Guide on Holiday Pay Tax in the Philippines
You might be wondering if a holiday pay tax is working in the Philippines and can take a slice from the extra pay that you will be earning.
Undeniably, holidays are much awaited in the Philippines. For busy individuals whose work and businesses cancel operation during holidays, it is a perfect opportunity to spend some quality time with family and friends.
This year 2023, a lot of regular and special non-working days led to long weekends. Many people took the chance to book an out-of-town trip with their loved ones as weekends were extended — some even had short vacations abroad.
However, not all companies and businesses cancel work during holidays most especially those operating based on the timezone of other countries. These includes Business Process Outsourcing or BPO companies in the country.
Furthermore, there are also essential businesses in the Philippines that cater services to thousands of people daily. Suspending their operation for at least a day can have an impact on a lot of people.
On the other side of employees who get rest days during holidays, workers who report to work on regular holidays or special non-working days get additional pays. This is beneficial most especially for those who are challenged to make ends meet. In other cases, employees would prefer to work and get additional pays than do nothing at home or go somewhere and spend.
Is tax implemented on a holiday pay in the Philippines? Under the law, only minimum-wage earners are exempted from tax deductions on their holiday pays.
Aside from the holiday pay tax on the wages of employees who are not minimum-wage earners, the same rule applies to overtime pays, hazard pays, and night differential pays. Only the pays for minimum-wage earners are exempted from tax deductions.
