One of the most important forms all employees must know about is the BIR Form 2316. It is something you must receive every year as proof that taxes have been deducted from your income. In 2018, we recently issued an updated guide about this form. Take a look at it here.
If you are an employer seeking an assistance on how to fill out Form 2316, jump over to this article discussing how to properly fill out 2316.
What is BIR Form 2316?
The BIR Form 2316 is also called the Certificate of Compensation Payment or Income Tax Withheld.
The BIR defines compensation as either salaries, wages or other forms of remuneration given by an employer to an employee.
This is what the BIR Form 2316 looks like:
What Is It for and Who Needs to File It?
This form is a certificate that must be accomplished and issued yearly by the Payor or Employer to each employee whose income is subjected to final tax declaration. The employer must indicate the total amount that was paid to the employee and the corresponding taxes withheld during the calendar year.
Should you have no other income from other employers, there will be no need for you to file an income tax return. The BIR Form 2316 is enough proof that your income has already been subjected to income tax. This is called substituted filing, wherein the employer files the income tax returns for the employee.
This form is normally requested as part of pre-employment requirements in order for your new employer to make sure that the correct deductions have been made by your previous employer.
When Is the BIR Form 2316 Issued?
The employer must issue the form to each employee on or before the 31st of January of the succeeding year in which payment was made. However, in the case of termination of employment, it must be issued on the same day when the last payment of wages was made.
The BIR Form 2316 must be attached to the Annual Income Tax Return, which is the BIR Form 1700 for individuals receiving purely compensation income or BIR Form 1701 for individuals with mixed income.