Guide on How To Calculate Tax On Christmas Bonus – If It Is Subject To It
HOW TO CALCULATE TAX ON CHRISTMAS BONUS – Are you wondering if your Christmas bonus is subject to a tax deduction and how much it may be?
The month of December is heavily linked in the Philippines to the idea of receiving gifts – may it be financially or materially. It is a time when families and friends buy gifts for each other to make one another feel extra special. Most parents do not let this month pass without giving their kids gifts.
Most parents use a part of their Christmas bonus in buying gifts for the children. In the Philippines, the Christmas bonus is one of those that many people await to receive every December aside from the 13th month pay.
The 13th month pay and the Christmas Bonus are different from each other in almost all aspects. The former is calculated and is mandatory by law. How to calculate tax on Christmas bonus? The good news is that it is not subject to tax deduction.
According to DOLE, the nature of Christmas Bonus remains a voluntary financial gift from the employers to their employees. It is usually given when the company has performed well in the year and can be given to all employees regardless of the rank. Furthermore, there is no mandate as to when it should be released.
Usually, employers in the Philippines divide the releasing of the Christmas bonus they give to their employees. This usually happens when employers do not want all of the amount to be spent during the holiday season.
To sum it up it, the answer on “how to calculate tax on Christmas bonus?” is that this financial gift of employers is not subject to a tax deduction. You will receive it as it is based on the generosity of your employer and the date when he or she wants to give it.
You may also visit – 13th Month Pay: Is It Subject to Tax Deduction in PH? Here’s an explanation…