The Ultimate Guide to BIR Form 2316

What is BIR Form 2316?

The BIR Form 2316 or Certificate of Compensation Payment/Tax Withheld is an official document that states an employee's gross income and the appropriate taxes withheld by the employer during the fiscal year. BIR Certificates like this prove that an employee's pay was subjected to income tax.

In the Philippines, all companies that engaged any employee during the previous year must submit Form 2316 to the Bureau of Internal Revenue. This form is accomplished for each employee who received a salary or any other form of remuneration during the last fiscal year.

Why is it essential for employees and employers?

Overall, Form 2316 enables the BIR to monitor a company's tax compliance. Upon filing, employee information (e.g., work tenure, salaries, etc.) is gathered and analyzed to ensure that the correct amount of tax is subjected to the enterprise.

Moreover, this is an important document to give an employee when switching jobs to allow the new employer to correctly compute the tax withheld for the remainder of the year.

Other reasons why the BIR Form 2316 is essential

• It provides proof of financial capacity for credit card applications, loans, visas, scholarships and more
• It serves an official financial document to meet requirements
• For expats, it's proof of tax payment for availing tax credits in their home country

In a nutshell, the BIR Form 2316:

• Is an annual tax return form that all Philippine companies must submit to the BIR that had engaged employees within the previous calendar year
• Identifies the total amount of compensation each employee was given and the total tax withheld from their wages
• And must be prepared and filed for all employees who received a salary or other remuneration from the employer within the previous year

How do I file and process this form?

A. Download Form 2316 from the BIR Certificates page

B. Part I is for all the information you gather about your employees

• For employees hired before 2021, make sure that January 1 is the date indicated in the "From" section. For employees hired within the year, make sure that the date stated is the exact date of hire.
• Note that items 9 to 11 are only applicable to minimum wage earners.

C. Parts II and III are where you fill out the employer information. For items 12 to 15, you can refer to your Certificate of Registration (BIR Form 2303) for all the required details.

• If your employee works for you full time, choose Main Employer. If he or she is working part-time, choose Secondary Employer.
• For your new hires who have already submitted their 2316, make sure that the details of their previous employer are correct.

D. Part IV is where you state all the remunerations, benefits and government contributions. This is also where you dictate the taxable and non-taxable benefits (13th-month pay, SSS, etc.) your employee receives.

E. For the last part, remember these key steps:

• Item 51 is to be signed by your authorized signatory.
• Item 52 is to be signed by the employee, complete with their current Community Tax Certificate number or valid ID number, place of issue and the indicated amount paid.
• Items 53 and 54 only apply if the employee is qualified for substituted filing. Substitute filing is only for employees that do not have any source of income or employer during the year.

F. Once the forms have been completed, kindly send them out to your staff. Ensure that their signatures are found in the document.

G. When done, prepare four (4) copies of the filled-out 2316 and give your employee one (1) copy.

H. Provide BIR with two (2) copies when you submit the form in January of the following year.

I. The last remaining copy will be for your recordkeeping. A good tip is to store them in one place and have scanned copies in case you misplace them.

FAQs about Form 2316

We understand that there might be some confusion regarding 2316, primarily for employees. To help you out, here are the answers to some frequently asked questions!

1. I'm an employee that switched jobs in the same year. Do I need to submit another form to my new employer?

Yes, so that your new employer will know how much income you've already earned for the year and accurately calculate taxes for it.

2. I left my company. Can I request a BIR Form 2316 from my previous employer?

Yes, you can. They are obliged to give you a copy on the day of your last compensation or back pay.

3. My employer does not want to provide me with a copy of my 2316 form. What should I do?

You could argue that it's a regulation that they should comply with. If they still refuse to provide you with one, call the BIR for your next steps

4. What happens if I don't give 2316 to my new employer?

They will deduct taxes as if you haven't paid any from your previous employer. This could affect your "proof of income" in the future, leading to difficulty applying for a visa or applying for a loan.

File before the deadline

It's easy to get overwhelmed and excited for the coming year, but let's not forget our duties to ensure that the year ahead will sail as smoothly as possible. Don't forget to file your BIR Form 2316 on time to avoid any complications in the future!

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