s Compensation Acts.
—(10) Income exempt under treaty – Income of any kind to the extent required by any treaty obligation binding upon the Government of the Philippines.
—(11) Thirteenth (13th) month pay and other benefits –
—(a) 13th month – equivalent to the mandatory one month basic salary.
—(b) Other benefits – X’mas bonus, productivity incentive bonus, loyalty award, gifts in cash/kind and other benefits of similar nature, including Additional Compensation Allowance granted and paid to all officials/employees of NGAs, SUCs, GOCCs, GFIs and LGUs.
—(12) GSIS, SSS, Medicare and other contributions.
—(13) De minimis benefits.
—(1) Remunerations received as an incident of employment, as follows;
—Retirement benefits received under RA No. 7641 and those received from private firms (individual or corporate), under a reasonable private benefit plan.
—Any amount received by an official or employee or by his heirs from the employer due to death, sickness or other physical disability or for any cause beyond the control of the said official or employee, such as retrenchment, redundancy, or cessation of business.
—For any cause beyond the control of the said official or employee connotes involuntariness on the part of the official or employee.
—Whether or not the separation is beyond the control of the official or employee, being essentially a question of fact, shall be determined on the on the basis of prevailing facts and circumstances.
—Any payment on account of dismissal constitute compensation regardless of whether the employer is legally bound by contract, statute or otherwise, to make such payment.--
—Social security benefits, retirement gratuities, pensions and other similar benefits by residents or non-resident citizens of the Philippines or aliens who come to reside permanently in the Philippines from foreign government agencies and other institutions, private or public;
—Payments of benefits due or to become due to any person residing in the Philippines under the law of the US administered by the US Veterans Administration;
—Payments of benefits made under the SSS Act of 1954, as amended;
—Benefits received from the GSIS Act of 1937, as amended, and the retirement gratuity received by government officials and employees.
—(2) Remunerations paid for agricultural labor – Does not include services performed in connection with forestry, lumbering or landscaping.
—(3) Remuneration for domestic services – Remuneration paid for services of a household nature performed by an employee in or about the private home of the person by whom he is employed is not subject to withholding.
—A private home is the fixed place of abode of an individual or family. If the home is utilized as a business enterprise (e.g. for board and lodging), it ceases to be a private home and remuneration paid therein is not exempted.
—In general, services of a household nature include services rendered by cooks, maids, butlers, valets, laundresses, gardeners, chauffeurs of automobiles for family use.
—Remuneration paid for services performed as a private secretary (even if at home) is considered as compensation.
—(4) Remuneration for casual labor not in the course of an employer’s trade or business –
—The term “casual labor” includes labor which is occasional, incidental, or regular. The expression “not in the course of trade or business” includes labor that does not promote or advance the trade or business of the employer. Thus, the remuneration is not considered as compensation.
—If it is rendered in the course of employer’s trade or business, such is considered as compensation even if its occasional, incidental or irregular.
—Any remuneration paid for casual labor performed for a corporation is considered as compensation.
—(5) Compensation for services by a citizen or resident of the Philippines for a foreign government or an international organization.
—(6) Damages – Actual, moral, exemplary and nominal damages received by an employee or his heirs pursuant to a final judgment or compromise agreement arising out of or related to an employer-employee relationship.
—(7) Life Insurance – except interest income which shall be included in the gross income.
—(8) Amount received by the insured as a return of premium.
—(9) Compensation for injuries or sickness – Accident or Health insurance or under Workmen’s Compensation Acts.
—(10) Income exempt under treaty – Income of any kind to the extent required by any treaty obligation binding upon the Government of the Philippines.
—(11) Thirteenth (13th) month pay and other benefits –
—(a) 13th month – equivalent to the mandatory one month basic salary.
—(b) Other benefits – X’mas bonus, productivity incentive bonus, loyalty award, gifts in cash/kind and other benefits of similar nature, including Additional Compensation Allowance granted and paid to all officials/employees of NGAs, SUCs, GOCCs, GFIs and LGUs.
—(12) GSIS, SSS, Medicare and other contributions.
—(13) De minimis benefits.