Gov’t workers urged to check midyear bonuses: Should be tax-free

By on May 20, 2017


A senator on Friday reminded government workers to check their midyear bonuses, particularly those that are PHP82,000 and below, as they should be tax-free. (PNA photo)
A senator on Friday reminded government workers to check their midyear bonuses, particularly those that are PHP82,000 and below, as they should be tax-free. (PNA photo)

MANILA—A senator on Friday reminded government workers to check their midyear bonuses, particularly those that are PHP82,000 and below, as they should be tax-free.

“…I’m reminding employees who are receiving the midyear bonus to carefully check your envelops or your ATMs,” Sen. Juan Edgardo Angara said in a statement.

Angara, chair of the Senate Committee on Ways and Means, made this reminder as their midyear bonuses are scheduled to be released this month.

Under Republic Act 10653, which Angara authored and sponsored last year, it mandates tax exemption for bonuses not over than PHP82,000.

RA 10653 provides that the 13th month pay and other benefits, including productivity incentives and Christmas bonuses not exceeding PHP82,000 being given to both government and private sector employees should be tax-free.

Before RA 10653 was signed into law in February last year, only bonuses not exceeding PHP30,000 were exempted from tax.

“Make no mistake about it. Even the midyear bonus is covered by this law,” Angara said.

“We increased the tax exemption cap on bonuses so that they can have a higher take-home pay for their families,” he added.

The midyear bonus is equivalent to one month’s basic pay, and will be given on top of the 13th month bonus employees are entitled to every December.